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CFA Institute Exam ESG-Investing Topic 5 Question 7 Discussion

Actual exam question for CFA Institute's ESG-Investing exam
Question #: 7
Topic #: 5
[All ESG-Investing Questions]

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

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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)


Contribute your Thoughts:

Delbert
5 days ago
I think the impacts can be both local and systemic.
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Pamella
6 days ago
C, because the climate doesn't respect borders or economic boundaries. This is a worldwide problem that requires a comprehensive solution.
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Elliot
10 days ago
The climate is a complex beast, and its impacts are just as widespread. C is the only option that really captures the full scope of the issue.
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Arlie
12 days ago
Local and systemic? Sounds like a double-whammy to me. C definitely seems like the right choice.
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Andra
13 days ago
Climate risk affects us all, both locally and globally. I'd say C is the way to go here.
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