Asked by Kayla Evelyn on Jul 02, 2024
The prudent investor rule requires ________.
A) executives of companies to avoid investing in options of companies they work for
B) executives of companies to disclose their transactions in stocks of companies they work for
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 be approved by a prudent investor
Prudent Investor Rule
The prudent investor rule is a legal guideline advising trustees to manage others' funds by diversifying investments and taking a reasonable level of risk, as a prudent investor would.
Risky Investments
Investments that carry a high degree of risk of losing the principal amount invested, often associated with higher potential returns.
- Acknowledge the ethical standards and regulatory directives that steer investment practices and their significance for portfolio oversight.
Learning Objectives
- Acknowledge the ethical standards and regulatory directives that steer investment practices and their significance for portfolio oversight.