Difference between selling and buying prices of the stock

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Reference no: EM132033155

"You are investing $6,000 immediately in a stock that you will keep for 7 years. At the end of 7 years, the stock will be worth $13,056 with a probability of 0.55 and worth $17,526 with a probability of 0.45. 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 8% with a probability of 0.85 or 16% with a probability of 0.15. Your MARR is 6.1% What is the variance of the net present worth from investing in the stock?"

Reference no: EM132033155

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