A more thorough explanation:

Definition: Legal investments refer to a group of investments that institutions and fiduciaries, such as banks and insurance companies, are allowed to invest in according to state laws. These investments are usually low-risk securities that meet certain specifications.

Example: The legal list in California includes government bonds, municipal bonds, and certain types of corporate bonds. These investments are considered safe and reliable, making them suitable for institutions and fiduciaries to invest in.

Explanation: The example illustrates how legal investments are restricted to low-risk securities that meet certain specifications. In this case, the legal list in California only includes government, municipal, and certain types of corporate bonds. These investments are considered safe and reliable, making them suitable for institutions and fiduciaries to invest in without risking their clients' money.