12. Portfoliobeta and weights Rosa is an analyst at a wealth management firm. One of her clients holds a $5,000 portfollo that consists of four stocks. The investment allocation in the portfolio along with the contribution of risk from each stock is given in the following table: Rosa calculated the portfolio's beta as 0.858 and the portfolio's expected return as 10.58%. Rosa thinks it will be a good idea to reallocate the funds in her cllent's portfollo. She recommends replacing Atteric inc.'s shars with the same amour in additional shares of Baque Co. The risk-free rate is 5.00%, and the market risk premium is 6.50%. According to Rosa's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required retum change? 0.62% 0.99% 0.80% 0.92% 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, Rosa expects a return of 9.76% from the portfolio with the new weights. Does he think that the revised portfolio, based on the changes he recommended, is undervalued, overvalued, or fairly valued? Undervalued Overvalued Fairly valued Suppose instead of replacing Atteric Inc.'s stock with Baque Co.'s stock, Rosa considers replacing Atteric Incis stock with the equal doliar allocation to sharas of Company X's stock that has a higher beta than Atteric Inc.. If everything eise remains constant, the portiolio's beta would and the required return from the portfolio would