The E f ficient P o r t f olio and Requi r ed Re t u r ns In addition to risk-free securities, you are currently invested in the Tangle wood Fund, a broad- based fund of stocks and other securities...

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In addition to risk-free securities, you are currently invested in the Tangle wood 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 Tangle wood Fund. Calculate the required return and use it to decide whether you should add the venture capital fund to your portfolio.