Series 7 practice questionhardPortfolio Management 650
Dollar-cost averaging involves:
- Abuying only when a stock falls 10%
- Bliquidating winners every month
- Cselling puts to finance stock purchases
- Dinvesting a fixed dollar amount at regular intervals✓ Correct answer
Explanation
Why D — investing a fixed dollar amount at regular intervals
Dollar-cost averaging spreads purchases over time by investing a fixed dollar amount periodically. This often results in buying more shares when prices are lower and fewer when prices are higher.
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