Module 1, Assessment: Course 6: Serving The Greater Good

Module 1, Assessment: Course 6: Serving the Greater Good 29/04/24, 3:38 PM
Module 1, Assessment
Due No due date
Points 10
Questions 10
Time Limit None
Allowed Attempts 3
Instructions
The following assessment consists of 10 multiple-choice questions worth one point each.
Be sure to review all module content before you attempt this assessment. You will not be
able to move on in the course (the subsequent modules will be locked) until you complete
the assessment and earn the minimum passing score of 70%.
You will have three attempts to achieve a passing score. If you have not passed after your
third attempt, please send a message to ‘Course Staff’ from the ‘Inbox’ in the navigation
menu.
Good luck on getting a successful score.
Take the Quiz Again
Attempt History
Attempt Time Score
KEPT Attempt 2 5 minutes 8 out of 10
LATEST Attempt 2 5 minutes 8 out of 10
Attempt 1 9 minutes 3 out of 10
Score for this attempt: 8 out of 10

Submitted Apr 29 at 6:07am
https://learn.cfainstitute.org/courses/70/quizzes/214 Page 1 of 5
This attempt took 5 minutes.

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Question 1
0 / 1 pts
Which of the following would most likely be identified as a challenge to integrating ESG factors?
Correct Answer
The perception that implementing ESG may have a negative impact on investment performance
A higher number of negative externalities
You Answered
Higher costs required for the implementation of ESG
Reduced costs and other efficiencies are likely benefits from implementing sustainable business
practices.

Question 2
1 / 1 pts
Transition risks would be classified as risks relating to the:
Correct!
environmental factor.
Transition risks relate to the environmental factor; they are a result of changes in climate and
energy policies, a shift to low carbon technologies, and liability issues
governance factor.
social factor.
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Question 3
1 / 1 pts
One characteristic of effective engagement is a:
focus on short-term value creation.
Correct!
recognition that change is a process and should not be inappropriately rushed.
One characteristic of effective engagement is recognition that change is a process and should not
be inappropriately rushed. Another characteristic is a focus on long-term value preservation and
creation. Furthermore, if engagement is to be effective in generating change outcomes, it requires
that a clear objective is set from the start.

belief that engagement objectives should not be set until after meeting with company management.

Question 4
0 / 1 pts
Which of the following statements regarding ESG and fiduciary duty is correct? In practice:
most regulators have yet to take action on requiring investors to consider ESG issues in their investment
decision-making processes.
Correct Answer
some investors have used the concept of fiduciary duty as a reason to not incorporate ESG issues because of a
belief that ESG factors are not financially material.
You Answered
excluding ESG issues is not considered a breach of fiduciary duty because ESG issues are not considered long-
term value drivers.
Failing to consider long-term value drivers, which include ESG issues, in investment practice is
widely considered a failure of fiduciary duty.

Question 5
1 / 1 pts
Which of the following factors would be classified as a social factor?
Pressures on natural resources
Accountability
Correct!
Human capital deployment
Human capital deployment is an example of a social factor. A company’s long-term human capital
deployment strategy should take into account the development of its workforce. This focus
ensures that the workforce is well-equipped for performing its tasks and responsibilities, operates
under the latest standards and regulations, and remains motivated.

Question 6
1 / 1 pts
Most of the research to date on the impact of ESG factors on corporate financial performance
suggests that implementing ESG has:
no impact on financial performance.

Correct!
a positive impact on financial performance.
An analysis of more than 2,000 academic studies on how ESG factors affect corporate financial
performance found an overwhelming share of positive results. Various research also indicates that
engaging with companies on ESG issues can create value for both investors and companies by
encouraging better ESG risk management and more sustainable business practices. These
provide evidence that ESG issues can be financially material to companies’ performance and
potentially to alpha.
a negative impact on financial performance.

Question 7
1 / 1 pts
Which of the following statements regarding stewardship and engagement is correct? They:
are focussed on short-term value preservation and creation.
are costly and time-consuming endeavours, resulting in a loss of shareholder value.

Correct!
support investors in the execution of their fiduciary duty.
Stewardship and engagement are beneficial because they enhance shareholder value and
support investors in the execution of their fiduciary duty. Stewardship and engagement enhance
shareholder value by focussing on long-term value preservation and creation.

Question 8
1 / 1 pts
Which of the following approaches to investing has a return expectation that is solely focused on
social returns?

Correct!
User Guides
Venture philanthropy
The return expectation of a venture philanthropy approach to investing is focussed on generating
social returns only.

Impact investing
Social investing
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Question 9
1 / 1 pts
Factors that can be categorised between those impacting both a company’s external stakeholders
and internal stakeholders are referred to as:
environmental factors.
Correct!
social factors.
Social factors — the ‘S’ in ESG — can be categorised between those impacting external
stakeholders (such as customers, local communities, and governments) and groups of internal
stakeholders (such as a company’s employees).
governance factors.

Question 10
1 / 1 pts
Which approach to socially responsible investing involves selecting only those companies that
overcome a defined ranking hurdle, established using ESG criteria within each sector or industry?
Correct!
Best-in-class investment
The best-in-class investment approach involves selecting only those companies that overcome a
defined ranking hurdle, established using ESG criteria within each sector or industry. Typically,
companies are scored on a variety of factors that are weighted according to the particular sector.
The portfolio is then assembled from the list of qualified companies
Sustainable investment
Thematic investment
Quiz Score: 8 out of 10

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Module 1, Assessment: Course 6: Serving the Greater Good 29/04/24, 3:38 PM

Good luck on getting a successful score.

Take the Quiz Again

LATEST Attempt 2 5 minutes 8 out of 10

Attempt 1 9 minutes 3 out of 10

Score for this attempt: 8 out of 10

This attempt took 5 minutes.

A higher number of negative externalities

that a clear objective is set from the start.

no impact on financial performance.

are costly and time-consuming endeavours, resulting in a loss of shareholder value.

Quiz Score: 8 out of 10

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