Strategy Beginner: Dollar Cost Averaging

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1.
In dollar cost averaging, what is the formula for average price per share?
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Total amount paid divided by number of shares bought. This yields the average price you paid per share.
2.
Dollar cost averaging is the practice of _______.
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Putting the same amount of money into an investment each period. In other words, you are buying the same dollar amount of shares each period.
3.
To use dollar cost averaging, you must invest in the same _______ every time you invest.
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Dollar amount of shares. When using dollar cost averaging, you must invest the same amount of money every time you invest.
4.
On the average, investing the same amount of money each period with dollar cost averaging allows you to pay less per share than you would if you had bought the same number of shares each period.
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True. When you average the prices, you find that you have paid less per share than you would have if you had bought the same number of shares each period.
5.
In dollar cost averaging, the formula for average price per share is this: total amount paid divided by number of shares bought.
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True. Total amount paid and number of shares bought are the two factors that yield the average price per share.