To calculate the implementation shortfall, we must also add in the explicit costs, which are the commission as a percent of the paper portfolio investment: $14/$20,000 = 0.07%. The total implementation cost is the sum of the explicit costs, the realized profit and loss, the delay costs component, and the missed trade opportunity cost component: 0.07%+0.16%+0.12%+0.09% = 0.44% |
