Prudent Investor vs. Prudent Man Rule

CFA Level III
#1

Schweser distinguishes between the two. Anyone know the difference?

#2

Prudent Man Rule. This is a old rule. Basically, it has a list of securities that a fiducrial can’t invest. What does it mean===> Hedge fund is never a choice for a widow fund. Prudent Investor Rule. With the introduction of Modern portfolio theory, selection of security has to be done on the context of entire portfolio. What does it mean====> Hedge fund can be a suitable choice for a widow fund. Hope this helps.

#3

One more difference: Old Rule: it’s not prudent to rely on expertise of others New Rule: it’s prudent to use exptertise of others

#4

maratikus Wrote: ------------------------------------------------------- > One more difference: > > Old Rule: it’s not prudent to rely on expertise of > others > > New Rule: it’s prudent to use exptertise of others Good addition!

#5

Prudent Woman

#6

When you get older, you will. Life gets boring that way.

#7

Boring? How about STRESSED! (with un-prudent partners)

#8

That’s the point - when you get older you want to date prudent women so you aren’t stressed about the next crazy thing they are going to do (Honey, I was walking done Greenwich Ave, saw this sign about a fur sale in Saks, and thought “what the heck”…)

#9

nt