Exhibit 76: Emerging Market Currency Valuation Exhibit 77: Estimated Duration of US Bond Market Despite the recent rally, emerging market currencies remain The bond market's sensitivity to rising rates is the highest undervalued against the US dollar. on record. Average Deviation from Fair Value vs. US Dollar (%) Duration (Years) 20 74 | EM Currencies 15 | foc 10 4 on Average 64 7 | 5 0 ™ | | | 5 4 -10 | | 45 | 5 4 | -20 | -25 2 = 2008 2009 2010 2011 2012 2013 2014 2015 2016 1989 1994 1999 2004 2009 2014 Data through November 30, 2016. Data through December 31, 2016. Note: Average of Goldman Sachs Dynamic Equilibrium Exchange Rate, 5-year moving average, Note: Based on the Barclays US Aggregate Bond Index. and Fundamental Equilibrium Exchange Rate misalignments of currencies in the JP Morgan Source: Investment Strategy Group, Bloomberg. Government Bond Index—Emerging Markets Global Diversified. Source: Investment Strategy Group, Bloomberg, Datastream, Goldman Sachs Global Investment Research, Peterson Institute for International Economics. the same time, the recovery in commodity prices, we believe the ascent of interest rates remains in recent firming in global growth and potential for its infancy. expansionary fiscal policy are shifting the focus Still, it is important to differentiate between from deflation to reflation. a normalization of interest rates and a disorderly This shift in perspective arrives atatime when — backup. While we expect higher interest rates over the market’s vulnerability to rising rates is the the coming years, secular headwinds—like aging highest on record (see Exhibit 77). Losses from demographics and slower productivity growth— these long-duration positions in response to higher — suggest the terminal point of that increase will be rates could beget more bond sales, creating a lower than the historical average. This fact is not vicious cycle. That yields are still extremely low lost on the Federal Reserve, which has reduced by historic