Eric is an analyst at a wealth management form. One of his dients holds a $10,000 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 Standard Deviation Atterie Inc. (AT) Investment Allocation 35% 20% Beta 0.750 1.400 0.23% 0:27% Arthur Trust IncAT) Corp. (LC) Transfer Fuels Co. (TF) 0.30% 15% 30% 1.100 0.400 0.34% Eric calculated the portfolio's beta as 0.828 and the portfolio's expected return as 8.55% Eric thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Actor Inc.'s shares with the same amount in additional shares of Transfer Fuels Co. The risk free rate is 4.00%, and the market risk premium s 5.50%. According to Eric's recommendation, assuming that the market is in equilibrium, the portfolio's required return will change by 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, Eric expects a return of 7.9 from the portfolio with the new weights. Does he think that the revised portfolio based on the change the recommended s ervad verveled or try valued Overvalued Undervalued Farty valued Suppose instead of replacing Atteric Inc.'s stock with Transfer Fuels Co.'s stock, Eric considers replacing Atterie Inc.'s 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