Although investing all at once works best when stock prices are rising, dollar-cost averaging can be a good way to take advantage of a fluctuating market. Dollar-cost averaging is an investment...

Extracted text: Although investing all at once works best when stock prices are rising, dollar-cost averaging can be a good way to take advantage of a fluctuating market. Dollar-cost averaging is an investment strategy designed to reduce volatility in which securities are purchased in fixed dollar amounts at regular intervals regardless of what direction the market is moving. This strategy is also called the constant dollar plan. You are considering a hypothetical $1,200 investment in a media company's stock. Your choice is to invest the money all at once or dollar-cost average at the rate of $100 per month for one year. Assume that the company allows you to purchase "fractional" shares of its stock. (a) If you invested all of the money in January and bought the shares for $12 each, how many shares could you buy? 100 shares (b) From the following chart of share prices, calculate the number of shares that would be purchased each month using dollar- cost averaging and the total shares for the year. Round to the nearest tenth. Cost per Cost per Share Amount Shares Amount Shares Month Month Invested Purchased Invested Share Purchased January $100 $12.00 8.333 July $100 $13.40 7.462 February 100 11.65 8.583 August 100 12.60 7.936 March 100 10.70 9.345 September 100 11.90 8.403 April 100 9.75 10.256 October 100 12.50 8 May 100 11.25 8.888 November 100 11.35 8.8105 June 100 12.15 8.230 December 100 12.15 8.23 total shares = 100 (c) What is the average price you pay per share if you purchase them all in January? $ 12 (d) What is the average price you pay per share if you purchase them using dollar-cost averaging? (Round your answer to the nearest cent.)