The Glover Scholastic Aid Foundation has received a $20$ million global government bond portfolio from a Greek donor. This bond

portfolio will be held in euros and managed separately from Glover's existing U$.$S$.$ dollar$-$denominated assets. Although the bond

portfolio is currently unhedged, the portfolio manager, Raine Sofia, is investigating various alternatives to hedge the currency risk of

the portfolio. The bond portfolio's current allocation and the relevant country performance data are given in Exhibits $1$ and $2.$ Historical

correlations for the currencies being considered by Sofia are given in Exhibit $3.$ Sofia expects that future returns and correlations will

be approximately equal to those given in Exhibits $2$ and $3.$

Exhibit $1.$ Glover Scholastic Aid Foundation Current Allocation Global Government Bond Portfolio

Exhibit $2.$ Country Performance Data $($in local currency$)$

Required:

Calculate the expected total annual return $($euro$-$based$)$ of the current bond portfolio if Sofia decides to leave the currency risk

unhedged.

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.