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Consider the following information on two stocks in the portfolio: Stock Shares Outstanding Price, $ at time 0 at time 1 A 100 50 55

Consider the following information on two stocks in the portfolio:

Stock Shares Outstanding Price, $ at time 0 at time 1

A 100 50 55

B 100 50 45

At time 1, the portfolio has to be rebalanced back to its original weights. Given the tax rate on capital gains of 20%, how many shares of one of the two stocks do you have to sell?

Between 8.6 and 9.6

Between 9.6 and 10.6

Between 10.6 and 11.6

Between 11.6 and 12.6

Between 12.6 and 13.6

Between 13.6 and 14.6

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