Final answer:
Permitted investments are usually determined by the trust indenture, which is the legal document outlining bond specifics including investment guidelines. This document acts as the final authority over directions from the obligor or bond counsel. Hence, option (b) is correct.
Step-by-step explanation:
Permitted investments are typically defined by the trust indenture, which acts as the final authority. The trust indenture is a legal agreement outlining the specifics of the bond, including investment guidelines that must be adhered to by the trustee.
While the Prudent Person rule provides a standard for investment decisions based on what a reasonable and prudent person would do, the trust indenture has specific provisions for investments. Directions from the obligor or bond counsel might influence investment decisions, but they do not have the final say unless specified within the trust indenture. Therefore, option b. is the correct answer.