An investor’s portfolio currently is worth $1 million. During the year, the investor sells 400 shares of FedEx at a price of $175 per share and 1,600 shares of Cisco Systems at a price of $50 per share. The proceeds are used to buy 1,000 shares of IBM at $150 per share.

a. What was the portfolio turnover rate? 

b. If the shares in FedEx originally were purchased for $150 each and those in Cisco were purchased for $40, and if the investor’s tax rate on capital gains income is 15%, how much extra will the investor owe on this year’s taxes as a result of these transactions?