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.$)$

$0\mathrm{.}8690$ percentage points

$1\mathrm{.}0776$ percentage points

$0\mathrm{.}6778$ percentage points

$0\mathrm{.}9994$ percentage points

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, Rafael expects a return of $6\mathrm{.}41\%$ 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?

Fairly valued

Overvalued

Undervalued

Suppose instead of replacing Atteric Inc.$\text{'}$s stock with Baque Co$.\text{'}$s stock, Rafael considers replacing Atteric Inc.$\text{'}$s stock with the equal dollar allocation to shares of Company X$\text{'}$s stock that has a higher beta than Atteric Inc. If everything else remains constant, the required return from the portfolio would

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