Identification of THREE transaction cost methodologies.
marketing
Description
[1] Outline three types of transaction costs analyses that can be used to optimise trader’s strategies?
(Note: At least three transaction costs analyses should be discussed, with a description of their pros
and cons. References to academic articles are required) [25 marks]
The main points/questions that should be addressed include:
- Describe at least three types of TCA that can be performed.
- For each of the TCAs identified, outline their pros and cons
- References to several academic articles are required.
Marking criteria:
Identification of THREE transaction cost methodologies. Research of the methodologies, linking to
academic assessments of the rigor of the methods. Demonstrates extensive original research and
analysis, does not repeat analysis on VWAP from part (1). Does not overly rely on lecture materials.
Analyses how the methodologies may optimise a trader’s strategies, with links to real world issues
such as dark pools/ algorithmic execution strategies incorporating TCA
Pros and Cons are considered explicitly and in detail
[2] What is the impact of institutional trading on stock prices? Has this impact changed over the last few
years? (Note: References to academic articles are required) [25 marks]
The main points/questions that should be addressed include:
- Document how the impact of institutional trading on stock prices has changed over time.
- Where appropriate, provide a table (literature review) of seminal papers in this area with summary
findings.
Marking criteria:
Identification of at least two impacts of institutional trading on stock prices
Research of the impacts, linking to academic articles and real world examples. Does not overly rely
on lecture materials
Analyses how the impact has changed in recent years
Australia: has a consideration of how the impacts discussed relates to the Australian market
