CFA /
ESG
/ /
Glossary
/ /
Exam Questions With Correct Answers
/ // // // //
Active /
/Ownership //- /
/CORRECT /
/ANSWERS(S)✔✔Active /
/ownership /
/represents /
/actively /
/exercising /
/ones /
/right /
/as /
/the /
/shareholder /
/of //
a/
/company, /
/particularly /
/active //engagement //with //management, //and //discussion //on //both //financial //and //non-
financial //ESG //factors.
Active /
/Risk //- /
/CORRECT /
/ANSWERS(S)✔✔The /
/risk /
/that //
a/
,/portfolio /
/assumes /
/in /
/an /
/effort /
/to /
/compete /
/against /
/and /
/beat /
/its /
/benchmark /
/index. //It //represents //how //closely //as //portfolio //tracks //to //or //deviates //from //its //benchmark.
Activism //- /
/CORRECT /
/ANSWERS(S)✔✔A /
/form /
/of /
/investing /
/where /
/the /
/fund /
/manager /
/(often /
/referred /
/to /
/as /
/an /
/activist) /
/buys /
/into //
a/
/company /
/with //the //express //intention //of //generating //additional //returns //by //catalysing //change.
,AGM, /
/EGM //- /
/CORRECT /
/ANSWERS(S)✔✔- /
/Respectively, //annual //general //meeting //and //extraordinary //general //meeting.
-/
/The /
/formal /
/gatherings /
/of /
/shareholders /
/to /
/agree /
/official /
/business /
/of //
a/
/company. /
/The /
/shareholders /
/have /
/the /
/right /
/to /
/take /
/some /
/decisions /
/about /
/the /
/future /
/of /
/the /
/company /
/and /
/these /
/are /
/the /
/occasions /
, /when /
/those /
/decisions /
/are /
/taken. /
/The /
/agendas /
/very /
/much //depend //on //the //law //of //the //state //or //country //of //incorporation //of //the //company.
Alpha //Generation //- //CORRECT //ANSWERS(S)✔✔The //risk-
adjusted /
/contribution /
/of /
/the /
/value /
/that //
a/
/portfolio /
/manager //contributes //- //either //adding //or //subtracting //- //to //the //fund's //investment //returns.
Animal /
/Welfare //- /
/CORRECT //ANSWERS(S)✔✔How //an //animal //copes //with //the //conditions //in //which //it //lives
Automation //- /
/CORRECT /
/ANSWERS(S)✔✔Technology /
/by /
/which //
a/
/process /
/or /
/procedure /
/is /
ESG
/ /
Glossary
/ /
Exam Questions With Correct Answers
/ // // // //
Active /
/Ownership //- /
/CORRECT /
/ANSWERS(S)✔✔Active /
/ownership /
/represents /
/actively /
/exercising /
/ones /
/right /
/as /
/the /
/shareholder /
/of //
a/
/company, /
/particularly /
/active //engagement //with //management, //and //discussion //on //both //financial //and //non-
financial //ESG //factors.
Active /
/Risk //- /
/CORRECT /
/ANSWERS(S)✔✔The /
/risk /
/that //
a/
,/portfolio /
/assumes /
/in /
/an /
/effort /
/to /
/compete /
/against /
/and /
/beat /
/its /
/benchmark /
/index. //It //represents //how //closely //as //portfolio //tracks //to //or //deviates //from //its //benchmark.
Activism //- /
/CORRECT /
/ANSWERS(S)✔✔A /
/form /
/of /
/investing /
/where /
/the /
/fund /
/manager /
/(often /
/referred /
/to /
/as /
/an /
/activist) /
/buys /
/into //
a/
/company /
/with //the //express //intention //of //generating //additional //returns //by //catalysing //change.
,AGM, /
/EGM //- /
/CORRECT /
/ANSWERS(S)✔✔- /
/Respectively, //annual //general //meeting //and //extraordinary //general //meeting.
-/
/The /
/formal /
/gatherings /
/of /
/shareholders /
/to /
/agree /
/official /
/business /
/of //
a/
/company. /
/The /
/shareholders /
/have /
/the /
/right /
/to /
/take /
/some /
/decisions /
/about /
/the /
/future /
/of /
/the /
/company /
/and /
/these /
/are /
/the /
/occasions /
, /when /
/those /
/decisions /
/are /
/taken. /
/The /
/agendas /
/very /
/much //depend //on //the //law //of //the //state //or //country //of //incorporation //of //the //company.
Alpha //Generation //- //CORRECT //ANSWERS(S)✔✔The //risk-
adjusted /
/contribution /
/of /
/the /
/value /
/that //
a/
/portfolio /
/manager //contributes //- //either //adding //or //subtracting //- //to //the //fund's //investment //returns.
Animal /
/Welfare //- /
/CORRECT //ANSWERS(S)✔✔How //an //animal //copes //with //the //conditions //in //which //it //lives
Automation //- /
/CORRECT /
/ANSWERS(S)✔✔Technology /
/by /
/which //
a/
/process /
/or /
/procedure /
/is /
