What does DRIP stand for?

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Prepare for the Finance and Investment Challenge Test. Study with flashcards and multiple-choice questions, complete with hints and explanations. Boost your finance understanding and investment skills for your assessment!

Multiple Choice

What does DRIP stand for?

Explanation:
Dividend Reinvestment Plan means you don’t take cash dividends as income; those dividends are automatically reinvested to buy more shares of the same stock, often including fractional shares and with little or no additional fees. This automatic reinvestment accelerates compounding wealth over time and simplifies investing by removing the need to place separate reinvestment trades. The other phrases aren’t standard terms in finance, so they don’t describe what this acronym stands for.

Dividend Reinvestment Plan means you don’t take cash dividends as income; those dividends are automatically reinvested to buy more shares of the same stock, often including fractional shares and with little or no additional fees. This automatic reinvestment accelerates compounding wealth over time and simplifies investing by removing the need to place separate reinvestment trades. The other phrases aren’t standard terms in finance, so they don’t describe what this acronym stands for.

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