Gregory is an analyst at a wealth management firm. One of his clients holds a $5,000 portfolio that consists of four stocks. The investment aliocation in the portfolio along with the contribution of risk from each stock is given in the following table: Gregory calculated the portfollo's beta as 0.830 and the portfolio's required return as 12.2250%. Gregory thinks it will be a good idea to reallocate the funds in his client's portfollo. He recommends replacing Atteric tncis shares with the same amount in additional shares of Transfer Fuels Co. The risk-free rate is 6%, and the market risk premium is 7.50%. According to Gregory'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.) 0.4095 percentage points 0.5250 percentage points 0.6510 percentage points 0.6038 percentage points Analysts' estimates on expected returns from equity investments are based on several factors. These estimations also often include subjective and judgmentai factors, because different analysts interpret data in different ways. Suppose, based on the earnings consensus of stock analysts, Gregory expects a return of 13.20% from the portfotio with the new weiphts. Does he think that the required return as compared to expected retums is undervalued, overvalued, or fairly valued? Fairly valued Undervalued Overvalued Suppose instead of repiacing Atteric Inci's stock with Transfer Fuels Co.'s stock, Gregory considers replacing Atteric Inci's stock with the equal doilar allocation to shares of Company X's stock that has a higher beta than Atteric Inc. If everything eise remains constant, the portfolio's risk would