Spot exchange rates MP11.63/US$ 108.08/US$ Forecast percent change -3.02% +1.46% Interest rates Nominal Euromarket 4.04% 6.23% 1.95% Domestic 3.76% 5.92% 2.12%

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: $85 million excess cash to be invested (lent)

Japan: $60 million funds to be raised (borrowed)

The effective interest rate in the Euromarket for the US$ is?