Sustainable-Investing Dumps with Practice Exam Questions Answers [Q10-Q32]

September 12, 2025 Sustainable-Investing, CFA Institute 0 Comments

Sustainable-Investing Dumps with Practice Exam Questions Answers [Q10-Q32]

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Sustainable-Investing Dumps with Practice Exam Questions Answers

Sustainable-Investing by Sustainable Investing Certificate Actual Free Exam Practice Test

QUESTION 10
Shocks around pay levels at newly privatized utilities led to the:

Dodd-Frank Act

Greenbury Report

Sarbanes-Oxley Act

QUESTION 11
According to an OECD Centre for Opportunity and Equality (COPE) 2015 report, the average income of the richest 10% of the population is about:

4 times that of the poorest 10 percent across the OECD.

9 times that of the poorest 10 percent across the OECD.

14 times that of the poorest 10 percent across the OECD.

QUESTION 12
Which of the following asset classes is most sensitive to climate-related transition risk?

Equity

Fixed income

Alternative investments

QUESTION 13
Using surface water in a business activity is best characterized as a:

direct impact on biodiversity

positive indirect impact on biodiversity

negative indirect impact on biodiversity

QUESTION 14
Primary data sources for ESG data include:

ESG rating firms.

surveys of company managers.

assessments made by non-governmental organizations.

QUESTION 15
Negative screening for ESG factors in portfolios:

results in static exclusions.

can exclude an entire country.

is commonly applied to all asset classes.

QUESTION 16
The divergence of ratings among ESG providers most likely.

enhances the credibility of empirical research

ensures that ESG performance is reflected in asset prices.

hampers the ambition of companies to improve their ESG performance

QUESTION 17
Commodity price volatility resulting in profits vulnerability for companies is most likely an example of financial risk transmission by:

micro-channel

macro-channel

company actions

QUESTION 18
The consulting firm McKinsey & Company includes transparency as part of which of the following dimensions of an asset manager’s investment approach?

Public reporting

Tools and processes

Resources and organization

QUESTION 19
Jurisdictions are most likely to impose extraterritorial laws in relation to:

bribery and corruption

paying suppliers appropriately and promptly.

upholding high standards in health and safety

QUESTION 20
An airline leads its industry in implementing all technologically and economically feasible low-carbon technologies. However, the airline still generates substantial carbon emissions. These remaining carbon emissions:

reflect manageable risks.

should not contribute to the airline’s ESG score.

do not indicate a failure of the airline’s management to address material ESG risks.

QUESTION 21
If a company has significant cash on its balance sheet, investors are most likely to prefer that the company:

has some debt.

has a low dividend payout ratio.

operates in multiple businesses.

QUESTION 22
Negative screening of tobacco-related companies is best grouped into which of the following basic categories?

Universal exclusion

Idiosyncratic exclusion

Conduct-related exclusion

QUESTION 23
What order should investors follow when implementing social factors in their investment decisions?
Process 1: Assess the critical social factors in the supply chain
Process 2: Assess how exposed companies are to sector-specific social factors Process 3: Assess which social factors are most financially material in a particular industry

Process 1, followed by Process 2, and then Process 3

Process 2, followed by Process 1, and then Process 3

Process 3, followed by Process 2, and then Process 1

When implementing social factors in their investment decisions, investors should follow a structured approach to ensure a comprehensive analysis and integration of these factors. The recommended order is:
Assess which social factors are most financially material in a particular industry (Process 3):
This first step involves identifying the social factors that have the most significant financial impact on companies within a specific industry. Financial materiality refers to the degree towhich a social factor can influence a company’s financial performance. For example, labor practices may be highly material for the apparel industry, whereas data privacy might be more critical for technology companies .
Assess how exposed companies are to sector-specific social factors (Process 2):
After identifying the financially material social factors, the next step is to evaluate the extent to which companies within the industry are exposed to these factors. This involves analyzing the companies’ business models, geographic locations, and operational practices to determine their vulnerability and potential impact from these social issues. For instance, a company operating in a region with strict labor laws will have different exposures than one in a less regulated environment .
Assess the critical social factors in the supply chain (Process 1):
Finally, investors should examine the supply chain to understand the social risks and opportunities associated with suppliers and subcontractors. This includes evaluating labor practices, health and safety standards, and community relations within the supply chain. This step ensures that the entire value chain is scrutinized for social risks that could affect the company’s reputation and financial performance .
By following this order, investors can ensure a thorough and effective integration of social factors into their investment decision-making process. This approach aligns with best practices in ESG investing, as it prioritizes financial materiality and exposure before delving into supply chain specifics, providing a comprehensive view of social risks and opportunities .

QUESTION 24
The European Union (EU) Ecolabel:

is the official EU voluntary label for environmental excellence

targets explicit claims made on a voluntary basis by businesses towards consumers

flags products that have a guaranteed, independently verified, high environmental impact

QUESTION 25
Compared to older, more established companies, start-up companies most likely:

have better systems in place to manage social risks in their supply chain.

find it harder to respond when a company with a disruptive business model enters their market.

have less effective systems in place to manage social risks in their supply chain and find it easier to respond when a company with a disruptive business model enters their market.

QUESTION 26
Elements of ESG integration include adjusting:

Financial forecasts only

Valuation multiples only

Both financial forecasts and valuation multiples

QUESTION 27
In the investment management industry, triple bottom line accounting theory:

replaces a broader framework of sustainability.

complements a broader framework of sustainability.

has been replaced by a broader framework of sustainability.

QUESTION 28
In an emissions trading system:

Emissions caps are fixed over time

Permits may be allocated free of charge

Price signals cannot be created from the trading of permits