CFA Institute Sustainable-Investing Exam Questions - Real Practice Questions for Guaranteed Success

Question 1

A challenge to ESG integration at the asset allocation level when using mean-variance optimization is that it:

Ais highly sensitive to baseline assumptions

Brequires specialist knowledge to make informed judgments about future risk

Ccould introduce an additional source of estimation errors due to the need for dynamic rebalancing

Correct : A

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Ais highly sensitive to baseline assumptions

Brequires specialist knowledge to make informed judgments about future risk

Ccould introduce an additional source of estimation errors due to the need for dynamic rebalancing

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Question 2

When screening individual companies, a practice of avoiding the worst ESG performers best defines:

Apositive screening

Bnegative screening

Cnorms-based screening

Correct : B

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Apositive screening

Bnegative screening

Cnorms-based screening

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Question 3

An ESG contingent asset for a health care company may result from:

Aacting as custodians of its customers' medical details.

Bemployee recruiting strategies that trail best practices.

Cits data analytics business allowing the company to create cheaper health care options for governments.

Correct : C

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Aacting as custodians of its customers' medical details.

Bemployee recruiting strategies that trail best practices.

Cits data analytics business allowing the company to create cheaper health care options for governments.

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Question 4

Working conditions on a tree plantation are most likely an example of a(n):

Asocial issue

Bgovernance issue

Cenvironmental issue

Correct : A

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Asocial issue

Bgovernance issue

Cenvironmental issue

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Question 5

In ESG ratings, there is a size bias in favor of:

ASmall companies

BMid-sized companies

CLarge companies

Correct : C

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ASmall companies

BMid-sized companies

CLarge companies

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Master CFA Institute Sustainable-Investing Exam with Reliable Practice Questions

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