Consider the price paths of the following two stocks over six timeperiods: Neither stock pays dividends. Assume you are an investor with the disposition effect and you bought at time 1 and right now it is time 3. Assume throughout this question that you do no trading(other than what isspecified) in these stocks.

a. Whichstock(s) would you be inclined tosell? Which would you be inclined to holdonto?

b. How would your answer change if right now is time6?

c. What if you bought at time 3 instead of 1 and today is time6?

d. What if you bought at time 3 instead of 1 and today is time5?

1 2 3 4 5 6

Stock 1 $10 $12 $14 $12 $13 $16

Stock 2 $15 $11 $8 $16 $15 $18

a. Whichstock(s) would you be inclined tosell? Which would you be inclined to holdonto?

Stock 1_____ Stock 2____

b. How would your answer change if right now is time6?

Stock 1_____ Stock 2____

c. What if you bought at time 3 instead of 1 and today is time6?

Stock 1_____ Stock 2____

d. What if you bought at time 3 instead of 1 and today is time5?

Stock 1_____ Stock 2____