Reference no: EM133054478

True or False
Under the Prudent Investor Rule, a trustee or investment manager may NOT take certain risks in the management of the assets as this may be detrimental to the future assets and security of the beneficiary.
Bond prices are inversely related to interest rate movements. If interest rates go up, bond prices go down (therefore a fixed income UITF will decrease in value) and vice versa.
A type of trust wherein the funds are set aside in a trust designed to motivate the beneficiary into accomplishing something is called "accomplishment trust."
Under this Investment Management Agreement (IMA), an agency arrangement, the Trust Group or Trust corporation essentially acts as the clients' Investment Manager authorized to manage his funds according to his objectives, strategies, risk parameters and other guidelines he wishes to set. If the principal dies, the assets under the IMA forms part of his estate.
A client opened a directional IMA with JFINEX Trust for his retirement. MC, a trust officer, informed the operations team that the generation of financial reports may be delegated to third parties.
Mr. JFINEX, a trust marketing officer, conducted a seminar about trust and agency to his clients. He mentioned that in IMA, the legal title will not be transferred to a bank even if the account is opened as discretionary.
The conceptual barrier separating the Trust Entity (TE) from the other groups of the bank proper is called "Chinese wall".
A type of trust wherein the funds are set aside in a trust designed to motivate the beneficiary into accomplishing something is called "accomplishment trust."
One of the Investment Management Accounts of JFINEX Bank is 98% invested in various securities while the remainder is placed in time deposits with a local bank. The marketing personnel told her clients that trust products are not insured by PDIC except for the time deposit investments of up to 500,000 pesos only.
A type of trust wherein the trustor COMPELETELY and ABSOLUTELY RELINQUISHES HIS OWNERSHIP to the trust property is called an "irreplaceable trust."
Leni is a fund manager with JFINEX Trust Department, handling trusteed accounts. A new and aggressive client initially contributed 105,000 pesos in a PMT, where Leni invested the funds in various securities, including equities, treasury bills, and corporate bonds, to diversify. She told her boss that she is abiding by the applicable rules of PMT for all her accounts.
Under the Prudent Investor Rule, a trustee or investment manager may NOT take certain risks in the management of the assets as this maybe detrimental to the future assets and security of the beneficiary.