Floyd is the trustee for Y, a charitable organization whose mission is to provide funding to construct affordable housing in economically disadvantaged neighborhoods across the U.S. In accordance with the new Prudent Investor Rule, a key factor that Xshould consider when making investment decisions for the portfolio is: A) minimizing the Y’s annual tax liabilities on both a state and a federal level. B) avoiding strategies that interfere with legal list statutes, or fail to preserve the purchasing power of Y’s assets. C) to eliminate Y’s assets’ exposure to investment risk through appropriate investment decisions. D) Y’s irregular needs for liquidity when undertaking construction projects.



I would go with D also.

D for me T/G

another one for d.

Ditto on D.


i’m on the D-train here too

i am gonna risk B

My guess . . . you picked A.

I’ll go for B For D: The question is totally silent on irregular needs. This is our perception but not mentioned in the question.


I don’t like B because of “fail to preserve the purchasing power of Y’s assets.” That sounds like PMR. I would agree with the majority about D.

Nib, This is charitable org, which is more conservative in the investment strategy…so I guess PM should preserve the investment (principal amt in tune to the inflation)

Legal lists were around before the first prudent man rule also.

I like B

Given that the question specifically mentions the New Prudent Investor Rule I lean towards C… Prudent Man: the trustee is responsible for all investment decisions and each investment is judged in isolation as to it’s suitableness vis a vis risk: ie Options are risky…Not permitted New Prudent Investor: trustee can now delegate investment decisions and all investment risks are judged in the context of the portfolio, diversification is “king”: ie Options are risky BUT Portfolio Insurance is a conservative measure that protects on the downside…permitted

I’ll go D too

There answer is D which makes sense. The other choices just don’t scream out to me as wrong.