Quant Interview Practice Questions

Accurate backtesting requires modeling transaction costs, often decomposed into linear components like bid-ask spreads and quadratic components representing market impact. These costs significantly affect the realized Profit and Loss (PnL) of a trading strategy, necessitating precise calculation methods for realistic performance evaluation. Task Implement the function solution(prices, positions, linear_impact, quadratic_impact) to calculate the cumulative Net PnL and Total Transaction Costs for