CFA Institute ESG-Investing Exam - Topic 5 Question 28 Discussion

Actual exam question for CFA Institute's ESG-Investing exam

Question #: 28
Topic #: 5

Exclusionary screening:

Areduces portfolio tracking error and active share.

Bis the oldest and simplest approach within responsible investment.

Cemploys a given ESG rating methodology to identify companies with better ESG performance relative to its industry peers.

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Suggested Answer: B

by Elroy at May 16, 2026, 01:30 AM

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13 days ago

I think exclusionary screening is more about avoiding certain companies, but I'm not sure how it affects tracking error.

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