Should you add the vc fund to your portfolio

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You are currently invested in the Farrallon Fund, a broad-based fund of stocks and other securities with an expected return of 8% and a volatility of 33%. Currently, the risk-free rate is 2%. Your broker suggests that you add a new VC fund to your current portfolio. The VC fund has an expected return of 21% and a volatility of 76%. It has a correlation of 0.19 with the Farrallon Fund. Should you add the VC fund to your portfolio? Explain. (Hint: Assume that the fund is the "market" portfolio).

Reference no: EM131737387

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