CFA Institute ESG-Investing Exam Practice Test Instant Access

Question 1

Which of the following investor types most likely have the shortest investment time horizon?

ALife insurers

BFoundations

CGeneral insurers

Answer : C

Question 2

When considering material ESG factors in real estate, which of the following is classified as an environmental factor?

ALocal job creation

BCommunity engagement

CUse of renewable energy

Answer : C

Question 3

Which of the following actions seeks to avoid exploitation of minority shareholders?

AIssuing dual-class shares

BGranting pre-emption rights

CPromoting 'general mandate' resolutions

Answer : B

Question 4

According to the Sustainability Accounting Standards Board (SASB), GHG emission is material for more than 50% of the industries in which sector?

AHealth care

BTechnology and communications

CExtractives and minerals processing

Answer : C

Question 5

Which of the following is most likely an example of a negative externality?

AImpairment costs incurred by a company due to regulatory changes

BDirect costs incurred by a company in reducing environmental damages

CIndirect costs incurred by third parties due to environmental damages caused by a company

Answer : C

Question 6

Which of the following would most likely be the initial step when drafting a client's investment mandate?

AClarifying the client's ESG investment beliefs

BDefining how ESG performance will be measured

CReflecting the client's investment beliefs operationally in the fund manager's investment approach

Answer : A

Question 7

A portfolio manager may need to adopt a more appropriate ESG benchmark rather than a broad market benchmark if the degree of exclusions results in:

Alow active share and low tracking error

Blow active share and high tracking error.

Chigh active share and high tracking error.

Answer : C

CFA Institute ESG-Investing Certificate in ESG Investing Exam Practice Test