Which of the following describes the 'Standard of Care' expected of a mutual fund representative?

Question: Which of the following describes the 'Standard of Care' expected of a mutual fund representative?

Answer options:

• To guarantee the client's investment returns.
• To provide the minimum level of service required by basic contract law. ✅ To act with the competence, diligence, and ethics that a reasonable and prudent person would exercise.
• To prioritize the profitability of the dealer over client interests.

Correct answer: To act with the competence, diligence, and ethics that a reasonable and prudent person would exercise.

Explanation: The 'Standard of Care' dictates that financial professionals, including mutual fund representatives, must act with the degree of skill, care, and diligence that a reasonably prudent person would exercise in comparable circumstances. This includes fulfilling suitability obligations and upholding ethical principles.