Expected return and portfolio beta

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Reference no: EM131187916

We Do Bankruptcies is a law firm that specializes in providing advice to firms in financial distress. It prospers in recessions when other firms are struggling. Consequently, its beta is negative, -.4

a. if the interest rate on Treasury bills is 6% and the expected return on the market protfolio is 16%, what is the expected return on the shares of the law firm according to the CAPM? (Enter your answer as a whole percent)

Expected return ___________%

b. Supposes you invested 80% of your wealth in the market protfolio and the reminder of your wealth in the shares in the law firm. What would be the beta of your portfolio? (Round your answer to 2 decimal places)

portfolio beta _____________

Reference no: EM131187916

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