(10pts) 7. GYAO Inc.'s bonds currently sell for $1,275. They pay a $80 annual coupon, have a 25-year maturity, and a $1,000 par value, but they can be called in 5 years at $1,080. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. What is the difference between this bond's YTM and its YTCP (Subtract the YTC from the YTM, it is possible to get a negative answer.) (5pts) 8. Cielo & Shiskote Inc.'s stock has a 30% chance of producing a 12% retum, a 40% chance of producing a 6% return, and a 30% chance of producing a -5% return. What is the firm's expected rate of return? (5pts) 9. Mr.Chuy has $2,000,000 invested in a 2-stock portfolio. $1,200,000 is invested in Tesla and the remainder is invested in Eli Lilly, Tesla's beta is 2.00 and Eli Lilly's beta is 0.3. What is the portfolio's beta? (5pts) 10. Calculate the required rate of return for Vestel Inc., assuming that (1) investors expect a 1.0% rate of inflation in the future, (2) the real risk-free rate is 1.2%, (3) the market risk premium is 4.0%, (4) and the firm has a beta of 1.5. 3