SIE practice questionmediumAccount Types – Custodial Account Features
A custodian managing securities for a minor must follow which investment standard?
- ABeneficiary-directed rule
- BMaximum risk rule
- CPrudent person rule✓ Correct answer
- DNo rule applies
Explanation
Why C — Prudent person rule
Custodians are held to the prudent person rule, requiring them to invest as a careful, responsible person would. Maximum risk or beneficiary-directed approaches are not permitted.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Account Types questions
- A power of attorney for a brokerage account automatically terminates under which circumstance?
- Who is eligible to contribute to a traditional IRA?
- When a gift is made to a minor’s custodial account, what is the status of that gift?
- Which statement best describes a joint tenants in common (JTIC) account?