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"You are investing $6,000 immediately in a stock that you will keep for 15 years. At the end of 15 years, the stock will be worth $16,394 with a probability of 0.4 and worth $19,931 with a probability of 0.6. 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 14% with a probability of 0.82 or 28% with a probability of 0.18. Your MARR is 5.6% What is the variance of the net present worth from investing in the stock?"

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Financial Management, Finance

Category:- Financial Management
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