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Sustainable-Investing Practice Exam Questions and Answers

Sustainable Investing Certificate (CFA-SIC) Exam

Last Update 1 day ago
Total Questions : 802

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Question # 1

The role of auditors is to assess the financial reports prepared by management and to provide assurance that:

Options:

A.  

the numbers are correct

B.  

there is no fraud within the business.

C.  

the reports fairly represent the performance and position of the business

Discussion 0
Question # 2

Formal corporate governance codes are most likely to

Options:

A.  

be found in all major world markets

B.  

call for serious consequences for non-comphant organizations.

C.  

be interpreted by proxy advisory firms when corporate compliance is assessed

Discussion 0
Question # 3

According to the Sustainability Accounting Standards Board (SASB) materiality risk mapping, greenhouse gas emissions (GHG) are most material for the

Options:

A.  

financial sector

B.  

healthcare sector.

C.  

infrastructure sector

Discussion 0
Question # 4

The United Nations Sustainable Development Goals (SDGs) are particularly aimed at

Options:

A.  

investors

B.  

corporations.

C.  

governments

Discussion 0
Question # 5

Which of the following has the long-term goal to keep the increase in global average temperature to well below 2°C (3.6°F) above pre-industnal levels?

Options:

A.  

The Kyoto Protocol

B.  

The Paris Agreement

C.  

The UN Framework Convention on Climate Change

Discussion 0
Question # 6

Which of the following social factors most likely impacts a company's external stakeholders?

Options:

A.  

Working conditions, health, and safety

B.  

Employment standards and labor rights

C.  

Product liability and consumer protection

Discussion 0
Question # 7

When assessing credit and ESG ratings, which of the following statements is most accurate?

Options:

A.  

The correlation between country ESG risk and credit ratings is high

B.  

The correlation between ESG ratings among rating providers is high

C.  

The correlation between credit ratings among credit rating agencies (CRAs) is low

Discussion 0
Question # 8

When undertaking an ESG assessment of a private equity deal ESG screening and due diligence will most likely take place during:

Options:

A.  

exit

B.  

ownership

C.  

deal sourcing

Discussion 0
Question # 9

Which of the following is an example of a just’ transition with regards to climate change?

Options:

A.  

A company issues a first transition bond to finance a gas-fired power utility project

B.  

A manufacturer designs products that are more reusable and recyclable to support the circular economy

C.  

A government works with labor unions to develop a social package for displaced workers due to closure of coal mines

Discussion 0
Question # 10

One of the mam principles of stewardship codes calls for institutional investors to:

Options:

A.  

regularly monitor investee companies

B.  

avoid considering conflicts of interest regarding stewardship matters.

C.  

act independently of other investors when escalating stewardship activity

Discussion 0
Question # 11

The concept of double-agency in society refers to the conflict of interest between

Options:

A.  

corporate CEOs and shareholders

B.  

money managers and asset owners.

C.  

corporate CEOs and money managers

Discussion 0
Question # 12

Which of the following statements about ESG integration in fixed income is most accurate?

Options:

A.  

Municipal bonds cannot be considered for ESG integration

B.  

Credit rating agencies attempt to capture the risk of contingent liabilities in their sovereign credit ratings

C.  

Equity investors typically place greater emphasis on ESG factors that affect balance sheet strength compared to fixed-income investors

Discussion 0
Question # 13

The financial crisis of 2008 led to which of the following legislative changes?

Options:

A.  

The Cadbury Code

B.  

The Dodd-Frank Act

C.  

The Greenbury Report

Discussion 0
Question # 14

Using surface water in a business activity is best characterized as a:

Options:

A.  

direct impact on biodiversity

B.  

positive indirect impact on biodiversity

C.  

negative indirect impact on biodiversity

Discussion 0
Question # 15

In response to policy changes, several of the world’s largest automakers made pledges to halt producing cars with internal combustion engines by 2035. Which of the following would an asset manager most appropriately use to address this trend?

Options:

A.  

Factor risk asset allocation model

B.  

Liability-driven asset allocation model

C.  

Regime switching asset allocation model

Discussion 0
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