LOS l: Explain the use of stock screens based on socially responsible investing (SRI) criteria and discuss their potential impact on a portfolio's style characteristics.
Q1. A socially responsible portfolio tends to shun:
A) basic industries and energy stocks.
B) basic industries and technology stocks.
C) financial and energy stocks.
Q2. A socially responsible portfolio tends to be more heavily weighted in:
A) growth and small-cap stocks.
B) value and small-cap stocks.
C) growth and large-cap stocks.
Q3. What are the two main benefits to monitoring the potential style bias resulting from socially responsible investing? The benefits are the:
A) investor can change his or her social screen and the manager can determine the appropriate benchmark.
B) portfolio manager can take steps to minimize the bias and the manager can suggest alternative socially responsible portfolios to the investor.
C) portfolio manager can take steps to minimize the bias and the manager can determine the appropriate benchmark. |