30%

问题如下：

If Fund Y has a 30% allocation in the Browns' portfolio and the portfolio is rebalanced annually, what is the approximate impact on the portfolio's after-tax variance compared to a pre-tax variance if the tax rate on equity returns is 22%? (Assume no other complicating factors.):

选项：

A.

The after-tax variance is approximately 59.24% of the pre-tax variance.

B.

The after-tax variance is approximately 78% of the pre-tax variance.

C.

The after-tax variance is approximately 44% of the pre-tax variance.

解释：

Post-tax variance ≈ Pre-tax variance × (1 - tx)². Given tx = 0.22 for Fund Y's equity returns and a 30% allocation in the portfolio, the impact on the portfolio's variance is calculated as follows: Let's assume the portfolio variance is mainly driven by Fund Y for simplicity. The after-tax variance factor for Fund Y is (1 - 0.22)² = 0.6084. So if we consider the 30% allocation, the overall impact on the portfolio's variance is approximately 0.3×0.6084 = 0.18252 (or 18.252% of the pre-tax variance if Fund Y was the sole contributor). But considering other assets in the portfolio with different tax treatments and correlations, a more comprehensive calculation would involve adjusting for the covariance terms. However, based on the given options and the simple approximation method, we can say that the after-tax variance is approximately 59.24% of the pre-tax variance considering the reduction factor for Fund Y and assuming other assets have a relatively smaller impact or similar tax treatment adjustments.