If the Average Cost of a Stock Is $91

question 3

Multiple Choice

If the average cost of a stock is $91.86 as determined by dollar cost averaging,which of the following is true?

• A)You would lose money only if you sold your stock at less than $91.86.
• B)You would gain money only if you sold your stock at less than $91.86.
• C)You would lose money only if you purchased additional stock at greater than $91.86.
• D)You would gain money only if you purchased additional stock at greater than $91.86.
• E)You would not lose nor gain money regardless of the average cost of the stock.

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Definitions:

Cartel

A group of firms that gets together and makes joint price and output decisions to maximize joint profits.

Indeterminate

This term signifies a situation or outcome that cannot be precisely determined or established, often because of incomplete information.

Identical Cost Structures

Situations where businesses or projects have the same types and amounts of costs.

Profit-maximizing Output

The level of production at which a company achieves the highest possible profit, where marginal revenue equals marginal cost.