Canadian Securities Course (CSC) Level 2 Practice Exam

What industries are classified under Industrial GIC according to the provided text?

1. Automobiles

2. Equipment

3. Pharmaceuticals

4. Capital goods

The correct answer is: Capital goods

The classification of industries under Industrial GIC typically includes sectors related to the production of goods that are utilized in the manufacture of products or for providing services. The term "capital goods" refers to durable goods used by businesses to produce goods or services for consumption. This encompasses industries that manufacture machinery, tools, and equipment that are essential for production processes. Industries like automobiles and equipment also relate closely to industrial sectors, but "capital goods" serves as a broader category that encapsulates a wide range of manufacturing activities, thereby making it a more accurate classification in the context given. Pharmaceuticals, while industrial in nature, often fall under a different classification, signifying a separation between healthcare products and traditional industrial manufacturing. Thus, capital goods stands out as the most appropriate classification for Industrial GIC, aligning well with the essence of industrial sectors focused on production mechanisms.