What final authority determines permitted investments in a trust indenture?

The trust indenture serves as the foundational document that outlines the terms and conditions under which the trust operates, including the types of investments that are permitted. It is a legally binding agreement between the issuer of the bonds and the bondholders, providing detailed instructions on how the trust's assets are to be managed. This document specifies the investment strategy, risk tolerance, and guidelines that the trustee must adhere to when managing the trust's portfolio. Therefore, the final authority regarding permitted investments lies within the provisions set forth in the trust indenture itself, ensuring that all actions taken by the trustee comply with the outlined stipulations to protect the interests of the beneficiaries.

Understanding this relationship helps reinforce the importance of legal documents in investment management and fiduciary duties, making the trust indenture the key reference point for permissible investment choices within a trust structure.