Determine the average price of the stock

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Question -

(a) Discuss the principle of dollar cost averaging.

(b) Peter decides to invest $1,000 into purchasing some shares every month for the next 6 months. The share acquisition price for each of the months is as follows:

1st Month share acquisition price: $1.00

2nd Month share acquisition price: $2.00

3rd Month share acquisition price: $1.00

4th Month share acquisition price: $4.00

5th Month share acquisition price: $3.50

6th Month share acquisition price: $2.50

Required - Determine the average price of the stock and the number that he would own at the end of the period. What difference would it have made if he had purchased $6,000 worth of shares at the end of the 6 months?

Reference no: EM133020935

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