The correct answer is The code near your cursor in the currently open file which Copilot uses as the primary local context.

Copilot generates inline suggestions from the immediate code around where you are typing. It works within a limited context window in your editor and prioritizes the surrounding lines, the current function or block, and nearby symbols in the active file. Comments can guide the direction of a suggestion and naming patterns can help, yet the strongest signal remains the local code that Copilot can see at suggestion time.

If helper functions or variables you wrote earlier in the file fall outside what the model can currently attend to, they may be missed. Keeping relevant code close together, adding concise comments near where you want help, and briefly restating key variables or signatures in the active area can improve what Copilot understands.

The entire repository because Copilot scans every file and builds suggestions from project wide analysis is incorrect because Copilot does not read every file in your repository for each inline suggestion. It primarily relies on the active editor context and may not perform a full project analysis during completion time.

The natural language comment or prompt you type because it alone provides all necessary details is incorrect because comments and prompts are helpful guidance but they do not replace the stronger signal from the surrounding code in the active file.

The naming style of your identifiers since Copilot favors variable and function names over code content is incorrect because naming patterns can influence suggestions modestly, yet the actual code and logic near the insertion point matter much more.

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