The prudent investor rule requires
A) executives of companies to avoid investing in options of companies by which they are employed.
B) executives of companies to disclose their transactions in stocks of companies by which they are employed.
C) professional investors who manage money for others to avoid all risky investments.
D) professional investors who manage money for others to constrain their investments to those that would have been approved by the prudent investor.

Question

Quizplus · Accepted Answer

The prudent investor rule is a guideline for fiduciaries that dictates that investments must be made with the care, skill, prudence, and diligence that a prudent person acting in a like capacity and familiar with such matters would use. It does not require the avoidance of all risky investments but rather that the investments be made judiciously and with consideration of the interests of the beneficiaries.

The Prudent Investor Rule Requires