Trading costs can be decomposed into:
A) Explicit costs.
B) Implicit costs.
C) Soft dollars.
D) a and b only.
E) All of the above.

Question

Quizplus · Accepted Answer

Trading costs can be decomposed into explicit costs, such as commissions and fees, and implicit costs, such as the bid-ask spread and market impact. Soft dollars are a form of commission arrangement but are not a direct component of trading cost decomposition.

Trading Costs Can Be Decomposed Into