(a) Preferred and common stock.--Preferred and common stock of any corporation organized under the laws of the United States or of any commonwealth or state thereof, or of the District of Columbia, shall be an authorized investment if purchased or retained in the exercise of that degree of judgment and care, under the circumstances then prevailing, which men of prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income to be derived therefrom as well as the probable safety of their capital.

“Corporation” as used in this subsection shall include an investment company (as hereinafter defined), a voluntary association, a joint-stock association or company, a business trust, a Massachusetts trust, a common-law trust, and any other organization organized and existing for any lawful purpose and which, like a corporation, continues to exist notwithstanding changes in the personnel of its members or participants, and conducts its affairs through a committee, a board, or some other group acting in a representative capacity.

“Investment company” as used in this subsection shall mean a corporation (as defined in this subsection) which is registered as an investment company under the Federal Investment Company Act of 1940,¹ as from time to time amended, and which has no preferred stock, bonds, loans or any other outstanding securities having preference or priority as to assets or earnings over its common stock and which shall have net assets of not less than $10,000,000 at the date of purchase.

“Common stock” as used in this subsection shall include the stock certificates, certificates of beneficial interests or trust participation certificates issued by any corporation or unincorporated association included under the definition of “corporation” in this subsection.

(b) Savings accounts insured by Federal savings and loan insurance corporation.--Savings accounts of any savings association incorporated under the laws of the Commonwealth, or of any Federal savings and loan association incorporated under the laws of the United States shall be an authorized investment if the withdrawal or repurchase value thereof is insured by the Federal savings and loan insurance corporation pursuant to the act of Congress of June 27, 1934 (48 Stat. 1255),² and its supplements and amendments heretofore or hereafter enacted.