1. Which of the following statements regarding the old Prudent Man Rule is most accurate?

A. The delegation of investment authority to a third party was acceptable.

B. Trustees were to consider the safety of invested assets as well as income potential.

C. Each investment was considered in the context of its contribution to the entire portfolio.

2. An investment management firm, Investco, Inc., was recently examined by the U.S. SEC. Investco included the following statement in its performance presentation report: “This report has been verified as GIPS compliant by Investco’s Compliance Department and the US SEC.” Does this constitute acceptable verification under GIPS?

A. No, only one party may perform GIPS verification.

B. No, neither party involved in the review of Investco, Inc. constitutes an acceptable GIPS verification.

C. Yes, because a review was performed implicitly by the SEC and explicitly by the firm’s internal audit team.