Strategy Beginner: Dollar Cost Averaging

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1.
With dollar cost averaging, when the share price rises, you buy more shares, and when the share price falls, you buy fewer shares.
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False. You always invest the same dollar amount, so when the share price rises, you buy fewer shares, and when the share price falls, you buy more shares.
2.
Compared to buying the same number of shares each period, if you invest the same amount of money instead with dollar cost averaging, you will usually _________.
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Pay less per share. When you average the prices you pay, you find that you have paid less per share.
3.
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.
4.
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.
5.
Imagine that you have bought $800 worth of stock shares over four months. Due to price fluctuations, the number of shares you bought was 195. What is the average price per share?
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$4.10. Divide the total amount you paid ($800) by the number of shares bought (195).