Which of the following is true for dollar cost averaging?

Question

Quizplus · Accepted Answer

Dollar cost averaging is a strategy where an investor divides up the total amount to be invested across periodic purchases of a target asset in an effort to reduce the impact of volatility on the overall purchase. The purchases occur regardless of the asset's price and at regular intervals. This strategy implies buying more shares when prices are low and fewer shares when prices are high, hence, option C correctly describes this approach as it involves purchasing an equal dollar amount of the same stock at equal time intervals.

Which of the Following Is True for Dollar Cost Averaging