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11-38. 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. . Required Return = 4%+80%(.2)x14 (21%-14%) 20% L=10.4% You should add some of the venture fund to your portfolio because it has an expected return that exceeds the required return