From my experiments with the security questions:
Security Questions are not case sensitive. So "London" is the same as "london".
Indeed it's possible to add a words with unicode characters, e.g. greek words and most likely in other languages, spaces, dashes etc.
But the system will take in consideration any accents in the words.
When answering the security questions, you need to write the exact same word/phrase as it was typed - with the only exception of the upper/lower case.
So for example the greek word "Αθήνα" will be different than "Αθηνα", while the "ΑΘΗΝΑ Ελλάδα" will be the same as "αθηνα ελλάδα"
The above are what I have found out by experimenting with my security questions. Unfortunately, I searched and couldn't find any reliable sources to cite. It seems that there is nowhere this kind of information.
The only reference I managed to find is here:
So, I decided to call Apple Support and ask. The support representative confirmed to me that security questions are case insensitive, I can type in greek letters and that accents are considered.