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by perfunctory
2808 days ago
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Very good example. Let's look at it. Note that the new expected value will be negative regardless of the tax rate. No matter how low it is. Even if the tax is 0%, the expected value is still, as you pointed out, $0. So a rational investor would not bet on this coin toss regardless. Also, as brorfred pointed out, capital losses are deductible, afaik. |
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