Suppose that every time a fund manager trades stock, transaction costs such as commissions and bid−ask spreads amount to
Posted: Wed Jul 06, 2022 6:18 pm
Suppose that every time a fund manager trades stock, transactioncosts such as commissions and bid−ask spreads amount to 0.5% of thevalue of the trade.If the portfolio turnover rate is 60%, by how much is the totalreturn of the portfolio reduced by trading costs?