What is dollar-cost averaging?

A Converting all foreign currency at once

B Investing a fixed amount at regular intervals regardless of price

C Only buying stocks when prices drop

D Spreading purchases across different currencies

✓ Correct Answer: Option B

Dollar-cost averaging involves investing a fixed amount regularly. When prices are low, you buy more shares; when high, fewer. This reduces the impact of volatility.

💡 Why is B) the correct answer?

The correct answer to the question "What is dollar-cost averaging?" is Option B: Investing a fixed amount at regular intervals regardless of price.

The other options — A) Converting all foreign currency at once, C) Only buying stocks when prices drop, D) Spreading purchases across different currencies — are incorrect for this General Knowledge question. As explained above: Dollar-cost averaging involves investing a fixed amount regularly. When prices are low, you buy more shares; when high, fewer. This reduces the impact of volatility.

📚 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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What is dollar-cost averaging?

✓ Correct Answer: Option B

📚 About This General Knowledge Practice Question

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