What is one limitation of a magnetic compass?

The limitation of a magnetic compass that is accurately identified is that it provides erratic readings at steeper bank angles. This phenomenon, commonly referred to as "banking errors," occurs because the compass relies on Earth's magnetic field. When the aircraft is banked sharply, the compass card may not settle into the correct heading due to the centrifugal force acting on the liquid inside the compass and the magnetic field's orientation relative to the bank angle. As a result, the compass can exhibit a tendency to indicate an erroneous heading until the aircraft returns to level flight.

In this context, other options are less relevant to the typical performance of a magnetic compass. For instance, the compass does not fail at high altitudes; it continues to function as long as it remains within a range of operational conditions. It can be used in turbulence, but the readings may be more difficult to interpret due to the movement of the aircraft. Moreover, the compass does not have a limitation in terms of daylight; it can operate both during the day and at night as it is designed to respond to magnetic fields rather than being reliant on light. Thus, the key limitation highlighted emphasizes the critical aspects of flight operations concerning aircraft orientation and navigation.