# Imp shortfall

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

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).

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

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

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

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

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

Good stuff. I prefer memorizing the calcs though : )

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

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!