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Brandon is an analyst at a weatth management firm. One of his dients holds a $3,000 portfolie that consists of four stocke, The imvestment alfocation

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Brandon is an analyst at a weatth management firm. One of his dients holds a $3,000 portfolie that consists of four stocke, The imvestment alfocation in the portfolio along with the contribution of tisk from each stock is given in the following tabio: Brandon calculated the portfolio's beta as 0.930 and the portfolio's required return as 9.1150%. Brandon thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Atteric Incis shares with the same amount in additional shares of Transfer Fuels Co. The risk free rate is 4%, and the market risk premium is 5.50%, According to Brandon's recommendation, assuming that the market is in equlibrium, how much will the portfolio's required return change? (Note: Do not round your intermediate calculations.) According to Braridon'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.) 0.9625 percentage points 1.1069 percentage points 1,1935 percentage points 0.3508 percentage points Analysts' estimates on expected returns from equity investments are based on several factors. These estimations also often indude subjective and fudgmental factors, because different analysts interpret data in different ways. Suppose, based on the eamings consensus of stock analysts, Brandon expects a return of 9,65\%h 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? Overvalued Fairty valued Undervalued Suppose, based on the earnings consensus of stock analysts, Brandon expects a retum of 9.65% 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? Overvalued Falily valued Undervalued Suppose instead of replading Ateric tnc.'s stock with Transfer Fuels Co.'s stock, Brandon considers replading 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 risk would

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