According to fiduciary standards, bank trust departments are allowed to purchase what types of investments?

The most appropriate answer is that fiduciary standards allow bank trust departments to purchase marketable securities. Fiduciaries have a responsibility to act in the best interests of their clients, and this primarily includes following prudent investment practices. Marketable securities, such as stocks and bonds, are generally viewed as liquid and easily tradable, making them suitable for trust investment strategies. They provide an opportunity for diversification, capital appreciation, and income generation, while aligning with the obligations a fiduciary has to balance risk and return for beneficiaries.

Private equity investments and real estate properties, while they may also be permissible under certain circumstances, are typically subject to more rigorous scrutiny and may not fit within the traditional fiduciary framework due to their illiquid nature and higher risk profiles. They require careful consideration of the investment strategy and a clear alignment with the beneficiaries' best interests, which fiduciaries must prioritize. Hence, while fiduciaries can invest in various asset classes, the key focus tends to remain on more conventional, liquid investments like marketable securities.