tax drag/capital gain tax

CFA Level III Portfolio Management
#1

schweser mock 2nd Book exam 1 PM Q46&47

is there any contradiction between these two answers?

if the tax drag % = cg tax %, B (cost basis/current market value) should = 1

but from Q46: cost basis is 250k & no information is given for the current market value of the stocks…

and if B = 1, current market value should be 250k as well, and in this case, the answer of Q46 is not correct…

any ideas?

many thanks!!

#2

i guess i should assume B = 1 so that the answer of Q46 is also correct

I am sorry I misunderstood the Q46, it actually ask for the gain, not FV… so the answer (FV - cost basis) is correct