CFA Institute ESG-Investing Exam Practice Test Instant Access

Question 1

Which of the following is most likely a success factor characteristic of the engagement approach? Investors pursuing the engagement should have:

AMeaningful assets under management.

BA prior relationship with the target company.

CAn objective that is specific and targeted to enable clarity around delivery.

Answer : C

Question 2

Which element of EU Taxonomy for Sustainable Activities screening is most closely associated with social factors?

ADo no significant harm

BSubstantially contribute

CComply with minimum safeguards

Answer : C

Question 3

ESG factors impacting balance sheet strength rather than growth opportunities are most material to:

AEquity investors

BSovereign debt investors

CCorporate bond investors

Answer : C

Question 4

Which of the following is most likely an example of quantitative ESG analysis? Analyzing:

AIssuer-reported carbon emissions

BExecutive compensation policies linked to progress on ESG-related goals

CThe presence and credibility of investments, policies, and commitments to ESG-related goals

Answer : A

Question 5

Assessing the alignment of local labor laws with International Labour Organization (ILO) principles is an example of social analysis at the:

Asector level

Bcountry level.

Ccompany level

Answer : B

Question 6

A difficulty of integrating ESG into sovereign debt analysis is most likely the:

Ashrinking pool of sovereign investment research available

Blow correlation among credit ratings compared to ESG ratings

Csmaller number of issuers compared to corporate debt or equities

Answer : C

Question 7

A bond issued to fund projects that provide a clear benefit to the environment best describes a:

Agreen bond.

Btransition bond.

Csustainability-linked bond.

Answer : A

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