What is the "prudent person principle?"
2006-09-30 09:32:00 · 3 answers · asked by tiaraj81 1 in Business & Finance ➔ Other - Business & Finance
What someone did is generally compared to what a reasonably prudent person would have done in that circumstance.
2006-09-30 09:39:32 · answer #1 · answered by Catspaw 6 · 0⤊ 0⤋
It's a financial term. As near as I can figure, it means that lending institutions don't even need to bother to check your credit to see if you are eligible for a loan if your appearence makes it obvious you are not.
For example, its not prudent to waste time looking up a homeless man's credit history when he comes in yelling and insisting on a million dollar loan.
The same would apply to anyone coming in and acting bizzare, or any "lower class" looking person trying to apply for any sort of large loan.
2006-09-30 09:39:51 · answer #2 · answered by Puzzled Dude 1 · 0⤊ 0⤋
My how PC we've become. This is the "Prudent Man Rule" that has been a long time standard for fiduciaries.
2006-09-30 10:13:47 · answer #3 · answered by SDD 7 · 0⤊ 0⤋