标题: Reading 41: Execution of Portfolio Decisions－LOS a [打印本页]
作者: tycoon 时间: 2008-9-17 15:49 标题: [2008] Session 14－Reading 41: Execution of Portfolio Decisions－LOS a
CFA Institute Area 3-5, 7, 12, 14-18: Portfolio Management
Session 14: Execution of Portfolio Decisions
Reading 41: Execution of Portfolio Decisions
LOS a: Compare and contrast market orders to limit orders, including the price and execution uncertainty of each.
作者: tycoon 时间: 2008-9-17 15:50
A market order has:
| A) | execution uncertainty but not price uncertainty. |
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B) | price uncertainty but not execution uncertainty. |
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| C) | both price uncertainty and execution uncertainty. |
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| D) | neither price uncertainty nor execution uncertainty. |
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Answer and Explanation
A market order is an order to execute the trade immediately at the best possible price. The emphasis in a market order is the speed of execution (the reduction of execution uncertainty). The disadvantage of a market order is that the price it will be executed at is not known ahead of time, it thus has price uncertainty.
作者: tycoon 时间: 2008-9-17 15:51
A limit order has:
| A) | price uncertainty but not execution uncertainty. |
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B) | execution uncertainty but not price uncertainty. |
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| C) | both price uncertainty and execution uncertainty. |
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| D) | neither price uncertainty nor execution uncertainty. |
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Answer and Explanation
A limit order is an order to trade at the best possible price, subject to the price satisfying the limit price. A limit order emphasizes the price of execution (the reduction of price uncertainty). It however, may not be filled immediately and may even go unfilled or partially unfilled. A limit order thus has execution uncertainty.
作者: tycoon 时间: 2008-9-17 15:51
A trader submits a buy order that specifies that the trade must be executed at $40 by the end of the day. The execution price is $39.88. What type of order has the trader executed?
Answer and Explanation
A limit order is an order to trade at the best possible price, subject to the price satisfying the limit price. For buy orders, the execution price (here $39.88) must be lower or equal to the limit price (here $40). Limit orders also have an expiration date, beyond which they expire.
作者: tycoon 时间: 2008-9-17 15:52
In which of the following markets would the calculation of market impact costs be inappropriate?
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C) | Electronic crossing networks. |
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| D) | Electronic limit-order markets. |
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Answer and Explanation
In an electronic crossing network, orders are executed at the average of the bid and ask quotes. Prices do not adjust based on supply and demand.
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