Sample Question #30 (finance case question)
There are two stocks A and B. I already own A, but I’m thinking of buying B to replace A. (I can only own either A or B at the same time.) I’m a U.S.-based investor subject to all U.S. taxes. How will my tax situation affect my decision whether to keep A, or to sell A and buy B? Please explain in detail.
[Courtesy of Dr. Warren Hrung of the New York Fed]