In addition torisk-free securities, you are currently invested in the TanglewoodFund, abroad-based fund of stocks and other securities with an expected return of 10% and a volatility of 23%. Currently, therisk-free rate of interest is 5%. Your broker suggests that you add a venture capital fund to your current portfolio. The venture capital fund has an expected return of 18%, a volatility of 82%, and a correlation of 0.2 with the Tanglewood Fund. Assume you follow yourbroker's advice and put 50% of your money in the venturefund:

a. What is the Sharpe ratio of the TanglewoodFund?

b. What is the Sharpe ratio of your newportfolio?

c. What is the optimal Sharpe ratio you can obtain by investing in the venturefund? (Hint: Use Excel and round your answer to two decimalplaces.)