Question

Which of the following factors represents an Implicit Cost of trading?

I.)   Bid-Ask Spread
II.) Commissions
III.) Opportunity Cost

		I and II only
		II only
		I and III only
		All of the above

Answer 1

When you trade in Shares, there are some explicit costs. These are charges like Brokerage Charges, Commissions, Taxes, etc. The explicit charges are known and generally planned for while buying or selling Shares. However, there are some implicit costs as well, which are generally not factored in while trading. These includes spreads, market impact cost, opportunity cost, delay cost, etc.

So from above imformation i can say thay SPREAD &OPPERTUNITY COST represented an Implicit cost of trading

So

I and III are correct

I)Bid ask spread

III) oppertuniy cost

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From Mona.......