11. Portfoliobeta and weights Carlos is an analyst at a wealth management firm. One of his clients holds a $10,000 portfolio that consists of four stocks. The investment allocatio the portfolio along with the contribution of risk from each stock is given in the following table: Carlos calculated the portfolio's beta as 0.790 and the portfolio's expected return as 8.35%. Carlos thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Atteric Inc.'s shares with the same amo in additional shares of Transfer Fuels Co. The risk-free rate is 4.00%, and the market risk premium is 5.50%. According to Carlos's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change? 0.48% According to Carlos's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change? 0.48% 0.39% 0.45% 0.30% Analysts' estimates on expected returns from equity investments are based on several factors. These estimations also often include subjective and judgmental factors, because different analysts interpret data in different ways. Suppose, based on the earnings consensus of stock analysts, Carlos expects a return of 7.95\% from the portfolio with the new weights. Does he th that the revised portfolio, based on the changes he recommended, is undervalued, overvalued, or fairly valued? Overvalued Undervalued Fairly valued Analysts' estimates on expected returns from equity investments are based on several factors. These estimations also often include subjective and judgmental factors, because different analysts interpret data in different ways. Suppose, based on the earnings consensus of stock analysts, Carlos expects a return of 7.95\% from the portfolio with the new weights. Does he th that the revised portfolio, based on the changes he recommended, is undervalued, overvalued, or fairly valued? Overvalued Undervalued Fairly valued Suppose instead of replacing Atteric Inc.'s stock with Transfer Fuels Co.'s stock, Carlos considers replacing Atteric Inc.'s stock with the equal dollar allocation to shares of Company X's stock that has a higher beta than Atteric Inc.. If everything else remains constant, the portfolio's beta would , and the required return from the portfolio would