Question
Suppose you are the only buyer all day, and push the price up a lot. Which is the most appropriate measure of your transaction cost?
Suppose you are the only buyer all day, and push the price up a lot. Which is the most appropriate measure of your transaction cost?
Group of answer choices
VWAP-based Cost: TC$,VWAP = P(execution) - VWAP
Realized Cost: TC$,temporary = P(execution) - P(later)
Effective Spread: TC$ = P(execution) - P(before)
Bid-ask Spread: TC = P(ask) - P(bid)
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
16th edition
125927716X, 978-1259687969, 1259687961, 978-1259277160
