Dollar-cost averaging involves:

A Investing a lump sum immediately

B Investing a fixed amount at regular intervals regardless of market conditions

C Timing the market

D Only buying at lows

✓ Correct Answer: Option B

DCA invests consistently over time, buying more shares when prices are low and fewer when high.

💡 Why is B) the correct answer?

The correct answer to the question "Dollar-cost averaging involves:" is Option B: Investing a fixed amount at regular intervals regardless of market conditions.

The other options — A) Investing a lump sum immediately, C) Timing the market, D) Only buying at lows — are incorrect for this CFA Exam Prep question. As explained above: DCA invests consistently over time, buying more shares when prices are low and fewer when high.

📚 About This CFA Exam Prep Practice Question

This 1-level CFA Exam Prep question from the Portfolio Management topic is part of BrainForge Quiz'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 CFA Exam Prep practice test or use flashcards for spaced repetition review.

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Dollar-cost averaging involves:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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