CFA L1 2027

V5 Module 9 Errata: Industry and Competitive Analysis

Volume 5 · Equity Investments

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3 independently reviewed issues3 issues explained5 min read

Quizara produced this analysis independently. It is not an official CFA Institute errata notice, and inclusion here must not be read as CFA Institute confirmation, endorsement, or approval.

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1. Question Set 3 Rejects Consumer Expenditure as a Possible Top-Down Input

Curriculum location: Industry Survey, Question Set 3, Question 1, p. 360.

"C. Estimated consumer expenditure on specific goods or services over a specific period may be used in a top-down approach to estimating industry size."

"C is incorrect because the basis for measuring industry size is total revenue, not customer spending."

The curriculum earlier explains that top-down industry sizing may use government retail-sales data. Option C says consumer expenditure may be used; it does not claim that unadjusted spending always equals industry revenue. Appropriately scoped expenditure is a valid demand-side input, although analysts may need to adjust for industry boundaries, imports, taxes, distribution margins, or business purchases. BEA input-output accounts explicitly bridge personal-consumption categories to commodity composition and distinguish purchasers' prices from producers' prices. The intended option B also allows government, consultant, or industry data as top-down inputs. Because both B and C are defensible, the printed rationale does not leave a unique answer.

Correct reading: Total industry revenue is the target measure. Appropriately scoped consumer-expenditure data may be used as a top-down input, but it must be reconciled to the industry's product, customer, geographic, and price boundaries.

A candidate could reject a valid top-down method or lose credit for selecting a defensible option.

2. Example 20 Assigns Patent Grants to Medicines Regulators

Curriculum location: Porter's Five Forces and the PESTLE Framework, Example 20, p. 374.

"While the FDA and EMA approval processes differ, both are focused on the highest health and safety standards for new medications when granting intellectual property protection, such as patents."

This sentence conflates medicine regulation with patent administration. The FDA reviews and approves drugs; EMA conducts scientific evaluation in the European Union's centralised procedure, after which the European Commission makes the legally binding marketing-authorisation decision. Patent offices—not the FDA or EMA—grant patents.

Correct reading: Medicines regulators assess safety, efficacy, and quality under their regulatory frameworks. Patent offices separately grant patents.

A candidate who merges approval and patent protection can misclassify pharmaceutical entry barriers and their duration in a PESTLE or competitive analysis.

3. Question Set 4 Gives Licensing Requirements a Fixed Duration

Curriculum location: Porter's Five Forces and the PESTLE Framework, Question Set 4, Question 1, p. 376.

"1. Which of the following represents the prevention of the threat to industry entrants for an indefinite period?"

"C is correct because the existence of proprietary technology can prevent the threat of entry only as long as other potential market participants fail to replicate a company’s technology."

"B is incorrect because licensing requirements provide a competitive advantage for a specific period of time."

The solution confuses the duration of an individual credential with the duration of the licensing barrier. The curriculum's earlier entry-barriers discussion identifies restrictive licensing requirements as entry prevention and singles out patents—not licensing requirements—as temporary. A licensing regime may be fixed-term, renewable, or open-ended; proprietary technology likewise remains protective only while rivals cannot replicate or lawfully obtain it. The option gives no term or nonrenewal condition, so B cannot be excluded on duration alone.

Correct reading: Patent protection has a legally limited term. Licensing requirements may be fixed-term, renewable, or open-ended depending on the regime, while proprietary technology remains a barrier only while competitors cannot replicate or obtain it. As printed, the question has no unique answer.

A candidate can be marked wrong for a defensible B selection and learn a false universal rule about regulatory entry barriers.

Complete Module 9 Errata Index

Scope: Module 9, pp. 337–382 (printed page numbers).

What this review covers. Errors in the printed curriculum that would change a candidate's answer or understanding: wrong numbers, wrong formulas, reversed logic, and statements that contradict the module's own data. It does not list spelling mistakes, equation-numbering slips, or wording that is loose but defensible.

The table below lists all high-value, objectively confirmed curriculum errors covered by this article, including eligible errors in printed Practice Problems and their solutions. Repeated instances of the same defect are consolidated into one row. Import-only defects, question errors not printed in the module source, disputed or reasonably defensible claims, and low-value editorial corrections such as typos or numbering and cross-reference errors are outside scope.

TopicCurriculum locationConfirmed curriculum errorCorrected reading
Industry Surveyp. 360, Question Set 3 Q1Consumer expenditure is categorically rejected as a top-down input, leaving two defensible options.Scoped consumer-expenditure data may inform a top-down estimate after boundary adjustments.
Porter's Five Forces and the PESTLE Frameworkp. 374, Example 20FDA and EMA are described as granting patent protection.Medicines regulators handle regulatory assessment; patent offices separately grant patents.
Porter's Five Forces and the PESTLE Frameworkp. 376, Question Set 4 Q1Licensing requirements are treated as having an inherent fixed duration, leaving two defensible options.Licensing barriers have regime-specific duration; the question needs a term condition to make C unique.

References

This article is an independent candidate-focused analysis of confirmed errors in the CFA Level I 2027 Curriculum, Volume 5 Equity Investments, Module 9 Industry and Competitive Analysis. It is not an official CFA Institute errata notice, and inclusion here must not be read as CFA Institute confirmation, endorsement, or approval.