CFA Institute ESG-Investing Exam - Topic 5 Question 3 Discussion

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

Question #: 3
Topic #: 5

[All ESG-Investing Questions]

Which of the following statements is most accurate? Faith-based Islamic investors:

Amay invest in gambling companies.

Bmay own investments that pay interest.

Clook to invest in line with Shariah principles.

Show Suggested Answer

Suggested Answer: C

Faith-based Islamic investors follow Shariah principles, which prohibit investments in industries such as gambling, alcohol, and those earning interest (riba). (ESGTextBook[PallasCatFin], Chapter 1, Page 31)

by Tawna at Nov 13, 2024, 08:35 PM

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Olive

6 months ago

B sounds a bit too risky for faith-based investors.

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Layla

6 months ago

C aligns perfectly with Islamic finance principles.

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Malcom

6 months ago

Wait, can they really invest in gambling? That seems off.

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Yong

7 months ago

I disagree, A could be a possibility in some interpretations.

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Josephine

7 months ago

C is definitely the right choice.

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Toshia

7 months ago

I’m leaning towards C as well; it aligns with what we learned about ethical investing in Islam.

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Evangelina

7 months ago

A seems unlikely since gambling is generally not allowed in Islamic finance, but I’m a bit confused about the specifics.

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Viki

7 months ago

I remember a practice question that mentioned Islamic finance prohibits interest, so I feel like B can't be correct.

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Mary

7 months ago

I think C is the right answer because Islamic investors typically follow Shariah principles, but I'm not completely sure.

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Rozella

7 months ago

I feel like I should know this, but I'm drawing a blank. I'll have to go back and review the key principles of Islamic finance before answering this. Definitely don't want to guess on this one.

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Kent

7 months ago

Okay, let me see. I know that Islamic investing avoids things like gambling and interest-bearing investments, so A and B are probably not correct. I'm leaning towards C, but I want to double-check that to be sure.

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Jeannetta

7 months ago

Hmm, I'm a bit unsure about this one. I know that Islamic investing has some restrictions, but I can't remember the specifics off the top of my head. I'll need to think this through carefully.

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Carma

8 months ago

This question seems pretty straightforward. I'm pretty confident that the correct answer is C - faith-based Islamic investors look to invest in line with Shariah principles.

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Antione

1 year ago

Option C is the most accurate statement. Islamic investors need to be on their best behavior when it comes to their investments, or they might end up with a heavenly audit.

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Junita

1 year ago

C is the obvious choice here. Shariah principles are like the financial Ten Commandments for Muslim investors. No way they're getting a get-out-of-jail-free card on the interest or gambling stuff.

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Ma

1 year ago

Haha, imagine an Islamic investor trying to invest in a casino - that's a recipe for some divine retribution! C is definitely the way to go.

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Krissy

1 year ago

Definitely C, can't go against your beliefs when investing.

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Ellsworth

1 year ago

C) look to invest in line with Shariah principles.

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Galen

1 year ago

B) may own investments that pay interest.

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Estrella

1 year ago

A) may invest in gambling companies.

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Emily

1 year ago

But what about option B? Some may argue that owning investments that pay interest is not allowed.

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Pauline

1 year ago

I agree with Tijuana, Islamic investors follow Shariah principles.

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Tijuana

1 year ago

I think the most accurate statement is C.

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Marla

1 year ago

I'm pretty sure C is the correct answer. Faith-based Islamic investors are required to invest in line with Shariah principles, which prohibit investments in gambling and interest-bearing activities.

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