Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
A socially responsible investing fund might engage in shareholder activism within companies it owns because _______.
It wants to change policies it disagrees with. A perfectly ethical company is a rarity; thus, a SRI fund might use activism to mold its companies to its wishes.
2.
A socially responsible investing fund _______.
Might own an oil company. Although generally considered to be unfriendly to the environment, an oil company could be held in an environmentally concerned SRI fund if that fund takes a relative approach. That's why it's important to understand how a fund's screens work.
3.
There is a religious objection to investments that pay interest.
True. Islamic investing forbids the paying of interest, and therefore many Islamic mutual funds do not invest in bonds.
4.
Which of the following investments would a socially responsible investing fund most likely accept in its portfolio?
A grape grower. Of the four choices, this one is the least objectionable. (Where the grapes end up is, of course, another matter.)
5.
Because of their ethical criteria, socially responsible funds outperform the average mutual fund.
False. The results are not uniform. While some funds do outperform the average, there are many that either match it or do worse.
