We do bankruptcies specializes in providing advice to firms in financial distress. it prospers in recessions when other firms are struggling. consequently, its beta is negative, -.2. (l02)

a. If the interest rate on treasury bills is 4% and the expected return on the market portfolio is 14%, what is the expected return on the shares of the law firm according to the CAPM?

b. Suppose you invested 70% of your wealth in the market portfolio and the remainder of your wealth in the shares in the law firm. What would be the beta of your portfolio?