2. In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund of stocks

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2 In Addition To Risk Free Securities You Are Currently Invested In The Tanglewood Fund A Broad Based Fund Of Stocks 1 (23.81 KiB) Viewed 29 times

2. In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund of stocks and other securities with an expected return of 12% and a volatility of 25%. Currently, the risk-free rate of interest is 4%. Your broker suggests that you add a venture capital fund to your current portfolio. The venture capital fund has an expected return of 20%, a volatility of 80%, and a correlation of 0.2 with the Tanglewood Fund. Calculate the required return and use it to decide whether you should add the venture capital fund to your portfolio.