Strategy Beginner: Dollar Cost Averaging

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1.
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 _________.
Choose wisely. There is only one correct answer.
Pay less per share. When you average the prices you pay, you find that you have paid less per share.
2.
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?
Choose wisely. There is only one correct answer.
$4.10. Divide the total amount you paid ($800) by the number of shares bought (195).
3.
In dollar cost averaging, the formula for average price per share is this: total amount paid divided by number of shares bought.
Choose wisely. There is only one correct answer.
True. Total amount paid and number of shares bought are the two factors that yield the average price per share.
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.
Choose wisely. There is only one correct answer.
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.
With dollar cost averaging, when the share price rises, you buy more shares, and when the share price falls, you buy fewer shares.
Choose wisely. There is only one correct answer.
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.