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CFA Institute Exam ESG-Investing Topic 2 Question 1 Discussion

Actual exam question for CFA Institute's ESG-Investing exam
Question #: 1
Topic #: 2
[All ESG-Investing Questions]

In contrast to engagement, monitoring is more likely to result in:

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Suggested Answer: C

Monitoring focuses on tracking a company's performance and ensuring that the investment aligns with ESG objectives, leading to more efficient capital allocation based on data-driven insights. (ESGTextBook[PallasCatFin], Chapter 6, Page 283)


by Kristian at Nov 17, 2024, 06:02 AM

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Lenna
6 months ago
Hah, this question is a real head-scratcher. I bet the answer is C - efficiency is key when you're just monitoring those investments, not actually engaging with the company. Gotta keep those numbers looking good!
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Cecily
5 months ago
Yeah, I agree. Keeping a close eye on things without getting too involved can lead to better capital allocation.
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Nu
5 months ago
I think you're onto something there. Efficiency is definitely important when it comes to monitoring investments.
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Santos
6 months ago
B sounds like the right answer to me. Monitoring is all about building that two-way street, you know? Gotta make sure the company is listening to the investors as much as the other way around.
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Felix
6 months ago
I'm gonna have to go with A. Monitoring is a one-way street, so it's more likely to change company behavior than promote mutual understanding. Gotta keep those executives on their toes!
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Gearldine
5 months ago
Exactly, it's all about ensuring transparency and accountability.
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Tricia
5 months ago
True, but ultimately it's about making sure the company is accountable.
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Shala
5 months ago
But I think monitoring can also lead to better communication with stakeholders.
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Leslie
6 months ago
I agree, monitoring definitely keeps companies in check.
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Nickie
6 months ago
Definitely C. Monitoring is all about keeping tabs on investments, not sharing ideas. That's what engagement is for - the fancy dinner meetings with the CEO.
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Thurman
5 months ago
Engagement and monitoring both have their own benefits for investors and companies.
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Chauncey
6 months ago
I see your point, but I still think efficient capital allocation is the main focus of monitoring.
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Marget
6 months ago
I think monitoring can lead to changed company behaviors as well.
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Sylvie
6 months ago
I agree, monitoring is more about tracking investments than sharing ideas.
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Val
6 months ago
But don't you think changed company behaviors can also be a result of monitoring?
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Rasheeda
7 months ago
I disagree, I believe monitoring leads to a two-way sharing of perspectives.
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Val
7 months ago
I think monitoring is more likely to result in changed company behaviors.
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a