Question 1

An investment analyst is conducting a materiality assessment of ESG factors within a specific industry. When considering factors that could have a significant financial impact on companies, which of the following ESG factors do traditional investment analysts most often take into consideration within investment decisions?

Options :

A : Governance factors

B : Environmental factors

C : Social factors

Answer: B

Question 2

A portfolio manager seeks to compare the ESG performance of portfolio holdings against appropriate benchmarks. When selecting suitable benchmarks for this purpose, to measure ESG factor performance, an analyst should assess:

Options :

A : if there have been changes in management

B : if the investment approach matches the process outlined in the mandate

C : how performance compares to absolute returns

Answer: B

Question 3

With respect to ESG integration in private equity, which of the following is most likely a challenge an investor may face?

Options :

A : Lack of strategy and long-term orientation from private equity managers

B : Lack of capacity within the investee company to fulfill ESG reporting requirements

C :

Reporting frameworks that do not account for the relative lack of transparency found in private markets relative to public markets

Answer: B

Question 4

Globalization has led to a reduction in:

Options :

A : regulation

B : market efficiency

C : social structural inequality

Answer: C

Question 5

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

Options :

A : micro-channel

B : macro-channel

C : company actions

Answer: B

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