The following yield data relates to a number of high-quality corporate bonds recorded at each of the three points in time:

Yield to Maturity

Maturity (years)

5 years ago

2 years ago

Today

1

9.09%

14.57%

9.31%

3

9.21%

12.83%

9.81%

5

9.35%

12.21%

10.85%

10

9.49%

10.95%

12.55%

Required: Consider the data from 5 years ago. According to the expectations hypothesis, what approximate return did investors expect a 5-year bond to pay as of today? Hint: think of expectations as a percentage difference in returns between the present and the future.

Answer

%

INPUT YOUR ANSWER AS A PERCENT ROUNDED TO 2 DECIMAL PLACES FOR EXAMPLE: 28.41%.