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Funds 304: Socially Responsible Investing Funds

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1.
There is a religious objection to investments that pay interest.
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True. Islamic investing forbids the paying of interest, and therefore many Islamic mutual funds do not invest in bonds.
2.
People who choose socially responsible investing funds are motivated by the same issues.
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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.
3.
Shareholder activism is a key for _______.
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Some SRI funds. Some SRI funds engage in shareholder activism to reform companies. Others simply shun those companies.
4.
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.
5.
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.