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1.
Which of the following investments would a socially responsible investing fund most likely accept in its portfolio?
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A grape grower. Of the four choices, this one is the least objectionable. (Where the grapes end up is, of course, another matter.)
2.
Which statement is false?
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It's easy to build a well-diversified, high-quality portfolio made up only of SRI. Building an all-SRI portfolio can be difficult. There just is not an abundance of good choices in some areas of the market, especially bonds and international stocks.
3.
Because of their ethical criteria, socially responsible funds outperform the average mutual fund.
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False. The results are not uniform. While some funds do outperform the average, there are many that either match it or do worse.
4.
All socially responsible investing funds use shareholder activism.
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False. Some SRI funds use shareholder activism to reform companies, but others just avoid them entirely.
5.
Socially responsible funds _______.
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May screen companies on different values; there's no one SRI approach. Although most SRI funds shun tobacco, alcohol, and nuclear-weapons manufacturers, they can screen on dozens of different criteria. There's no single approach.