Does anyone know how the calculation of components of implementation shortfall will change if we are selling instead of buying? Additionally, in problem 10 from CFAI Text, Estimated Cost = (BM price - Trade Price) x Trade size which appears to be very different from the way Sch shows cost calculation. Can anyone reconcile the two In Problem 11 Part B, Delay costs use BM price from Monday instead of Tuesday, even though the problem states that BM falls to 9.99. Anyone?
inbead Wrote: ------------------------------------------------------- > Does anyone know how the calculation of components > of implementation shortfall will change if we are > selling instead of buying? > > Additionally, in problem 10 from CFAI Text, > Estimated Cost = (BM price - Trade Price) x Trade > size which appears to be very different from the > way Sch shows cost calculation. Can anyone > reconcile the two I am doing this from memory. Isn’t this just the absolute amount of the shortfall, vs the percentage amount? > > In Problem 11 Part B, Delay costs use BM price > from Monday instead of Tuesday, even though the > problem states that BM falls to 9.99. Anyone? What day was the order filled? If it was Wednesday, this makes sense. Realized G/L is the difference between the fill price and the close yesterday. Delay costs are from the close price used above to the BM price. Imagine a timeline where you are working backwards.