Prudent-Man Rule

Legal Investment
Legal investment refers to safe and permissible investment options for investors who have fiduciary responsibilities to their clients or beneficiaries. These investments must meet specific legal standards, ensuring the safety and reliability of the investments.
Legal List
A list of high-quality securities approved by a state agency for permissible holdings by fiduciary institutions.
Prudent-Man Rule
The Prudent-Man Rule is a legal standard adopted by some U.S. states to guide fiduciaries in making investment decisions, emphasizing discretion and intelligence in seeking reasonable income, preserving capital, and avoiding speculative investments.
Reasonable Man / Reasonable Person
A hypothetical individual in society who exhibits prudent attention, knowledge, intelligence, and judgment for the protection of their own interests and the interests of others.

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.