Canadian Securities Course (CSC) Level 1 Practice Exam 2025 – All-In-One Guide to Master Your Exam Prep!

Question: 1 / 400

What is insider trading?

Trading based on public information

Trading based on expert analysis

Trading by individuals with inside information

Insider trading refers to the act of buying or selling a publicly-traded company's stock based on material, non-public information about the company. Individuals who possess such information—often due to their positions within the company—have an unfair advantage over other investors who do not have access to that information. This practice is typically illegal, as it undermines investor confidence and the integrity of the financial markets.

The other options do not accurately describe insider trading. Trading based on public information and expert analysis does not entail any unethical advantage and is part of common investment practices. Trading in international markets is simply a form of trading and does not relate to the concept of insider trading. Therefore, the definition that identifies trading by individuals with inside information most accurately captures the essence of insider trading.

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Trading in international markets

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