Added value from Reading 34

CFA Level III Portfolio Management
#1

Hi all,
Does anybody understand what’s going on in the example at the bottom of page 158?

I understand they get added value = 10 bps using. From the reading it says, if the fund executes at a higher cost then the pre-trade estimate then there is underperformance. Do they just mean if arrival cost > estimated pre-trade cost then it’s underperformance?

#2

Yes, that is what they mean.

#3

Thanks, why they didn’t just write that is odd.