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Consider a high-yield bond with a beta of 1.5 and a price one year from today of $135. 1. If the risk-free rate is 2%

Consider a high-yield bond with a beta of 1.5 and a price one year from today of $135.

1. If the risk-free rate is 2% and the R_mis 10%, what is the expected return for this bond?

2. What is the likely price of this bond, if markets are in equilibrium?

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