Recommendations & StrategiesQuestion 49 of 110
Dollar-cost averaging involves which of the following?
a.Investing a fixed dollar amount at regular intervals regardless of price
b.Investing only when prices are at their lowest
c.Buying a fixed number of shares each period
d.Timing purchases to market peaks
Explanation
Dollar-cost averaging means investing a set dollar amount on a regular schedule, which buys more shares when prices are low and fewer when high, lowering the average cost per share over time. It removes the temptation to time the market. It does not guarantee a profit but imposes discipline.
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