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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: $90 million excess cash to be invested (lent) Japan: $70 million funds to be raised (borrowed) The management gathered the following data: Determine the effective interest rates for all three currencies 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.) - X Data table (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 Spot exchange rates Forecast percentage change Interest rates Nominal Euromarket Domestic Effective Euromarket Domestic US $ 3.95% 3.72% Print Currency MP MP11.58/US$ -3.05% 6.21% 5.89% Done ¥107.75/US$ +1.48% 1.98% 2.16% D₂₁ Clear all Check answer