Which of the following best describes Socially Responsible Investing (SRI)?

Study for the Portfolio Management Test. Enhance your skills with flashcards, multiple choice questions, hints, and detailed explanations. Prepare effectively for your exam!

Socially Responsible Investing (SRI) is best described as investment strategies that consider both financial return and social or environmental good. This means that when investors engage in SRI, they are not only focused on achieving high financial returns but also on making a positive impact on society and the environment. This approach reflects the growing recognition that businesses can contribute to sustainable development and social progress while still providing returns to their investors.

Option A focuses exclusively on maximizing financial returns, which does not encompass the ethical and social considerations inherent to SRI. Option B, while addressing environmental sustainability, falls short by ignoring other critical aspects such as social justice, corporate governance, and community impacts. Option D prioritizes speculative gains, which is contrary to the principles of SRI, as it often involves higher risks and is not aligned with the goal of fostering social or environmental benefits.

Thus, the correct answer emphasizes a balanced approach that integrates financial objectives with the desire to generate positive social or environmental outcomes, making it the most accurate representation of SRI.

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