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We introduce Poisson boundaries of II
$_1$ factors with respect to density operators that give the traces. The Poisson boundary is a von Neumann algebra that contains the II
$_1$ factor and is a particular example of the boundary of a unital completely positive map as introduced by Izumi. Studying the inclusion of the II
$_1$ factor into its boundary, we develop a number of notions, such as double ergodicity and entropy, that can be seen as natural analogues of results regarding the Poisson boundaries introduced by Furstenberg. We use the techniques developed to answer a problem of Popa by showing that all finite factors satisfy his MV property. We also extend a result of Nevo by showing that property (T) factors give rise to an entropy gap.
