Canadian Securities Course (CSC) Level 2 Practice Exam 2025 - Free CSC Level 2 Practice Questions and Study Guide

The correct classification of sectors under Consumer Discretionary includes items that are not considered essential and are reliant on consumer spending. Automobiles fit this classification as they are considered luxury or non-essential goods that consumers purchase at their discretion based on their financial situation.

While apparel also falls under the Consumer Discretionary category, it is more directly linked to fashion and lifestyle choices. Consumer staples, on the other hand, refer to essential items that consumers require regardless of their income status, and pharmaceuticals typically fall into the healthcare sector, reflecting products necessary for health rather than discretionary spending.

By identifying automobiles as part of Consumer Discretionary, we emphasize the nature of consumer behavior, where purchases are influenced by economic conditions and personal choice rather than necessity. The focus on non-essential goods illustrates the discretionary spending habits of consumers.