Question

A long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals in time is called:
a. dollar cost averaging.
b. dividend reinvestment plan.
c. regulated transaction.
d. secured transaction.

Answer 1

The answer would be : A. dollar cost averaging

Dollar-cost averaging technique is a long-term technique to buy a fixed dollar amount of a particular investment, regardless of it's market price fluctuation. Since we invest in a fixed amount investment, the investment will eventually lead to profit, ( though it may take a longer time than those who affected by market's fluctuation)