What to know
Identify the rule, formula, or decision criterion before reading the answer choices. CFA Level I distractors often use the right vocabulary with the wrong condition.
Corporate Issuers
Business Models practice questions
Business Models is part of CFA Level I Corporate Issuers. Corporate Issuers questions cover capital budgeting, cost of capital, leverage, working capital, governance, and corporate structure. Use this page to review the controlling ideas, then work through 12 questions with answer explanations and common traps.
Review the worked explanations before moving into adaptive practice. The app version can mix this topic with due reviews and weak related concepts.
Practice this topicHow to practice
Work each item under time pressure, then compare your reasoning with the step-by-step explanation and key takeaway.
Review signal
Missed questions should become scheduled reviews when the error comes from a concept gap, formula setup, or answer-choice trap.
Corporate Issuers
Business Models
A new meal-kit company enters a crowded market with prices set well below cost, planning to raise prices after it builds a large subscriber base and lowers unit costs through scale. This pricing approach is best described as:
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Business Models
An online marketplace connecting freelance designers with small businesses becomes more valuable to each business as more designers join, and more valuable to each designer as more businesses join. This characteristic is best described as:
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Business Models
A hotel company sells its owned properties and shifts to franchising its brand and managing hotels owned by third parties in exchange for fees. Compared with its previous model, the new model most likely results in:
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Business Models
Lumen Health sells its home diagnostic device at a price below production cost and earns high margins on the single-use proprietary test cartridges that the device requires. The cartridges are sold separately as customers need them. This pricing approach is best described as:
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Business Models
A firm's value proposition is best described as:
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Business Models
A pricing model most accurately describes:
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Business Models
Comprehensive business model analysis most likely addresses customers, offerings, channels, and:
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Business Models
An unconventional business model is best described as one that:
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Business Models
When analyzing a complex business model, an analyst should most appropriately:
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Business Models
Digitalization most likely changes a business model by enabling:
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Business Models
A company shifts from one-time hardware sales to subscription-based software. The most accurate analytical implication is that the change may:
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Business Models
A firm that outsources manufacturing but controls design, branding, and customer data has most likely changed its:
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