A formula timing plan which consists of periodic purchases of a fixed dollar amount of an investment company regardless of price is known as:

By Investopedia AAA
A:

a. Dollar cost averaging

b.
Share averaging


c. Constant dollar plan

d. Constant ratio plan



Answer: A

"A" is correct because this is the definition of dollar cost averaging.



RELATED FAQS

  1. What is the difference between arbitrage and speculation?

    Arbitrage and speculation are very different strategies. Arbitrage involves the simultaneous buying and selling of an asset ...
  2. What is the difference between positive and normative economics?

    Positive economics is objective and fact based, while normative economics is subjective and value based. Positive economic ...
  3. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ...
  4. How does a company switch from one stock exchange to another?

    A publicly traded company can, in fact, switch to a stock exchange that it believes will be favorable to its financing efforts. ...
RELATED TERMS
  1. Policyholder Surplus

    The assets of a mutual insurance company minus its liabilities. ...
  2. Net Premium

    The expected present value of a policy’s benefits less the expected ...
  3. Quick Liquidity Ratio

    The total amount of a company’s quick assets divided by the sum ...
  4. Subprime Meltdown

    The sharp increase in high-risk mortgages that went into default ...
  5. Event Risk

    1. The risk due to unforeseen events partaken by or associated ...
  6. Sharpe Ratio

    A ratio developed by Nobel laureate William F. Sharpe to measure ...
comments powered by Disqus
Related Articles
  1. Using Normal Distribution Formula To ...
    Investing Basics

    Using Normal Distribution Formula To ...

  2. The Government And Risk: A Love-Hate ...
    Insurance

    The Government And Risk: A Love-Hate ...

  3. Can Good News Be A Signal To Sell?
    Fundamental Analysis

    Can Good News Be A Signal To Sell?

  4. Beware Of Wall Street's Three Big Lies
    Fundamental Analysis

    Beware Of Wall Street's Three Big Lies

  5. How To Become A Corporate Board Member ...
    Personal Finance

    How To Become A Corporate Board Member ...

Trading Center