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QUESTION
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, −
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, −0.2.
a. if the interest rate on treasury bills is 5% and the expected return on the market portfolio is 15%, what is the expected return on the shares of the law firm according to the capm?
