9. Portfolio beta and weights Gregory is an analyst at a wealth management firm. One of his clients holds a $5,000 portfolio 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: Stock Atteric Inc. (AI) Arthur Trust Inc. (AT) Lobster Supply Corp. (LSC) Baque Co. (BC) 0.4505 percentage points 0.5775 percentage points Investment Allocation 0.7161 percentage points 35% 20% 15% 30% 0.6641 percentage points Beta Gregory calculated the portfolio's beta as 0.800 and the portfolio's required return as 8.4000%. Gregory 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 amount in additional shares of Baque Co. The risk-free rate is 4%, and the market risk premium is 5.50%. 0.600 1.600 1.200 0.300 According to Gregory's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change? (Note: Do not round your intermediate calculations.) Standard Deviation 38.00% 42,00% 45.00% 49.00%

9. Portfolio beta and weights Gregory is an analyst at a wealth management firm, One of his clients holds a $5,000 portfolio 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: Gregory calculated the portfolio's beta as 0.800 and the portfolio's required return as 8.4000%. Gregory thinks it witl be a good idea to reatlocate the funds in this ditent's portfolio. He recommends replacing Acteric Incis shares with the same amount in additional shares of Baque C0. The risk-free rate is 4%, and the market risk premium is 5,50%. According to Gregorys recommendation, assuming that the market is in equilibrium, how much will the portfolio) required return change? (Note: Do not round your intermediate calculations.) 0.4505 percentage points 0 5775 percentage pothts 0.7161 percentoge points 0,06+1 percention points Analysts' estimates on expected retums from equity investments are based on several factors. These estimations also often include subjective and judgmentai factors, becaurt differtnt anslyets interpret data in different ways. Suppose, based on the earnings consensus of stock analysts, Gregory expects a return of 6.32% from the portfollo wat the new weights. Does he think that the required return as compared to expected returns is undervalued, overvalued, or fairty valued? Undervalued overvotued Faing valued suppose