9. Portfolio beta and weights Gregory is an analyst at a wealth management firm. One of his dients holds a $7,500 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 portfollo's beta as 0.910 and the portfollo's required retum as 12.8250%. Gregory thinks it will be a good idea to reallocate the funds in his dient's portfolio. He recommends roplading Atteric Incis shares with the same amount in additional shares of Transfer fuels Co. The risk.free rate is 6%, and the market risk premium is 7.50\%. 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.) 0.8190 percentage points 1.2075 percentage points 1.0500 percentage points. 1. 3020 percentage polints Analysts' estimates on expected returns from equity investments are based on seveal factors. These estimations also often include subjective and fucomental factors, because different analysts interpret data in different ways. Suppose, based on the earmings consensus of stock analvsts, Gregary expects a return of 13.28% from the portfolio with the new weights. Does he think that the required return as compared to expected returns is undervalued, overvalued, or fainty valued? Unservatued Overvalued Suppose, based on the earnings consensus of stock analysts, Gregory expects a return of 13.28% from the portfolio with the new weights. Does he think that the required retum as compared to expected returns is undervalued, overvalued, or fairly valued? Undervalued Overvalued Faitly valued Suppose instead of replading Atteric Incis stock, with Transfer Fuels Co.'s stock, Grepory considers replacing Atteric Incis stock with the equal dollar allocatien to shares of Company X 's stock that has a higher beta than Atteric inc. If everything else remains constant, the required return from the portcilo would