CFA Institute Sustainable-Investing Question Answer
The primarily used ESG indices:
A.
Use similar criteria and weightings
B.
Are available for both equity and fixed-income asset classes
C.
Provide data to backtest performance across multiple market cycles
The Answer Is:
B
This question includes an explanation.
Explanation:
ESG indices exist forboth equity and fixed income, covering a range of investment vehicles such ascorporate bonds, sovereign bonds, and green bonds. Major providers likeMSCI, S&P, and FTSE Russelloffer ESG indices across asset classes.
Option A is incorrect because ESG index methodologies vary significantly between providers. Option C is misleading becausebacktesting ESG performanceis complex due tolimited historical ESG data.
[References:, MSCI ESG Index Methodology, S&P Dow Jones ESG Index Framework, Morningstar ESG Fund Analysis, , , ]
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