XAT 2011 Question 24

Question 24

Read the following sentences and choose the option that best arranges them in a logical order.
1. In law a fiduciary individual is someone who is entrusted with the power to act on behalf of and for the benefit of another.
2. Following the weight of corporate law and legal precedent, the director primacy model positions directors as autonomous fiduciaries, not agents.
3. The term fiduciary derives from the Latin fiducia, or trust, and the fiduciary is expected to act in good faith and honesty for the beneficiary’s interests.
4. A person who accepts the role of fiduciary in law must single - mindedly pursue the interests of his or her beneficiary, in this case the corporation, even when the latter cannot monitor or control the fiduciary’s behaviour.

Solution

Statement 3 is the opening sentence as it introduces the word 'fiduciary'. Statement 1 explains about fiduciary individual. Statement 4 is in continuance with the idea stated in statement 1. Statement 2 is about the relevance of fiduciaries in director primacy model. Thus, the correct order is 3 - 1 - 4 - 2.
Hence, 3142 is the correct answer.



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