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CFA Sustainable-Investing Exam
Sustainable Investing Certificate(CFA-SIC) (Page 18 )

Updated On: 9-Feb-2026
Page 18 of 162
PDF with 802 Questions

When searching for an asset manager with an ESG approach, in the request for proposal (RFP) an institutional asset owner would most appropriately ask:

  1. which broad market index the asset manager tracks
  2. detailed questions on specific portfolio holdings of the asset manager
  3. if the asset manager aims for positive, measurable ESG outcomes beyond financial returns

Answer(s): C

Explanation:

When searching for an asset manager with an ESG approach, it is essential for an institutional asset owner to understand whether the asset manager's strategy aligns with their sustainability objectives. The most appropriate question to ask in the RFP is whether the asset manager aims for positive, measurable ESG outcomes beyond financial returns. This question assesses thecommitment to achieving concrete ESG results, which is a critical factor in evaluating the manager's integration of ESG factors into their investment process. Detailed questions about portfolio holdings or which broad market index the manager tracks are less relevant to assessing the ESG integration.



Companies may be excluded from the UK Modern Slavery Act on the basis of:

  1. size only
  2. sector only.
  3. both size and sector

Answer(s): A

Explanation:

Under the UK Modern Slavery Act, companies are required to publish a statement on the steps they have taken to ensure that slavery and human trafficking are not taking place in their business or supply chains. The Act applies to businesses with a turnover of £36 million or more, making size the primary basis for exclusion. There are no sector-specific exclusions mentioned in the Act.



Norms-based screening is the largest investment strategy in

  1. japan
  2. europe
  3. the united states

Answer(s): B

Explanation:

Norms-based screening is the largest investment strategy in Europe. This approach involves screening investments against specific social, environmental, and governance criteria based on international norms and standards. Europe has a strong regulatory and cultural emphasis on responsible investing, which is reflected in the widespread adoption of norms-based screening.

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Compared with younger people, older people are more likely to have:

  1. lower accumulated savings and spend less on consumer goods
  2. higher accumulated savings and spend less on consumer goods.
  3. higher accumulated savings and spend more on consumer goods

Answer(s): B

Explanation:

Older people typically have higher accumulated savings compared to younger people due to their longer work history and accumulation of assets over time. However, they tend to spend less on consumer goods as their consumption patterns change with age, often focusing more on healthcare and essential services rather than discretionary spending on consumer goods.



When assessing credit and ESG ratings, which of the following statements is most accurate?

  1. The correlation between country ESG risk and credit ratings is high
  2. The correlation between ESG ratings among rating providers is high
  3. The correlation between credit ratings among credit rating agencies (CRAs) is low

Answer(s): A

Explanation:

There is a high correlation between country ESG risk and credit ratings. Countries with higher ESG risks typically face higher borrowing costs and lower credit ratings due to the perceived increased risk associated with environmental, social, and governance factors. This correlation reflects the importance of ESG factors in assessing the overall creditworthiness and financial stability of countries.






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