#2 is correct.
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tamguatlay#2 is correct.Then in what case can I use #1?
tonyscott The dance performed by the disabled actors is really a hit, but years ago no one ____ they would achieve such great success.1.could imagine2.could have imaginedThe dance performed by the disabled actors is really a hit. But no one could imagine they were capable of doing it. (This is said just after or soon after their performance. )