Is there a difference between benchmark close and benchmark price? I have only seen it as the same, but I suppose they could be different amounts?? Not quite sure what that would be though.
I can’t see this as being different. The Benchmark price is the closing the day before you decide to buy or sell that stock
Not nessisarily. I’ve seen practice exams (Schweser) where the benchmark is set when the trader decides to make a trade at 10am when the price is $X…not the closing price the day before but the price of the asset when the person decides to make the trade, what ever time of the day that is. If its after the close then the closing price is used. I have used that as my rule of thumb…
Pretty sure AFJ is correct here. I haven’t looked at this in a long time though.
CFAI has used the bmark price as the previous close (see 06 exam). WHen the trader receives the trade, that is the decision price, where imp shortfall breaks down to: explicit - commissions/paper port (benchmark*shares) delay - decision price-bmark/bmark *shares/ordered realized - execution-decision/bmark * shares/ordered op cost - close price-bmark/bmark * shares not filled/shares the way i remember it, if it helps, is explicit costs are easy to remember, but the formulas line up as DEC as you go down (decision, execution, close) minus BDP (bmark, decision, bmark) all over bmark.
Makes sense, thanks for this clarification.