MM Mock 4 AM Question 6A

CFA Level III
#1

Does original decision price always equal benchmark price (for calculation of explicit costs, delay costs and other components of implementation shortfall)?

#2

  1. Missed trade (CP - DP)*shares missed

  2. Explicit cost

  3. Delay/Slippage (BP-DP)*shares executed

  4. Unrealized g/l, market impact (EP-DP)*shares executed OR (EP-BP)*shares executed

You use BP when there’s a delay.

Your DP = 2502 BP = 2508 because there was a delay