Which One of the Following Statements Is Correct Concerning Dollar

question 99

Multiple Choice

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

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

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Definitions:

Compounded Monthly

Interest calculation method where the interest is added to the principal balance monthly, leading to compound growth.

Compounded Monthly

Interest on an investment or loan is calculated and compounded every month.

Maximize Benefits

The act of optimizing or getting the most advantageous results from a certain situation or set of resources.

Compounded Annually

Interest that is computed once per year and added to the account's total.