Gregory is an analyst at a wealth management firm. One of his clients holds a $10,000 pertfolio that consists of four stocks. The investment allocation in the portfollo along with the contribution of risk from each stock is glven in the following table: Gregory calculated the portfolios beta as 0.690 and the portfolio's required return as 8.8950%. Gregory 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 addationat shares of Baque Co. The risk-free rate is 4%, and the market rik premium is 5.50%. Accoraing to Gregorys recommendation, assuming that the market is in equilbrium, how much will the portfolio's required return change? (Note: Do not round your intermediate calculations.) 0.9009 percentage points 1.4322 percentage points 1.1550 percentage points 1.32s3 percentage points Analysts' estimates on expected retums from equity investments are based on several factors. These estimations also often incfude subjective and judemental factors, because different analysts interpret data in different ways. Suppose, based on the eamings consensus of steck analysts, Gregory expects a return of 6.24% from the portfolio with the new welghts. Does he think that the required return as compared to expected returns is undervalued, overvalued, or fairly valued? Undervalued Overvalued Fairiy valued Suppose instead of replacing Atteric inc.'s stock with Baque Co.'s stock, Gregory considers replacing Atteric Inc.'s stock with the equal doilfar 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