Brandon is an analyst at a weath management frm$.$ One of his clients holds a $55,000$ portolto that consists of four stocks. The Investment allocation.

In the portfolio along with the contribution of risk from wich stock is given in the following table:

Beta

Alteric inc. $($Al$)$

$35\mathrm{.}00\%$

$20\%$

$1\mathrm{.}400$

$42\mathrm{.}00\%$

U Corp: $($LC$)$

$15\%$

$45\mathrm{.}00\%$

Transter Fuels Co$.($TT$)$

$30\%$

$0\mathrm{.}500$

$49\mathrm{.}00\%$

Brandon calculated the portiolloy beta as $0\mathrm{.}188$ and the portiolo required return as $12\mathrm{.}6600\%.$

brandon thinks I wil be a good loes to reallocate the funds in his chent's portfolio. Me recommends replacing Alterle incis shares with the same amount in acditional shares or Transter fuels Co$,$ The nsletree race is $01\%,$ and the market nak premum is $7\mathrm{.}50\%$

According to brandon's recommendation, assuming that the market is in equiibrium, how much wis the portionos required return change? $($Note: Do not reund your intermediate calculations.$)$

$0\mathrm{.}5145$ percentage points

O $0\mathrm{.}7590$ percentage points

$0\mathrm{.}0600$ percentage ponte

O $0\mathrm{.}8154$ percentage points

Anatysts egomates on expected returns from equity investments are based on several factors. These estimations also often include subjective and

Suppose, based on the earnings consensus of stock analysts, Brandon expects a return of $13\mathrm{.}50\%$ from the portiolio with the new weights. Ooes he Pink that the required retar as compared to expected returns is undervalued, overvalued, ce fairty valued?

O Fairy, valued

O Overvalued

O undervalued

hoppose instead of replacing Acteric loc. stock with Transter Futis Coy stock, Brandon considers replacing Attene Inc. y stock with the egual doll stocason to ghares of Company X$\text{'}$s stock that has a higher beca than Alterk, inc. I everything eise remains constant, the reguired retur from the