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3. Portfolio beta and weights Brenden is an analyst at a wealth management firm, One of his clients holds a 57,500 pertfolio that consists of

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3. Portfolio beta and weights Brenden is an analyst at a wealth management firm, One of his clients holds a 57,500 pertfolio 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: Brandon colculated the portfolio's beta as 0.878 and the portfolio's expectad return as a.as\%. Brendon thinks if will be a geed idea to reallocate the funds in his client's portolis, He recommends replacing Atteric inc,'s shares with the same ameuns in additional shares of Trantfer Fueis Co. The risk-free rate is 4 \%h, and the maket risk premium is 5.50%. According to Elanden'i recommendatien, astuming that the markit is in equalibrium, how much will the pertlolios required return change? 0.60 percentage points 0.97 percentage points 0.55 percentage points 0.46 percentage peints Suppose instead of replacing Attaric Inch stock with Transfer Fuels Co'ta stock, trandon considers replacing Attaric Incix steck aith the equat dokar 1. and the required return from the pertfolio would

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