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NEW QUESTION: 1
Kim Simpson, CFA, manages a $75 million multi-cap growth portfolio. Simpson utilizes a growth at a reasonable price (GARP) investment strategy and her investment universe consists of small, medium and large capitalization stocks. She turns the entire portfolio over once each year. Simpson is concerned about the amount of trading costs she has generated through the implementation of her investment strategy.
Simpson decides to conduct a trade cost analysis with the cooperation of her trader, Janet Long, CFA.
Simpson believes the results of the trading analysis can be used to improve trading performance and help to refine her investment strategy. The first trade they examine is a purchase of 2000 shares of Technology Company that was completed using a market order. Simpson remembers adding to her Technology Company position based on her analyst's recommendation that the company was going to generate earnings significantly above the consensus estimate in a soon to be released earnings report. The order was split into two trades as shown in Figure 1.
Figure 1: Technology Company buy order for 2000 shares

In conducting a comprehensive analysis of the trading markets, Simpson states that she is most concerned about market liquidity. Simpson defines a market with good liquidity as one with diversity of opinion, many buyers/sellers and relatively wide bid-ask spreads. In addition to reviewing market liquidity, Simpson believes that, in order to assess market quality, both the ease with which investors can obtain accurate information and the certainty that a trade will be completed must be evaluated.
Simpson and Long review their trade of Nano Corporation, a small biotechnology company. Simpson used a limit order because her analyst had established a specific buy target and she wanted to hold down transaction costs. To handle both explicit and implicit trading costs, Simpson measures execution costs using implementation shortfall. The buy order for 100,000 shares of Nano stock has the following timeline:
* Nano stock price closes at $35.00 per share.
* Day one: Simpson places a limit order for 100,000 shares of Nano stock at $34.75 per share or better at the opening of trading. However, Nano's stock never falls below $35.00 per share and closes at $36.50 per share.
* Day two: Simpson adjusts her limit order price to $37.00 per share or better. Long is able to fill 50,000 shares of the order at $36.75 per share. Nano's stock climbs to $38.00 per share during the day and Simpson moves the limit price to $40.00 per share or better. Long completes the purchase of the remaining 50,000 shares of Nano at $40.00 per share, which is also the closing price of Nano's stock.
* The commission for each block trade is $2,500.
Long suggests implementing the Best Execution concept as established by the CFA Institute in its Trade Management Guidelines. Long states best execution would accept a high portfolio turnover strategy provided the overall portfolio value is greater after trading costs. Long asserts that her professional relationships are integral to best execution.
The explicit cost component of the total implementation shortfall for the Nano Corporation trade is closest to:
A. 0.25%.
B. 0.35%.
C. 0.15%.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Implementation shortfall can be decomposed into explicit costs, realized profit/loss, delay costs, and missed trade opportunity cost (MTOC).
Paper portfolio investment = (35x100,000) = 3,500,000

Total implementation shortfall = 0.00143 + 0.05357 + 0.04286 + 0 = 0.09786 (Study Session 16, LOS 45-f)

NEW QUESTION: 2
A vSphere Administrator has VM Component Protection (VMCP) enabled, but the VM was not restarted when one of the VMFS datastores experienced an All Paths Down (APD) failure.
What two scenarios would explain why the virtual machine was not restarted? (Choose two.)
A. VM Monitoring is required in order for VMCP to failover during an APD event.
B. VMware Tools is not installed on the guest operating system for the VM.
C. Insufficient Capacity is available on the failover ESXi hosts.
D. The APD failure was corrected before the VM could be restarted.
Answer: C,D

NEW QUESTION: 3
In order to make the proof of intent easier in proving shoplifting, many stores have a policy that:
A. Requires apprehension of the suspect as soon as the theft occurs
B. None of the above
C. Requires apprehension only upon issuance of a warrant
D. Requires apprehension of the suspect as soon as the material is concealed
E. Requires apprehension of the suspect to be made after the accused leaves the premises
Answer: E


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