Canadian Securities Course (CSC) Level 1 Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Canadian Securities Course Level 1 Exam with our comprehensive study tool. Use flashcards and multiple choice questions to hone your skills. Fully understand each topic with hints and explanations. Get ready to excel in your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is insider trading?

Trading based on public information
Trading based on expert analysis
Trading by individuals with inside information
Trading in international markets

The correct answer is: 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.