JUST B

A $40-$year maturity bond has a $8\%$ coupon rate, paid annually. It sells today for $$957\mathrm{.}42.$ A $30-$year maturity bond has a $7\mathrm{.}5\%$ coupon

rate, also paid annually. It sells today for $$969\mathrm{.}5.$ A bond market analyst forecasts that in five years, $35-$year maturity bonds will sell at

yields to maturity of $9\%$ and that $25-$year maturity bonds will sell at yields of $8\mathrm{.}5\%.$ Because the yield curve is upward$-$sloping, the

analyst believes that coupons will be invested in short$-$term securities at a rate of $7\%.$

Required:

b$.$ What is the expected return of the $30-$year bond over the five$-$year period? $($Do not round intermediate calculations. Round your

answer to $2$ decimal places.$)$

Expected rate of return