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Question 1

Which of the following statements about social trends is most accurate?

Options :

A : Companies within a sector are equally exposed to social trends

B : Social trends have a similar impact across sectors in developed countries

C : The importance of a social trend depends on a country’s regulatory framework

Answer: C

Question 2

Upon conducting a comprehensive risk assessment, an analyst identifies significant risk factors pertaining to a company's social performance. Given the potential impact of these social risks on the company's future financial performance, how would the analyst most likely adjust the cash flow estimates within your financial model?

Options :

A : A lower discount rate and higher liabilities

B : A higher discount rate and higher liabilities

C : A higher discount rate and lower liabilities

Answer: B

Question 3

Investment companies may integrate the various components of ESG in their analysis of a target company by:

Options :

A : determining the longevity of corporate leadership

B : lowering the company’s operating cost estimate

C : lowering the company’s revenue estimate

Answer: C

Question 4

An asset manager adheres to the principles of responsible investment and seeks to actively exercise its ownership rights. Which of the following actions offers the clearest understanding of how stewardship and engagement are connected?

Options :

A : Engagement and stewardship have the same meaning

B : Engagement is one aspect of good stewardship

C : Stewardship is a step in the engagement process

Answer: B

Question 5

Corporate governance codes often mandate the establishment of specific board committees to oversee key areas of responsibility. Which of the following committees is among the core committees typically required by corporate governance best practices?

Options :

A : Risk management committee

B : Nominations committee

C : Governance committee

Answer: B