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Answer: Corporate finance
## Explanation In the Basel standardized approach for operational risk, different business lines are assigned different beta factors that reflect their relative operational risk exposure. Based on the Basel framework: **Typical beta factors by business line:** - **Corporate finance: 18%** (highest) - Trading and sales: 18% - Retail banking: 12% - Commercial banking: 15% - Payment and settlement: 18% - Agency services: 15% - Asset management: 12% - Retail brokerage: 12% The business units with the **highest beta factors (18%)** are typically: - **Corporate finance** - Trading and sales - Payment and settlement Among the options provided, **Corporate finance** has the highest beta factor of 18%, while retail banking, asset management, and retail brokerage all have lower beta factors of 12%. **Correct Answer: A (Corporate finance)**
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The standardized approach for calculating operational risk capital requirements uses beta factors for a given business line and annual gross income for business lines over a 3-year period. Which of the following business units has the highest beta factor?
A
Corporate finance
B
Retail banking
C
Asset management
D
Retail brokerage
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