AThe principle of acting as a prudent, careful investor
BThe principle of competitive market neutrality
CThe principle of equitable and fair taxation
DThe principle of solvency balance and neutrality
EThe principle of maintaining monetary and price stability
✓ Correct answer: A. The principle of acting as a prudent, careful investorTrustees must adhere to the prudent person principle, meaning they invest with the care, skill, and caution expected of a prudent person managing pension assets on behalf of others.
Why the other options are incorrect:
• The principle of competitive market neutrality: Competitive neutrality principles relate to the CMA's work, not to trustee investment obligations.
• The principle of equitable and fair taxation: Tax fairness concerns fall under HMRC's remit rather than guiding trustee investment decisions.
• The principle of solvency balance and neutrality: Solvency rules are directed at insurers and are not the applicable standard for pension trustees.
• The principle of maintaining monetary and price stability: Monetary and price stability is the responsibility of the Bank of England, not pension trustees.
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