Mary is given a graduation gift of $600 in June. She decides, since she is...
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Accounting
Mary is given a graduation gift of $600 in June. She decides, since she is still living at home, she can afford to invest the money to get a greater return than she could get if she put it in a bank account. She chooses several companies that she's been watching on the stock market, and chooses one to invest in. She decides not to buy all the shares now, but instead to purchase $100 worth of stock every month, use the dollar-coat average strategy.
After 6 months Mary wants to know whether she made the right decision in spreading out the purchases, or whether she would have been better off buying all the shares in June. Look at the table of her stock purchase, and answer the following question
investment
amount
cost
per share
No. of
share
June
$100
$12
8
July
$100
$8
12
August
$100
$10
10
September
$100
$13
7
Octorber
$100
$14
7
November
$100
$8
12
a- Over the 6 months what was the averge market price per share?
b- Ovedr the 6 months what was the average cost per share that Mary paid?
c- Dod dollar-cost averaging work in Mary's favor, or would she have been better off buying all the shares in June?
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