Kai Establishes a Trust, Naming Loo as the Trustee and Giving

question 41

Multiple Choice

Kai establishes a trust, naming Loo as the trustee and giving him discretionary investment power. A state statute confines trustees to investments in conservative debt securities. In investing the trust assets, Loo does not follow the statute, but generally exercises the degree of care that a prudent person would exercise in his personal affairs. In this situation, Loo is liable for

• A)not complying with the purposes of the trust.
• B)none of the choices
• C)failing to follow the statute.
• D)exercising the same degree of the care as he would in his own affairs.

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Definitions:

Incremental Theorists

Individuals who believe that abilities and intelligence can grow and improve over time with effort and practice.

Status Quo Bias

The preference to maintain current circumstances or resist changes.

Changing

Refers to the process of making something different from what it was before.

Immediate Outcomes

The direct results or effects that occur as a consequence of an action or event.