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CFA ESG Practice Tests and Questions for Exam Preparation

Preparing for the CFA ESG Exam requires a focused and strategic approach, and using practice questions is the closest way to prepare for the exam and ensure you are ready for success. Practice questions allow you to engage with the material in a practical way, helping you to understand the key concepts and principles that the CFA ESG Exam will cover. By regularly completing practice questions, you can gauge your knowledge and pinpoint areas where you may need additional study or review. This method not only reinforces your learning but also helps you become more familiar with the exam's question formats and the types of content that are most likely to appear. Additionally, practice tests simulate the actual exam conditions, providing you with the opportunity to develop your time management skills and reduce exam-day anxiety. Incorporating practice questions into your study routine ensures that you are not just passively absorbing information but actively applying what you’ve learned, which is critical for retaining complex ESG topics. Overall, practice questions are an indispensable tool for anyone serious about passing the CFA ESG Exam and excelling in this crucial certification.

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Question #1
In which of the following asset classes is ESG integration most common?
A. Equity
B. Fixed income
C. Alternative assets
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Correct Answer: A
Question #2
Consideration and prioritization of ESG factors is an element of sustainable investing of which dimension in McKinsey's framework that describes sustainable investing practices?
A. Investment mandate
B. Resources and organization
C. Investment beliefs and strategy
View answer
Correct Answer: C
Question #3
Which of the following statements is most accurate? Intermediaries:
A. are required to act as a fiduciary to asset managers
B. provide investment advice to asset owners including asset allocation and manager selection
C. make investment decisions on behalf of asset owners pursuant to guidelines stated in the investment management agreement
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Correct Answer: B
Question #4
Which of the following countries has two-tier boards?
A. France
B. Germany
C. United States
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Correct Answer: B
Question #5
Effective goal-setting for an an engagement strategy most likely includes:
A. articulating stretch goals and milestones
B. fitting the goals into a cohesive global context
C. framing the goals as part of strategy and long-term financial performance
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Correct Answer: C
Question #6
Which of the following is notable for a commitment to phase down the use of unabated coal power?
A. The Ottawa Treaty
B. The Glasgow Climate Pact
C. The Kigali Amendment to the Montreal Protocol
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Correct Answer: B
Question #7
ESG engagement most likely involves close collaboration between the investor and investee for:
A. fund investments
B. infrastructure investments
C. sovereign debt investments
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Correct Answer: B
Question #8
Which of the following statements regarding the use of ESG data is most accurate? ESG data:
A. have limited use outside company ESG assessment
B. can be used to model future sustainability scenarios
C. cannot be used for forward-looking assessments of business strength and valuation
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Correct Answer: B
Question #9
A rules-based approach that integrates ESG into the portfolio management process and results in a large number of holdings is best described as:
A. quantitative
B. fundamental
C. discretionary
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Correct Answer: A
Question #10
Which of the following statements about constructive engagement is most accurate?
A. Dialogue with the company should initially take place privately without media attention
B. For governance matters, an engager should start by engaging the company's sustainability team
C. An engager should explain how a proposed course of action is in line solely with the investor's best interests
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Correct Answer: A
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