6. Portfolio beta and weights Gregory is an analyst at a wealth management firm. One of his clients holds a $7,500 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: standard Deviation 38.00% 42.00% 45.00% 49.00% Investment Allocation 35% 20% 15% 30% stock Beta 0.750 1.500 1.100 0.300 Atteric Inc. (AI) Arthur Trust Inc. (AT) Lobster Supply Corp. (LSC) Transfer Fuels Co. (TF) Gregory calculated the portfolio's beta as 0.818 and the portfolio's expected return as 8.50%. 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 Transfer Fuels 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 portfolio's required return change? O 1.08 percentage points O 0.68 percentage points O 1.00 percentage points O 0.87 percentage points Analysts' estimates on expected retuns from equity investments are based on several factors. These es also often indlude subjective and judgmental factors, because different analysts interpret data in different ways timations suppose, based on th with the new weights. Does he think that the revised portfolio, based on the changes he recommended, is undervalued, overvalued, or fairly valued? e earnings consensus of stock analysts, Gregory expects a return of 9.13% from the portfolio suppose, based on the earnings consensus of stock analysts, Gregory expects a return of 9.13% 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? O Overvalued O Fairly valued undervalued suppose instead of replacing Atteric Inc.'s stock with Transfer Fuels co. s stock, Gregory considers replacing Atteric Inc.'s 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