Portfolio Turnover

[Galli]

Regarding quesiton 13, page 54 of volume 6.
Questions states a portfolio manager is looking to rework the portfolio this year. Expects 200% of the portfolio to ‘turnover’ throughout the year. The turnover costs at 75BP.
I was thinking the transaction to get to a 200% turnover is 2x the value of the portfolio. Meaning 1 entire sale of the portfolio + 1 entire purchase of the portfolio. Therefore the transaction costs would be 2 * portfolio value * .75% = 1.5% transaction costs
The answer gives 3% as they say to turn over the portfolio twice you have to round trip the portfolio twice (buy, sell)*2.
Why does it seem like the portfolio turnover is 400% not 200%? Any thoughts?

 

[cpk123]

each time you turn over your portfolio - you are selling your portfolio and buying again. So it is 2 sets of transactions. And each set - buy and sell has a cost of 2 x 75 bps = 1.5% each way.
2 Times portfolio (due to the 200% turnover) * 2 sets of transactions (buy+sell each time) * 75 bps = 300 bps = 3% transaction cost.