Sustainable and Ethical Trading Practices
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Questions and Answers

What does sustainable and ethical trading involve?

  • Focusing only on short-term financial returns
  • Considering the environmental, social, and governance (ESG) impacts alongside financial returns (correct)
  • Ignoring company fundamentals
  • Trading without regard for market conditions
  • Which of the following is an example of evaluating the environmental impact in ESG criteria?

  • Assessing a company's labor practices
  • Examining executive pay structures
  • Analyzing a company's carbon footprint and resource use (correct)
  • Reviewing shareholder rights
  • What is the core principle of transparency and accountability in sustainable trading?

  • Keeping trading activities confidential
  • Open communication about trading activities and taking responsibility for their impacts (correct)
  • Prioritizing short-term gains
  • Ignoring ESG factors
  • What does a long-term focus in sustainable trading practices involve?

    <p>Investing in companies with sustainable business practices for long-term value creation</p> Signup and view all the answers

    How can prop trading firms integrate ESG factors into their investment analysis?

    <p>By using ESG screening tools to evaluate potential investments based on ESG performance</p> Signup and view all the answers

    What is active ownership and engagement in the context of sustainable trading?

    <p>Engaging with companies to improve their ESG practices</p> Signup and view all the answers

    Which of the following is an example of avoiding harmful activities in ethical trading?

    <p>Excluding companies involved in environmental degradation or human rights abuses</p> Signup and view all the answers

    How can prop trading firms demonstrate their commitment to sustainable practices?

    <p>By regularly monitoring and reporting on the ESG performance of investments</p> Signup and view all the answers

    What is one of the benefits of sustainable and ethical prop trading?

    <p>Enhanced risk management by considering ESG factors</p> Signup and view all the answers

    How does focusing on sustainable sectors benefit prop trading firms?

    <p>By aligning trading strategies with ethical and sustainable principles</p> Signup and view all the answers

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