In addition to risk-free securities you are currently


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 7.16% and a volatility of 26.94%. Currently, the risk-free rate of interest is 3.31%. Your broker suggests that you add a venture capital fund to your current portfolio. The venture capital fund has an expected return of 25.78%, a volatility of 74.84 %, and a correlation of 0.18 with the Tanglewood Fund. Calculate the required return and use it to decide whether you should add the venture capital fund to your portfolio.

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Financial Management: In addition to risk-free securities you are currently
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