Canadian Securities Course (CSC) Level 2 Practice Exam

Which sector encompasses Capital goods and Transportation as mentioned in the text?

1. Health care

2. Industrial

3. Emerging Growth Industries

4. Consumer Discretionary

The correct answer is: Industrial

The choice of the industrial sector is correct because it is defined by its focus on the production and manufacturing of goods, which includes capital goods and transportation. Capital goods are the physical assets that a company uses in the production process to manufacture products and services, covering everything from machinery to buildings. Transportation falls within this sector as it plays a crucial role in moving these goods from one location to another, facilitating trade and commerce. In contrast, the other sectors mentioned do not typically involve capital goods or transportation in the same direct manner. Health care is primarily concerned with services and products related to medical services and treatments. Emerging Growth Industries focus on newer sectors with high growth potential, often without established industries such as transportation. Consumer Discretionary involves companies that produce goods and services that are non-essential, which would not include the fundamental infrastructure provided by capital goods and transportation. Thus, the industrial sector is the most accurate classification for these elements.