Rafael is an analyst at a wealth management firm. One of his clients holds a $10,000 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: Stock Atteric Inc. (AI) Arthur Trust Inc. (AT) Li Corp. (LC) Transfer Fuels Co. (TF) Investment Allocation 0.9009 percentage points 1.3283 percentage points 35% 20% 15% 30% 1.1550 percentage points Beta 0.900 1.400 1.100 0.300 Rafael calculated the portfolio's beta as 0.850 and the portfolio's required return as 8.6750%. Rafael 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 Transfer Fuels Co. The risk-free rate is 4%, and the market risk premium is 5.50%. 1.4322 percentage points Standard Deviation According to Rafael'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.) 23.00% 27.00% 30.00% 34.00%

Rafael is an analyst at a wealth management firm. One of his clients holds a $10,000 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: Rafael calculated the portfobio's beta as 0.850 and the portfolio's required return as 11.6750%. Rafael thinks it will be a good idea to reallocate the funds in his client's portfollo. He recommends replacing Atteric Inc's shares with the same amount in additional shares of Transfer fueis Co. The risk-free rate is 4%, and the market risk premium is 5.50%. According to Rafael's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change? (Note: Do not round your intermediate calculationsi) 0.9009 percentage points 1.3283 percentage points 1.1550 percentage points 1.4322 percentoge points