What type of investments are considered legal for commercial banks under Special Care Trusts?

The correct choice, government bonds, is considered a legal investment for commercial banks under Special Care Trusts due to their stability and guaranteed return from the government. Government bonds, such as U.S. Treasury bonds, are backed by the full faith and credit of the government, making them a low-risk investment option. This reliability aligns with the fiduciary responsibilities of commercial banks to safeguard the interests of trust beneficiaries while ensuring that the funds are invested prudently.

Special Care Trusts often require a conservative approach to investment to protect the trust's assets, leading to a preference for government bonds. These bonds provide predictable income and are less likely to fluctuate in value compared to other types of investments. In contrast, real estate properties can involve significant risks and management issues, stock market shares are subject to volatility, and corporate bonds carry credit risks that may not align with the conservative investment strategies required for Special Care Trusts. Therefore, government bonds are deemed the most appropriate and legally accepted choice in this context.