Dollar Cost Averaging Is a Procedure by Which an Investor

question 27

Multiple Choice

Dollar cost averaging is a procedure by which an investor

• A) buys more stock as its price increases.
• B) times investments in order to buy low and sell high.
• C) invests a fixed dollar amount in a security at fixed intervals.
• D) maintains a constant ratio of conservative and aggressive investments.

---

Definitions:

Measurement Principle

A fundamental accounting principle that dictates how transactions should be recorded based on their actual cost in financial statements.

Fair Value

The estimated market price of an asset or liability, reflecting the amount at which it could be bought or sold in a current transaction between willing parties.

Relevant Information

Relevant information comprises data that is applicable and helpful in making decisions, particularly in the context of financial and managerial accounting.