FSA Level 1 Exam EXAM ELABORATIONS
QUESTIONS AND VERIFIED ANSWERS 2025
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Terms in this set (75)
To generate alpha (above market returns)
Why are investors
To better assess risk
demanding ESG info?
To evaluate the predictability of investment outcomes
Why do companies want To improve near, medium, and long term performance
qualitative and To manage risks and opportunities
quantitative ESG info To effectively communicate with investors and lower
about themselves? the cost of capital
Identify and mitigate risks
What can identifying
Reduce costs
sustainability KPIs and
Optimize efficiencies
managing them do for a
Increase market share and revenue growth with new
company?
products or services
International, national, and local policy-based
initiatives (government regulators) pass
What other institutions recommendations, guidance, and regulatory
demand ESG information? requirements
Securities exchanges
Industry associations
, Why was disclosure the It promotes transparency
basis for regulatory reform Protects investors
after the 1930s market Promotes good corporate governance
crash? Enables informed investor decisions
Traditionally focuses on info that impacts financials
and investor decision-making
How has "Materiality" Used to create guidelines for companies for
been defined over time? disclosure
Focusing only on what's material prevents companies
from undue reporting burden
It was historical cost counting
Then if became a range of unique methodologies for
What was the basis for each company that were not comparable
accounting in the 1930s, (fragmentation)
and what is it now? Ultimately accounting focused on decision-useful
information, and became standardized through
standards like IFRS and GAAP.
Intellectual capital
What are examples of Customer relationships
intangible assets? Brand value
Other "soft" assets
What does the rise in Much important information is not captured in
intangible assets in financial disclosure
percentage of total S&P There is an information gap relating to intangible
market value mean for assets
corporate disclosure?
Non-financial info can help predict a company's long-
The investment community
term value
endorses including non-
They're increasingly rejecting extreme short-termism
financial disclosures
They are accepting that long-term value generation is
because:
in the fiduciary duty of care
QUESTIONS AND VERIFIED ANSWERS 2025
UPDATE | 100% SOLVED!!
Save
Terms in this set (75)
To generate alpha (above market returns)
Why are investors
To better assess risk
demanding ESG info?
To evaluate the predictability of investment outcomes
Why do companies want To improve near, medium, and long term performance
qualitative and To manage risks and opportunities
quantitative ESG info To effectively communicate with investors and lower
about themselves? the cost of capital
Identify and mitigate risks
What can identifying
Reduce costs
sustainability KPIs and
Optimize efficiencies
managing them do for a
Increase market share and revenue growth with new
company?
products or services
International, national, and local policy-based
initiatives (government regulators) pass
What other institutions recommendations, guidance, and regulatory
demand ESG information? requirements
Securities exchanges
Industry associations
, Why was disclosure the It promotes transparency
basis for regulatory reform Protects investors
after the 1930s market Promotes good corporate governance
crash? Enables informed investor decisions
Traditionally focuses on info that impacts financials
and investor decision-making
How has "Materiality" Used to create guidelines for companies for
been defined over time? disclosure
Focusing only on what's material prevents companies
from undue reporting burden
It was historical cost counting
Then if became a range of unique methodologies for
What was the basis for each company that were not comparable
accounting in the 1930s, (fragmentation)
and what is it now? Ultimately accounting focused on decision-useful
information, and became standardized through
standards like IFRS and GAAP.
Intellectual capital
What are examples of Customer relationships
intangible assets? Brand value
Other "soft" assets
What does the rise in Much important information is not captured in
intangible assets in financial disclosure
percentage of total S&P There is an information gap relating to intangible
market value mean for assets
corporate disclosure?
Non-financial info can help predict a company's long-
The investment community
term value
endorses including non-
They're increasingly rejecting extreme short-termism
financial disclosures
They are accepting that long-term value generation is
because:
in the fiduciary duty of care
