The "lockup" problem involved in rebalancing refers to the problem that:
A) retirement accounts cannot be liquidated prior to retirement.
B) trust accounts cannot be traded without incurring administrative costs.
C) taxable accounts are subject to capital gains taxes if appreciated assets are sold.
D) illiquid fixed income securities must be held until maturity.

Question

Quizplus · Accepted Answer

The "lockup" problem in rebalancing refers to the issue of incurring capital gains taxes when selling appreciated assets in taxable accounts.

The "Lockup" Problem Involved in Rebalancing Refers to the Problem