Prudent Man and Investor!

I read soft dollars today. Haven’t read PMR vs PIR yet in the texts and have been suffering a bit on qbank because of it. That’ll be my evening read. Here are 2: Which of the following fiduciary standards is carried over from the old Prudent Man Rule to the new Prudent Investor Rule? A) Loyalty. B) Partiality. C) Timeliness. D) Professionalism. When investing and managing trust assets in accordance with the new Prudent Investor Rule, a trust manager should most likely consider which of the following key factors? A) The beneficiary’s knowledge of financial concepts. B) The trust’s performance relative to the benchmark. C) The effects of inflation and deflation. D) Any potential conflicts of interest with regards to the trustee’s other clients.

A C or D… i’ll go with C.

d d don’t really have a clue

A = loyalty B

B and B? Not sure though.

A? C?

I’m in the same boat… Actually just picked up Ethics to see reading through it might get me another couple of points. So, here goes nothin - D & C

I go with B for 2nd Q bcoz it speaks abt total return (relative to the benchmark).

Those are good questions because I thought I had a good handle of this material, but I don’t have a clue with respect to these questions. D B

dinesh is alive!

a c

A C?

:-(( cleaning apartment, so will not be available on AF. But might get back to books tonight. One thing is for sure: I am going to flunk this like nobody before, never attempted before by anybody.


yup even i go with 1. A ( i dont think professionalism was part of the old prudent man rule, so i guess i should be loyalty) 2. C

dinesh- did you go and read all of ethics without me bud? i need to catch up! i’ve been trying to put more time in on ethics. i mean, it counts as much as quant or econ, why not spend as much time on it as quant, right? i read up on most of the basic stuff, got through soft dollars this afternoon, need to read PMR/PIR next and get this stuff down cold. Your answer: D was incorrect. The correct answer was A) Loyalty. Loyalty is the only term listed that is included. Loyalty means the absence of conflicts of interest and acting in the best interest of beneficiaries. Your answer: B was incorrect. The correct answer was C) The effects of inflation and deflation. A trust manager should consider the effects of anticipated inflation or deflation on the overall performance of the portfolio and make investment decisions accordingly.

Sweet, looks like I don’t need to study the next two weeks :slight_smile:

I’m getting worked over today.

Banni - I just read 40 pages of Soft Dollar from CFAI + 2/3 pages of prudent man rule and my head WENT SPINNING… I really had to go to bed after reading all that junk. It’s not difficult, rather it looks like easy points. But there was too much data to retain than the brain cell had the space left with. I still have to do the PIR and PMR … but decided the leave the complete L1 (code of ethics and stnadard of professional conduct) stuff for the last day.

Nib, we all have those days. i just have them a lot more than you do! hang in there, bud. you’re better prepared than most.