Euromarket investment and fund raising A U.S.-based multinational company has two subsidiaries, one in Mexico (local currency, Mexican peso, MP) and one in Japan (local currency, yen, ). Forecasts of business operations indicate the following short-term financing position for each subsidiary (in equivalent U.S. dollars): Mexico: $88 million excess cash to be invested (lent) Japan: $65 million funds to be raised (borrowed) The management gathered the following data: Determine the effective interest rates for all three currencies in both the Euromarket and the domestic market; then indicate where the funds should be invested and raised. (Note: Assume that because of local regulations, a subsidiary is not permitted to use the domestic market of any other subsidiary.) Data table The effective interest rate in the Euromarket for the US$ is %. (Round to two decimal places.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Item US $ Currency MP MP11.59/US$ - 2.98% Spot exchange rates Y 108.68/US$ + 1.47% Forecast percentage change Interest rates Nominal 4.03% 6.18% 1.97% Euromarket Domestic 3.75% 5.92% 2.18% Effective Euromarket Domestic