Choose wisely. There is only one correct answer to each question.
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1.
Which statement is false?
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.
2.
A socially responsible investing fund would never consider owning stock in a weapons factory.
False. Though it's probably not likely, it would be within the realm of possibility that the fund would judge the weapons factory on other SRI criteria. There is no one set of criteria that all funds agree on.
3.
People who choose socially responsible investing funds are motivated by the same issues.
False. The issues that drive SRI investors vary greatly. For example, one investor may place great value on diversity in the workplace, while another may not.
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.
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.
