Can anybody help to tell me what is wrong with the allocation？It is not explained in the answer. thank you!
According to Black, the Fund should have gotten 20,000 shares, not 50,000 shares.
thank you. i figured it out. the 30 000 shares were removed at the current maket price. this method of correction is wrong, because a loss may have incurred if current price is below the purchase price. it would be unfair for the fund to bear the loss. Thus the method of correction is inconsistent with the standards. the shares should be removed at the purchase price.
Sorry. I misunderstood your question. I thought that you were asking about the reason that the shares were removed.
You’re correct: the fix should restore the Fund to what it would have been without the error; no gain, no loss, and no loss on interest on cash.