Dollar cost averaging is a procedure by which an investor
A) buys more stock as its price increases.
B) times investments in order to buy low and sell high.
C) invests a fixed dollar amount in a security at fixed intervals.
D) maintains a constant ratio of conservative and aggressive investments.

Question

Quizplus · Accepted Answer

Dollar cost averaging involves investing a fixed dollar amount in a particular investment on a regular schedule, regardless of the investment's price. This strategy can potentially reduce the impact of volatility on the overall purchase. The investor buys more shares when prices are low and fewer shares when prices are high, averaging out the cost of the shares over time.

Dollar Cost Averaging Is a Procedure by Which an Investor