Investment is made for the same amount at regular intervals.
B
Over a period, the average purchase price may be higher than if an investor successfully times market highs and lows.
C
It does not inform an investor when to buy, sell, or switch from one scheme to another.
D
Rupee-cost averaging has no significant shortcomings.
Correct Option:
C
Explanation
Rupee-cost averaging, typically achieved through SIPs, helps reduce the impact of market volatility by investing a fixed amount at regular intervals. However, one of its limitations is that it does not provide guidance on when to buy, sell, or switch between mutual fund schemes.
