HYT invests primarily in high-yield (and therefore high-risk) bonds.

Assume these bonds pay an average of 8%, and assume HYT acquires debt at an interest cost of 1.5%.

If you invest in the fund, what is your expected annual percent return net of the interest costs?

Use the leverage from part b and calculate on a portfolio basis instead of a per-share basis (this will make it easier to deal with interest costs).