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David had $10,000 in his investment account with Dynamic Investments, a mutual funds dealer.

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David had $10,000 in his investment account with Dynamic Investments, a mutual funds dealer. On June 28, David wants to buy 500 units in ABC Canadian Dividend Fund that has a Net Asset Value Per Unit (NAVPU) of $14.10. His friend Robert suggests that he may get a better price if he used the strategy of dollar-cost averaging. David then instructs his Dealing Representative to place a purchase order for 100 units on the first of every month starting July 1st for the next 5 months.

The orders are executed at the following NAVPUs.

July 01, $14.00

Aug. 01, $14.50

Sep. 01, $15.00

Oct. 01, $14.25

Nov. 01, $16.50

Did David get a better purchase price following the dollar-cost averaging strategy compared to making a lump-sum purchase of 500 shares on Jun 28, 20xx?

A.

David got his 500 units at the same price as the lump sum price he would have paid.

B.

David got his 500 units at a lower price than the lump sum price he would have paid.

C.

David realizes that Dollar cost averaging is the best strategy for getting lower prices.

D.

David got his 500 units at a higher price than the lump sum price he would have paid

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