**Core Concept**
The femoral sheath is a fascial tube surrounding the femoral vessels and their accompanying lymphatic vessels. It contains three main structures: the femoral artery, femoral vein, and femoral canal. Understanding the anatomy of the femoral sheath is crucial for identifying the correct answer.

**Why the Correct Answer is Right**
The femoral sheath is a fascial tube that encloses the femoral vessels. However, the femoral canal, also known as the superficial inguinal ring, lies outside the femoral sheath. The femoral canal is a small, slit-like structure that allows for the passage of the spermatic cord in males and the round ligament in females. The femoral canal is not contained within the femoral sheath, making it the correct answer.

**Why Each Wrong Option is Incorrect**
* **Option A:** The femoral artery and vein are contained within the femoral sheath, making this option incorrect.
* **Option B:** The femoral canal is the correct answer, not the lymphatic vessels, which are also contained within the femoral sheath.
* **Option C:** The ilioinguinal nerve is not a structure that lies outside the femoral sheath, making this option incorrect.

**Clinical Pearl / High-Yield Fact**
The femoral sheath is a critical anatomical structure to identify during femoral vascular procedures, such as cannulation or angiography. The femoral canal, which lies outside the sheath, can be easily confused with the femoral sheath, highlighting the importance of precise anatomical knowledge.

**Correct Answer: D. Femoral canal.**