Question: please answer asap Sharon is an analyst at a wealth management firm. One of her clients holds a $10,000 portfolio that consists of four stocks.

Sharon is an analyst at a wealth management firm. One of her 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. Investment Allocation 35% Beta Standard Deviation 0.750 0.38% Arthur Inc 20% 1.400 0.42% Corp. 15% 1.200 0.45% Baque Co. 30% 0.400 0.49% Sharon calculated the portfolio's beta as 0.842 and the portfolio's expected return as 12.32% Sharon thinks it will be a good idea to reallocate the funds in her client's portfolio. She recommends replacing Atteric Ine's shares with the same amount in additional shares of Baque Co. The risk-free rate is 6.00%, and the market risk premium is 7.50%. According to Sharon's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change? O 0.72% 1.06% 1.14% O 0.92% X According to Sharon's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change? 0.7296 O 1.06% 1.14% 0 0.92% 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, Sharon expects a return of 11.39% 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 Atteric Inc.'s stock with Baque Co's stock, Sharon considers replacing Atteric inc' 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 and the required return from the portfolio would Grade It Now Save Continue
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