please answer all parts. all is apart of 1 question. please explain all parts pease. this is my 3rd time posting this trying to get help. thank you
1. according to gregs recommendation, assuming the market is at equallibrium, how much will be the portfolios rate of return?
2. over, under, or fairly valued
3. suppose instead of replacing atteric inc's stock with baque co's stock...
(increase or decrease)
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 allocation in the portfolio along with the contribution of risk from each stock is given in the following table: Gregory calculated the portfolio's beta as 0.8250 and the portfolio's expected return as 8.54%. 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 amount in additional shares of Baque C0. 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 portfollo's required return change? (Note: Round your intermediste calculations to two decimal places.) Gregory calculated the portfolio's beta as 0.8250 and the portfolio's expected return as 8.54%. Gregory thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Atteric tnc's shares with the same amount in 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 portfollo's required return change? (Note: Round your intermediate calculations to two decimat places.) 0.15 percentage points. 0.24 percentage points 0.19 percentage points 0.22 percentage points 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, Gregory expects a return of 6.85% from the portfolio with the new weights. Does he think that the revised portfolio, based on the changes he recommended, is undervalued, overvalued, or fairly valued? Overvalued Undervalued Fairly valued Suppose, based on the earnings consensus of stock analysts, Gregory expects a return of 6.85% from the portfolio with the new weights. Does he think that the revised portfolio, based on the changes he recommended, is undervalued, overvalued, or fairly valued? Overvalued Undervalued Fairly valued Suppose instead of replacing Atteric Inc.'s stock with Baque Co's stock, Gregory considers replacing 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 beta would and the required return from the portfolio would