Imp shortfall

CFA Level III
#21

I uploaded the ppt that bchadwick made to MediaFire if anyone wants it. http://www.mediafire.com/?sharekey=76ca2e61d50d299861d4646c62b381cb75f5f4264849c4f2ce018c8114394287

#22

For the example - why is the benchmark price 10.00 and not 9.98 which was the original decision price? thanks

#23

hh Wrote: ------------------------------------------------------- > For the example - why is the benchmark price 10.00 > and not 9.98 which was the original decision > price? > > thanks Read the text, they explain it well. But basically the price of the stock was $10 when the decision was made to purchase the stock. Just cause he put a limit order in of $9.98 does not mean it is a relevant benchmark price. Consider what the costs would be if we used his limit price as the benchmark and he put a limit to buy it at $1 (which is not reasonable).

#24

That was very helpful of you Bchadwick. Thank you very much!

#25

Great mnemonic. How does the schematic look when we a selling the stock ?

#26

Can someone email the powerpoint file to me please? Neither the youtube or mediafire link works for me. Thanks. qiujie@gmail.com

#27

surrogate - sent. People please try the link before emailing me: http://www.mediafire.com/?sharekey=76ca2e61d50d299861d4646c62b381cb75f5f4264849c4f2ce018c8114394287

#28

to complete the chart, I think the top let area represents the real portfolio gain in the equation Imp shortfall= (Paper porfolio gain-Real porfolio gain) in % term, imp shortfall= ( )/ paper portfolio investment

#29

WOW good job on the youtube video… you qualify to be an instructor at Schweser! :stuck_out_tongue:

#30

Good stuff. I prefer memorizing the calcs though : )

#31

why do they call that one element “realized gain/loss” that doesn’t seem what it is at all… i’d say today’s delay cost

#32

Great video bchad! Your way of figuring explicit costs seems very logical. For others with the Schweser material: Regarding explicit costs, on pg 124 of Schweser it calculates explicit costs as a percentage of the “paper portfolio investment.” Why are we dividing by the entire order as opposed to the amount of the filled order? Thanks!