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Funds 304: Socially Responsible Investing Funds

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1.
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.
2.
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.
3.
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.)
4.
A socially responsible investing fund would never consider owning stock in a weapons factory.
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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.
5.
Shareholder activism is a key for _______.
Choose wisely. There is only one correct answer.
Some SRI funds. Some SRI funds engage in shareholder activism to reform companies. Others simply shun those companies.