Which principle does the Trustee follow when managing funds or property?

The correct principle that trustees follow when managing funds or property is known as the Prudent Man's Rule. This rule stipulates that a trustee must act with the care, skill, and caution that a prudent person would exercise in managing their own property. It emphasizes the need for a prudent and careful investment approach, focusing on what is in the best interest of the beneficiaries while considering the overall investment strategy and risk tolerance.

Adopting this rule ensures that trustees do not take undue risks with the assets under their management. Instead, they are guided to make informed and thoughtful investment decisions, ensuring the preservation and growth of the trust assets over time. This aligns with the fiduciary responsibility that trustees have to their clients, prioritizing their interests above all else.

The other options reflect approaches that do not align with the fiduciary responsibilities inherent in trust management. For example, investing solely in high-risk stocks can lead to unnecessary losses and does not conform to the duty of care required under the Prudent Man's Rule. Similarly, while guidance by average market returns may inform decisions, it does not encompass the comprehensive and prudent evaluation required in trust management. Lastly, guaranteeing returns for clients is not a feasible responsibility within the realm of investment management, as investments inherently carry risks