Gregory is an analyst at a wealth management firm. One of his dients holds 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: Investment Allocation 35% Beta Standard Deviation 23.00% 0.750 Stock Atteric Inc. (AI) Arthur Trust Inc. (AT) Lobster Supply Corp. (LSC) Baque Co. (BC) 20% 1.600 27.00% 15% 1.200 30.00 30% 0.500 34.00% Gregory calculated the portfolio's beta as 0.913 and the portfolio's expected retum as 9.02%. Gregory thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Atteric Inc.'s shares with the same amountin additional shares of Baque Co. The risk-free rate is 4%, and the market risk premium is 5.50% According to Gregory's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required retum change? 0.60 percentage points O 0.55 percentage points O 0.37 percentage points O 0.48 percentage points Analysts estimates an expected retums 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 eamings consensus of stock analysts, Gregory expects a retum of 10,019 from the portfolio with the new weights. Does he think that the ruvisid portfolio, based on the changes we recommended, is undervalued, overvalued, or fairly valued? Fairly valued Overvalued Undervalued