CFA ESG Exam Questions with Complete Correct Answers | Grade A+
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Module
CFA
Institution
CFA (CFA)
Which of the following investment approaches is most likely to be at risk of short-termism?
A.) ESG Investing
B.) Impact Investing
C. Conventional Investing
Ans: Conventional Investing
Which of the following types of responsible investments is focused on the bottom of the
pyramid (BOP)?
A.)...
CFA ESG Exam Questions with
Complete Correct Answers | Grade
A+
Which of the following investment approaches is most likely to be at risk of short-termism?
A.) ESG Investing
B.) Impact Investing
C. Conventional Investing
Ans: Conventional Investing
Which of the following types of responsible investments is focused on the bottom of the
pyramid (BOP)?
A.) Green bonds
B.) Microfinance bonds
C.) Funds investing in smart grid technology
Ans: Microfinance bonds
According to the Stockholm Resilience Centre, the two core boundaries of the nine planetary
boundaries are:
,A.) Biosphere integrity and climate change
B.) Climate change and land-system change
C.) Biosphere integrity and land system change
Ans: biosphere integrity and climate change
ESG integration can have a material financial impact on a company leading to:
A.) Reduced risk of fines
B.) Increased negative externalities
C.) Increased risk of state intervention
Ans: Reduced risk of fines
Which of the following statements regarding externalities is most accurate?
A.) Externalities occur due to environmental or social factors.
B.) When externalities are positive, private costs are lower than societal costs.
C.) Internalization of externalities improves companies' financial performance
Ans: Externalities occur due to environmental or social factors
In addition to the payment of dues and reporting annually on their responsible investment
practices, which of the following is a minimum requirement for signatories to the Principles
of Responsible Investment (PRI)? Members must:
,A.) be active owners in the companies in which they are invested
B.) seek appropriate disclosure on ESG issues by the investee companies.
C.) have senior-level commitment for responsible investment implementation.
Ans: have senior level commitment for responsible investment implementation
Which of the following organizations developed the Model Mandate Initiative?
A.) Principles for Responsible Investment (PRI)
B.) International Corporate Governance Network (IGN)
C.) University of Cambridge Institute for Sustainability Leadership
Ans: IGN
Which of the following statements is most accurate? The majority of studies suggest that:
A.) a company with high ESG standards increases its cost of capital.
B.) ESG performance and investment fund performance are positively correlated
C.) ESG performance and corporate financial performance are positively
correlated.
Ans: ESG performance and corporate financial performance are positively correlated
Greenwashing most likely refers to:
A.) countries exporting hazardous waste to other countries.
, B.) companies making misleading claims about their environmental practices.
C.) companies introducing substances into the environment that are harmful.
Ans: Companies making misleading claims about their environmental practices
The standard for the UN Global Compact is overseen by the:
A.) Global Reporting Initiative (GRI).
B.) Value Reporting Foundation (VRF).
C.) International Business Council (IBC).
Ans: GRI
Which of the following requires investors to act with a more long-term focus?
A.) Stockholm Resilience Centre
B.) Financial Stability Board (FSB).
C.) UN Shareholder Rights Directive (SRD)
Ans: UN Shareholder Rights Directive (SRD)
Which of the following types of responsible investing is not related to portfolio construction.
A.) Thematic investing
B.) Shareholder engagement
C.) Socially responsible investing (SRI)
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