Question

Pursuant to the Uniform Prudent Investor Law, a bank trust department which utilizes a quality outside investment service in managing discretionary accounts:

a. has no further responsibility regarding investment analysis.
b. must review and approve all actions of the outside adviser, unless specifically waived by the Board of Directors.
c. can delegate its investment authority to the outside service provider.
d. can relieve itself of investment discretion, as defined by Regulation 9, in such situations.

Answer 1

According to the Uniform Prudent Investor Law, a bank trust department can delegate its investment authority to an outside investment service provider while still having the responsibility to review and approve the adviser's actions. Option C

Step-by-step explanation:

According to the Uniform Prudent Investor Law, a bank trust department that uses an outside investment service to manage discretionary accounts can delegate its investment authority to the outside service provider. This means that the bank trust department can rely on the investment service to make investment decisions on their behalf.

However, the bank trust department still has a responsibility to review and approve all actions of the outside adviser, unless specifically waived by the Board of Directors. This ensures that the bank trust department maintains oversight and control over the investment activities.

Therefore, option c is the correct answer: the bank trust department can delegate its investment authority to the outside service provider while still having some level of responsibility in reviewing and approving the adviser's actions. Option C