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CFA Institute Exam ESG-Investing Topic 4 Question 9 Discussion

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

Question #: 9
Topic #: 4

[All ESG-Investing Questions]

The potential impacts of climate risk on asset allocation strategies are:

Alocal but not systemic.

Bsystemic but not local.

Cboth local and systemic.

Show Suggested Answer

Suggested Answer: C

Climate risks have both local and systemic impacts on asset allocation. Local risks pertain to specific regions or industries, while systemic risks can affect the entire financial system due to the global nature of climate change. (ESGTextBook[PallasCatFin], Chapter 3, Page 139)

by Shawn at Jan 23, 2025, 12:09 AM

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Latonia

23 days ago

Option C sounds like the most comprehensive answer. You can't ignore the widespread impact of climate change on our investments.

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Hortencia

6 days ago

It's important to consider both the local and systemic impacts of climate change on our investments.

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Herman

7 days ago

I agree, option C covers all bases when it comes to climate risk and asset allocation strategies.

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Chauncey

28 days ago

I suppose it could be, but considering the interconnectedness of global markets, it's likely to be both.

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Domingo

29 days ago

But can't it also be just local and not systemic?

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Carol

1 months ago

I'd be living in a bubble if I thought climate risk was just a local problem. Gotta go with C on this one.

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Alyssa

1 months ago

Climate change is no joke, man. It's like a one-two punch to your investments. Option C all the way!

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Sabrina

4 days ago

Let's make sure our investment strategies are resilient to climate risks.

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Shalon

7 days ago

Option C seems like the best choice to me as well.

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Luz

17 days ago

I think we need to consider both local and systemic impacts when it comes to asset allocation.

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Cordelia

21 days ago

I agree, climate change is a serious threat to our investments.

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Leonard

1 months ago

I agree with Chauncey, climate risk can affect both local and systemic asset allocation strategies.

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Chauncey

1 months ago

I think the potential impacts of climate risk are both local and systemic.

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Linn

2 months ago

I'm pretty sure the answer is C. Climate risk is a global issue, affecting both local and systemic asset allocation strategies.

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Haydee

29 days ago

Diversifying investments to account for both local and systemic climate risks is key for a well-rounded asset allocation strategy.

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Stephania

1 months ago

It's important to consider how climate risk can affect different levels of asset allocation, not just locally or systemically.

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Ammie

1 months ago

I agree, climate risk definitely has both local and systemic impacts on asset allocation strategies.

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