Clancy thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Atteric Inc.$\text{'}$s shares with the same amount

in additional shares of Transfer Fuels Co$.$ The risk$-$free rate is $6\mathrm{.}00\%,$ and the market risk premium is $7\mathrm{.}50\%.$

According to Clancy's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change?

$1\mathrm{.}15\%$

$0\mathrm{.}73\%$

$0\mathrm{.}93\%$

$1\mathrm{.}07\%$

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, Clancy expects a return of $11\mathrm{.}83\%$ 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.$\text{'}$s stock with Transfer Fuels Co$.\text{'}$s stock, Clancy considers replacing Atteric Inc.$\text{'}$s stock with the equal dollar

allocation to shares of Company X$\text{'}$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