The options for the last question are "increase" or "decrease"

12. Portfoliobeta and weights Becky 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 Investment Allocation Beta Standard Deviation 0.23% Atteric Inc. 35% 0.750 20% 1.600 Arthur Inc. Lobster Supply Corp. 0.27% 0.30% 15% 1.300 Baque Co. 30% 0.300 0.34% Becky calculated the portfolio's beta as 0.858 and the portfolio's expected return as 3.77%. Becky thinks it will be a good idea to reallocate the funds in her client's portfolio. She recommends replacing Atteric Inc.'s shares with the same amount in additional shares of Baque Co. The risk-free rate is 4.00%, and the market risk premium is 5.50%. According to Becky's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change? 1.08% O 1.00% O 0.68% 0.87% 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, Becky expects a return of 7.89% 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? Undervalued O Fairly valued Overvalued Suppose instead of replacing Atteric Inc.'s stock with Baque Co.'s stock, Becky 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 required return from the portfolio would