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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:

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 Twana at Dec 05, 2024, 06:25 AM

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Delbert

3 months ago

I don't think so, because climate risk can have widespread effects on global markets.

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Ashlee

4 months ago

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

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Brigette

4 months ago

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

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Lashandra

4 months ago

Hey, at least we're not being asked about the climate of other planets. That would really be out of this world!

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Franklyn

2 months ago

B) systemic but not local.

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Wynell

2 months ago

I agree, it's good to focus on what's happening here on Earth.

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Daniel

3 months ago

C) both local and systemic.

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Quentin

3 months ago

A) local but not systemic.

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Delbert

4 months ago

I think the impacts can be both local and systemic.

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Pamella

4 months 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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Filiberto

3 months 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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Joseph

3 months ago

A) local but not systemic.

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Elliot

4 months 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

4 months ago

Local and systemic? Sounds like a double-whammy to me. C definitely seems like the right choice.

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Andra

4 months ago

Climate risk affects us all, both locally and globally. I'd say C is the way to go here.

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Cassi

3 months ago

We need to be proactive in incorporating climate risk into our investment decisions.

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Harley

3 months ago

I think C is the best option to address both local and systemic impacts.

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Peggy

3 months ago

It's important to consider how climate risk can affect asset allocation strategies.

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Caprice

3 months ago

I agree, climate risk can have both local and systemic impacts.

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