SIE practice questionhardFiduciary Duty - Unauthorized Transactions
A fiduciary for a trust account executes speculative trades without the knowledge or consent of the beneficiaries. This action is:
- AA standard discretionary practice
- BA breach of fiduciary duty and prohibited✓ Correct answer
- CPermitted if profitable
- DEncouraged for portfolio growth
Explanation
Why B — A breach of fiduciary duty and prohibited
Trust fiduciaries must act in the beneficiaries’ best interests and within their authority. Unauthorized speculative trading violates these duties, regardless of outcome.
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