Scenario 24: Which term best describes the process of regularly investing a fixed amount of money at regular intervals, regardless of market fluctuations?

Question: Scenario 24: Which term best describes the process of regularly investing a fixed amount of money at regular intervals, regardless of market fluctuations?

Answer options:

• Market timing. ✅ Dollar-cost averaging.
• Strategic asset allocation.
• Portfolio rebalancing.

Correct answer: Dollar-cost averaging.

Explanation: Dollar-cost averaging involves investing a fixed sum of money at regular intervals, which leads to buying more units when prices are low and fewer units when prices are high, potentially reducing the average cost per unit over time. This strategy helps mitigate the risk of market timing. The correct answer is "Dollar-cost averaging.". This capacity-fill scenario 24 reinforces the same competency for the ific bank and follows the certified explanation standard.