is this a dumb question or am i overanalyzing it? statements, following, regarding

yuoska

If the volume-weighted average price (VWAP) during a day was $21 and 100 shares were bought at $20.40, which of the following statements regarding the costs of trading is most accurate?
A) The implicit costs are $60.
B) The explicit costs are -$60.
C) The implicit costs are -$60.

bolligerallstar

C - implicit costs are -0.60? could there ever be negative explicit costs?

cfa10yrplan

Yeah you’re over analyzing it.
Explicit costs are hard numbers like trading costs and are easily observable and don’t need to be compared to find out.

luda002

Your implicit cost is -60 meaning that you are $60 to the good. Explicit is your commissions.
So it’s:
Explicit Costs (commissions)
Realized Gain or Loss
Delay Costs
Missed Opportunity Cost
In this case it’s a realized gain of $60.