In the context of a U.S. bank's capital planning framework, which adheres to the Federal Reserve guidelines, consider the procedures and assumptions utilized for modeling operational losses. Which among the following would an external auditor most likely identify as the most appropriate approach?

Exam-Like

Assuming a high positive correlation between operational loss severity and equity index movements during normal market conditions

6.9%

Using a net charge-off model to predict shorter-term credit losses and a roll-rate model to predict losses over a longer time horizon

3.4%

Modeling operational losses by projecting an annual loss estimate and then evenly distributing the losses across the four quarters of the year

17.2%

Incorporating forward-looking factors and idiosyncratic risk exposures into stressed operational loss estimates

72.4%

Financial Risk Manager Part 2