The Prudent Investor Rule Requires __________

question 11

Multiple Choice

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
• E)none of the above

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Definitions:

Stock Market Crashed

A rapid and significant decline in the stock market, leading to a substantial loss of wealth for investors.

Federal Deficits

The amount by which a government’s total budget outlays exceeds its total receipts for a fiscal year.

Social Security

A government program designed to provide financial support to individuals during retirement, disability, or upon death, ensuring a basic level of sustenance.

Medicare Trust Funds

Financial accounts from which the U.S. federal government disburses payments for Medicare, the health insurance program for the elderly and disabled.