Canadian Securities Course (CSC) Level 1 Practice Exam

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What is an equity security? Give an example of one.

Cryptocurrencies
Options
Stocks
Derivatives

The correct answer is: Stocks

An equity security represents ownership in a corporation. By holding equity securities such as stocks, an individual becomes a partial owner of the company. Stocks are issued by companies to raise capital and provide investors with the opportunity to participate in the company's success through capital appreciation and dividends. Therefore, the correct answer is C - Stocks. Cryptocurrencies, options, and derivatives are not examples of equity securities as they do not represent ownership in a company.