SIE practice questionhardFiduciary Duty
A trustee for a pension plan invests in speculative stocks hoping to boost returns. The plan later suffers large losses. What rule has most likely been violated?
- AFINRA suitability rule
- BRegulation T
- CFiduciary duty to act prudently✓ Correct answer
- DMargin maintenance requirements
Explanation
Why C — Fiduciary duty to act prudently
Trustees must act prudently and avoid imprudent speculation. Regulation T concerns margin, suitability applies to brokers, and margin maintenance is unrelated to prudent investment.
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