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Which of the following is the most valid argument for including venture capital investments in a traditional multi-asset class portfolio?
A. Venture capital investments tend to have low correlations with other asset classes.
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Answer: A
Explanation:
Venture capital is a separate asset class, and exhibits low correlations with other traditional asset classes. Therefore, venture capital offers potential for further diversification for a traditional assets portfolio. Venture capital investments are highly risky- more than 10% of them lose 100% of their values.
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