Determine the effective interest rates for all three currencies in both the Euro market and the domestic market

Euro market investment and fund raising a U.S. based multinational company has two subsidiarie Show more P19-5 Euro market 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 Y). Forest coast of business operations indicate the following short-term financing position for each subsidiary (in equilavent U.S. dollars): The management gathered the following data: Currency __________________________________________________ Item US$ MP Y ______________________________________________________________________________ Spot exchange rates MO 11.60/US$ Y108.25/US$ Forecast percent change -3.0% +1.5% Interest rates Nominal Euromarket 4.00% 6.20% 2.00% Domestic 3.75% 5.90% 2.15% Effective Euromarket ______ _______ _______ Domestic ______ _______ _______ Determine the effective interest rates for all three currencies in both the Euro market and the domestic market and then indicate where the funds should be invested and raised. (Note: Assume that Show less

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