Question

1. Over the six months what was the average market price per share?

2. Over the 6 months what was the average cost per share that Maria paid?
3. Did the dollar cost averaging work in Marias favor or would she have been better off buying all the shares in June?

Answer 1

a) The average market price is (12 + 8 + 10 + 13 + 14 + 8) / 6 = $10.83

b) The total amount spent was: 12*8 + 8*12 + 10*10 + 13*7 + 14*7 + 8*12 = $577. The total number of shares was: 8 + 12 + 10 + 7 + 7 + 12 = 56. Therefore the average price per share was $577 / 56 shares = $10.30/share.
c) Since the cost per share in June was $12, and her average cost was $10.30, dollar-cost averaging worked in her favor since her average cost was lower.