q10 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: $82 million excess cash to be invested (lent) Japan: $60 million funds to be raised (borrowed) The management gathered the following data: . Determine the effective interest rates for all three currencies in both the Euromarket and the domestic market; then indicate where the funds should be invested and raised. (Note: Assume that because of local regulations, a subsidiary is not permitted to use the domestic market of any other subsidiary.) The effective interest rate in the Euromarket for the US$ is %. (Round to two decimal places.) 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.).

1. q10
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: $82 million excess cash to be invested (lent)
Japan: $60 million funds to be raised (borrowed) The management gathered the following data: .
Determine the effective interest rates for all three currencies in both the Euromarket and the
domestic market; then indicate where the funds should be invested and raised. (Note: Assume
that because of local regulations, a subsidiary is not permitted to use the domestic market of any
other subsidiary.) The effective interest rate in the Euromarket for the US$ is %. (Round to two
decimal places.) 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.)