Rafael calculated the portfolio's beta as 0.920 and the portfolio's expected return as 12.90%. Rafael thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Inc.'s shares with the same amount in additional shares of Co. The risk-free rate is 6%, and the market risk premium is 7.50%. According to Rafael's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change? 1.02 percentage points 1.31 percentage points 1.62 percentage points 1.51 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, Rafael expects a return of 13.09% 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? Fairly valued Undervalued Overvalued Suppose instead of replacing Inc.'s stock with. 's stock, Rafael considers replacing Inc.'s stock with the equal dollar allocation to shares of Company X's stock that has a higher beta than Inc. If everything else remains constant, the portfolio's beta would ______, and the required return from the portfolio would ______