📚 General Knowledge

In investing, what does 'dollar-cost averaging' primarily refer to?

A Investing a large lump sum when the market is at its lowest point.
B Selling off investments quickly when the market is volatile.
C Investing a fixed amount of money at regular intervals, regardless of the asset's price.
D Only investing in assets that have a historical average return above 10%.

✓ Correct Answer: Option C

Dollar-cost averaging is an investment strategy in which an investor divides the total amount to be invested across periodic purchases of a target asset (e.g., stocks or mutual funds) to reduce the impact of volatility. It aims to reduce the average cost per share over time.

💡 Why is C) the correct answer?

The correct answer to the question "In investing, what does 'dollar-cost averaging' primarily refer to?" is Option C: Investing a fixed amount of money at regular intervals, regardless of the asset's price..

The other options — A) Investing a large lump sum when the market is at its lowest point., B) Selling off investments quickly when the market is volatile., D) Only investing in assets that have a historical average return above 10%. — are incorrect for this General Knowledge question. As explained above: Dollar-cost averaging is an investment strategy in which an investor divides the total amount to be invested across periodic purchases of a target asset (e.g., stocks or mutual funds) to reduce the i…

📚 About This General Knowledge Practice Question

This 3-level General Knowledge question from the Abbreviations & Full Forms topic is part of One Paper Preparation's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free General Knowledge practice test or use flashcards for spaced repetition review.

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