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.

Question

Quizplus · Accepted Answer

Dollar cost averaging involves regularly investing a fixed amount of money over a long period, regardless of the market's condition, aiming for long-term capital appreciation. It is not focused on active or short-term trading, nor primarily on earning current dividend income.

Which One of the Following Statements Is Correct Concerning Dollar