Identifier: C5T5L1 · Revision: 2026-10-26 · Classification: domestic

Decision and objectives

The practical task is to validate timestamps, currency units and corporate-action adjustments. Make the decision reproducible: name the exposure, time horizon, cash requirement and comparison baseline before selecting a product.

Objectives: Validate timestamps, currency units and corporate-action adjustments; Reconstruct total returns from original price and cash records; Identify a comparison that mixes stale and current observations.

Prerequisite: C5T4L4; completed Classes 1–4 and the Stock Market School foundation or Forex School foundation. Every example is hypothetical. Prices, dates, rates, fees, contract factors, policies and tax schedules are supplied teaching inputs, not current offers or legal parameters. No live account is needed.

Mechanics

A price observation needs instrument identity, venue, date/time, currency, unit and status as a trade, quote or valuation. A fund unit dated today may reflect underlying markets that closed earlier. Comparing it with a current futures quote can create a false apparent gap. Corporate actions change quantities and price scales; using an adjusted chart with raw share counts can distort returns.

Preserve the original source and its publication time. A later correction must be distinguishable from the version available at decision time. For foreign exposure, align the relevant FX timestamp rather than automatically using today's reference for yesterday's asset mark.

Price and return drivers

Total holding return = (ending position value + received distributions − starting value − nonembedded costs)/starting value, with no external flows in this simplified case. Base-currency return for a foreign asset, before costs, is (1 + asset-currency return) × (1 + FX return) − 1. Additive approximations omit the interaction term.

Worked case

Hypothetical 100 shares at TRY 100, initial TRY 10,000. A two-for-one split creates 200 shares; ending price TRY 55 and distribution TRY 2 per post-split share. Ending shares TRY 11,000 plus cash TRY 400 = TRY 11,400, so gross total return 14%. Reading only 55/100 − 1 incorrectly reports −45%. Separately, a hypothetical dollar asset rises from USD 100 to USD 105 while TRY/USD rises 40 to 44. Initial lira value TRY 4,000, end TRY 4,620, return 15.5%, equal to 1.05 × 1.10 − 1. Both are original synthetic records, not live quoted executions.

Adverse case

If the share exit actually fills at TRY 54.50 and total costs are TRY 100, ending net wealth including distribution is 200 × 54.50 + 400 − 100 = TRY 11,200, a 12% return. A stale end-FX value of 40 would report only 5% on the dollar asset instead of 15.5%. The data error and execution cost are different issues; one cannot be corrected by adding a generic risk warning.

Practical use

Use official corporate-action disclosures, product records and time-stamped market data; the dated Borsa KAP notice in the source ledger demonstrates publication/effective-date fields, not a current eligibility conclusion. Verify quote sides and the actual contract/fund valuation convention. Include fees, distributions, FX conversion, custody and tax consistently. A chart download without its adjustment definition is insufficient evidence for a tax or trade record.

Use permitted domestic access routes and the actual instrument documents. Verify intermediary authority, investor eligibility, order/redemption terms, settlement, custody and executable size before implementation. Reconcile spread and commissions, funding, collateral, custody, product expenses, conversion and exit charges; an amount already embedded in a fill or fund unit price is not deducted again. A published mark or product description does not promise an executable price or liquidity.

Tax is excluded unless a numerical schedule is expressly supplied as hypothetical. For actual rules record income year, residence and individual/corporate status, instrument and acquisition/contract dates, taxable event and rule effective date. The GIB investment-income guide, checked 2026-10-26, covers 2025 individual income; its 2026 publication date alone cannot settle a 2026 liability.

Decision boundaries

Compare only compatible observations or explicitly label the mismatch and uncertainty. Do not construct a hedge from an artificial return caused by a split or stale FX. Defer a precise relative-value claim if synchronized data and an auditable adjustment are unavailable.

Practice and references

Exercise: hypothetical 50 shares at TRY 80 undergo a two-for-one split; 100 shares end at TRY 44 and pay TRY 1 each; costs TRY 50. Solution: ending wealth 4,400 + 100 − 50 = TRY 4,450; start TRY 4,000; return 11.25%. The raw 44/80 price comparison is not the investor return.

Takeaway: Identify a comparison that mixes stale and current observations with the cash dates, costs and remaining risks stated.

Product card: portfolio-decision-record. Formula: Multiplicative base-currency return. Glossary: Adjustment factor, Timestamp alignment. Next lesson: C5T5L2. Topic test.

Sources checked 2026-10-26:

Shared reference guide