The Glover Scholastic Ald Foundatlon has recelved a 20 mIllion global government bond portfollo from...

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image The Glover Scholastic Ald Foundatlon has recelved a 20 mIllion global government bond portfollo from a Greek donor. This bond portfollo will be held In euros and managed separately from Glover's exIstIng U.S. dollar-denominated assets. Although the bond portfollo Is currently unhedged, the portfolio manager, Ralne Sofia, Is Investigating varlous alternatlves to hedge the currency risk of the portfolio. The bond portfollo's current allocation and the relevant country performance data are given In Exhiblts 1 and 2 . HIstorical correlations for the currencles being considered by Sofia are given in Exhlbit 3. Sofia expects that future returns and correlations will be approxlmately equal to those given in Exhiblts 2 and 3. Exhlblt 1. Glover Scholastic Ald Foundation Current Allocation Global Government Bond Portfolo Exhiblt 2. Country Performance Data (In local currency) Required: Calculate the expected total annual return (euro-based) of the current bond portfollo If Sofia decides to leave the currency risk unhedged. Note: Do not round Intermedlate calculatlons. Enter your answer as a percent rounded to 2 decimal places

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