ESG Integration in Portfolio Management Quiz

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Questions and Answers

What is the impact of ESG factors on strategic asset allocation?

ESG factors primarily affect short-term market trends
ESG factors may influence the long-term risk and return characteristics of asset classes (correct)
ESG factors have no impact on strategic asset allocation
ESG factors only impact alternative investments

What are the main indexes and benchmarking approaches applicable to sustainable and ESG investing?

There is only one widely accepted index for ESG investing
Traditional indexes are more suitable for ESG investing
Benchmarking is not applicable to sustainable and ESG investing
There are various indexes and benchmarking approaches with potential limitations (correct)

How is ESG integrated into the portfolio management process?

By excluding ESG considerations from the investment process
By incorporating ESG analysis into investment decision-making (correct)
By relying on external ESG research exclusively
By focusing solely on financial performance

What is the difference between ESG screening of individual companies and collective investment funds?

<p>ESG screening can be done on an absolute basis and relative to sector/peer group data for both individual companies and collective investment funds (D)</p> Signup and view all the answers

What is the application of ESG screens to the main asset classes and their sub-sectors?

<p>ESG screens can be applied to fixed income, equities, and alternative investments (A)</p> Signup and view all the answers

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Study Notes

CFA Institute - Integrated Portfolio Construction and Management Learning Outcomes

Learning outcome 8.1.1: Impact of ESG factors on strategic asset allocation
Learning outcome 8.1.2: Approaches for integrating ESG into portfolio management process
Learning outcome 8.1.3: Use of internal and external ESG research and analysis by portfolio managers for investment decisions
Learning outcome 8.1.4: Different approaches to screening and benefits/limitations
Learning outcome 8.1.5: Main indexes and benchmarking approaches for sustainable and ESG investing, with potential limitations
Learning outcome 8.1.6: Applying ESG screens to asset classes and sub-sectors: fixed income, equities, and alternative investments
Learning outcome 8.1.7: Distinguishing ESG screening of individual companies and collective investment funds on absolute and relative bases
Learning outcome 8.1.8: (text truncated)