Variance of the net present worth from investing in stock

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Reference no: EM132008901

You are investing $6,000 immediately in a stock that you will keep for 9 years. At the end of 9 years, the stock will be worth $13,589 with a probability of 0.56 and worth $15,729 with a probability of 0.44. 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 12% with a probability of 0.89 or 24% with a probability of 0.11. Your MARR is 7.7% What is the variance of the net present worth from investing in the stock.

Reference no: EM132008901

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