Question

In small trust institutions, must management and staff personnel specialize in areas of investment management, accounts administration, and operations?

a) TRUE
b) FALSE

Answer 1

Management and staff in small trust institutions likely cannot specialize in specific areas due to the need to perform multiple tasks; this is false. Proprietors in a proprietary colony had several responsibilities beyond collecting profits, which is also false. Similarly, the Panic of 1819 decreased American people's faith in the Second Bank, another false statement.

Step-by-step explanation:

In small trust institutions, management and staff personnel often have to assume multiple roles due to limited human resources, which means they might not be able to specialize exclusively in areas like investment management, accounts administration, and operations. Therefore, the statement is FALSE. With fewer employees, staff members may need to perform a variety of tasks that in larger organizations would be handled by specialists.

The claim that in a proprietary colony, the Proprietors have no responsibilities except to collect the profits is FALSE. Proprietors had several responsibilities including, but not limited to, governing the colony and ensuring its defense and good administration. This means they were also involved in legislative, judicial, and executive functions.

The Panic of 1819 did not increase the American people's faith in the Second Bank of the United States, making this statement FALSE. In fact, it led to widespread distrust of the national bank due to its tightening of credit in response to the crisis, which contributed to economic hardship.

Answer 2

Small trust institutions do not mandatorily require staff to specialize in investment management, account administration, and operations; however, such specialization can be advantageous for staff expertise and service quality. The correct option is b) FALSE; In small trust institutions

Step-by-step explanation:

FALSE; In small trust institutions, the requirement for all staff to specialize in areas like investment management, accounts administration, and operations is not obligatory, but beneficial. Management and staff personnel in small trust institutions do not necessarily have to specialize in specific areas such as investment management, accounts administration, and operations. However, specialization can contribute to a higher level of expertise and efficiency within these functional domains. Smaller institutions may have limited staff, which often means that employees fulfill multiple roles and responsibilities.

While larger firms can afford to have specialists in each department, smaller entities might require a more versatile staff capable of handling various tasks. The benefit of having specialized staff in investment and administration lies in their deep understanding and skills in those specific areas, which can potentially lead to better performance and client service. Yet, it is not a strict requirement, but rather a strategic choice dependent on the institution's size, resources, and business model.