Pass the CFA Institute Sustainable Investing Certificate Sustainable-Investing Questions and answers with CertsForce

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Viewing questions 91-105 out of questions
Questions # 91:

Creating long-term stakeholder value by implementing a strategy that focuses on the ethical, social, environmental, cultural and economic dimensions of doing business is best described as:

Options:

A.

corporate sustainability.


B.

triple bottom line accounting.


C.

corporate social responsibility.


Expert Solution
Questions # 92:

Over the last several years a company has traded at an average price-to-earnings ratio (P/E) of 12x, compared to a peer group range of 11x to 13x. If the company implements a new risk management framework to better manage material ESG risks relative to its peers, it would most likely justify a P/E ratio of:

Options:

A.

11x


B.

12x


C.

13x


Expert Solution
Questions # 93:

An analyst would most likely increase a company’s discount rate if the company:

Options:

A.

Has strong ESG practices


B.

Faces significant environmental litigation


C.

Is well-positioned to benefit from ESG opportunities


Expert Solution
Questions # 94:

Which of the following are most likely to raise the risks of greenwashing by private equity investors? Investors that integrate ESG factors for the purposes of:

Options:

A.

Value creation


B.

Risk management


C.

Attracting ESG-conscious capital allocators


Expert Solution
Questions # 95:

ESG rating providers:

Options:

A.

Use information reported by companies only if it is audited


B.

Use public documents obtained from nonprofit organizations


C.

Do not use the same sets of CDP (formerly Carbon Disclosure Project) carbon data as an input


Expert Solution
Questions # 96:

Which of the following is most likely a consequence of income inequality?

Options:

A.

An increase in social mobility


B.

A decrease in educational opportunities


C.

An increase in the number of companies adopting aggressive tax optimization strategies


Expert Solution
Questions # 97:

The European Union (EU) Ecolabel:

Options:

A.

Is a mandatory label for companies that apply sustainability labels on their products


B.

Certifies products that have a guaranteed, independently verified, low environmental impact


C.

Contains a list of six key principles designed to prevent businesses from making misleading environmental claims


Expert Solution
Questions # 98:

Morningstar's offering of ESG products and services is an example of a:

Options:

A.

Nonprofit ESG provider


B.

Large, for-profit ESG provider


C.

Boutique, for-profit ESG provider


Expert Solution
Questions # 99:

Scorecards to assess ESG factors:

Options:

A.

Cannot be used to compare a performance with industry averages


B.

Can be adapted to analyze sovereign bonds


C.

Are usually developed based on ESG scores from third-party providers


Expert Solution
Questions # 100:

According to a study by Berg, Koelbel, and Rigobon, the correlation of ESG ratings is:

Options:

A.

High, and this can be a source of insight for investors


B.

Low, and this poses a challenge for empirical research


C.

Low, and this motivates companies to improve their ESG performance


Expert Solution
Questions # 101:

The Jevons paradox refers to:

Options:

A.

Standard cost-benefit analysis being inadequate to quantify the downside losses from climate change


B.

Relative improvement in natural resource efficiency being offset by increasing natural resource consumption


C.

Reduction in snow and ice cover being responsible for lowering the amount of sunlight that is reflected back into space


Expert Solution
Questions # 102:

Which of the following environmental factors for infrastructure projects is most difficult to quantify?

Options:

A.

Solid waste


B.

Water pollution


C.

Biodiversity and habitat


Expert Solution
Questions # 103:

The European Union (EU)'s Carbon Border Adjustment Mechanism is best described as a(n):

Options:

A.

Revision of the EU's energy taxation directive with a focus on existing fossil fuel subsidies


B.

Tool to put a fair price on carbon emitted in the production of carbon-intensive goods entering the EU


C.

Action plan to encourage the development of a sustainable, resource-efficient, low-carbon economy in the EU


Expert Solution
Questions # 104:

The Global Real Estate Sustainability Benchmark (GRESB) full benchmark report provides a GRESB score. The GRESB score includes and weights which of the following considerations?

    Management, policy, and disclosure

    Overall portfolio key performance indicator (KPI) performance

Options:

A.

I, but not II


B.

II, but not I


C.

Both I and II


Expert Solution
Questions # 105:

When constructing net zero portfolios, investors:

Options:

A.

Can follow a clearly accepted standard for netting exposures to carbon risk


B.

Typically agree on how to best account for the role that derivatives and shorts play


C.

Will tend to have overweight equity allocations in the technology sector if they exclude Scope 3 emissions


Expert Solution
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