9. Portfolio beta and weights Rafael is an analyst at a wealth management firm. One of his clients halds 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: Rafbel calculated the portfolio's beta as 0.945 and the portfolio's required return as 9.1975%. Rafael thinks it will be a good idea to reallocate the funds in his cllent'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%5. According to Rafael'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.) 0.8855 percentage points 0.9548 percentage points 0.7700 percentage points 0.6006 percentage polnts Aralysts' 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, Rafael expects a return of 6.93% from the portfolio with the new weights. Does he think that the required return as compared to expected returns is undervalued, overvalued, or fairly valued? Undervalued Fairly valued Overvalued Suppose instead of replacing Atteric Incis stock with Baque Co.'s stock, Rafael considers replacing Atteric Incis 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 on several factors. These estimations also often include subjective and s a return of 6.93% from the portfolio with the new weights. Does he think vervalued, or fairly valued? ael considers replacing Atteric Inc.'s stock with the equa ation to ything else remains constant, the portfolio's beta would