Question
You are investing $6,000 immediately in a stock that you will keep for 13 years. At the end of 13 years, the stock will be
"You are investing $6,000 immediately in a stock that you will keep for 13 years. At the end of 13 years, the stock will be worth $13,464 with a probability of 0.6 and worth $19,651 with a probability of 0.4. When you sell the stock, you will need to pay taxes on the profit earned from selling the stock (i.e., taxes on the difference between the selling and buying prices of the stock). The tax rate will be 11% with a probability of 0.86 or 22% with a probability of 0.14. Your MARR is 6.4% What is the variance of the net present worth from investing in the stock?"
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