Which One of the Following Statements Is Correct Concerning Dollar-Cost

question 14

Multiple Choice

Which one of the following statements is correct concerning dollar-cost averaging plans?

• A) The goal of dollar-cost averaging is current dividend income.
• B) Dollar-cost averaging is an active trading strategy.
• C) Dollar-cost averaging is a short- term trading strategy.
• D) The goal of dollar-cost averaging is long- term capital appreciation.

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Definitions:

Times Interest Earned

A financial ratio that measures a company’s ability to meet its interest payments based on its earnings before interest and taxes.

Interest Expense

The cost incurred by an entity for borrowing funds over a period of time, often expressed as an annual percentage of the principal.

Income Before Taxes and Interest

Net earnings of a company before accounting for interest and tax expenses, used to analyze operating performance without financing or tax influences.

Accounts Receivable Turnover

A financial ratio that measures how many times a company can turn its accounts receivable into cash within a specific period.