Answer: II and III only

## Explanation **Correct Answer: B (II and III only)** **Analysis of each statement:** **I. Senior management has ultimate oversight responsibility and accountability for an entire institution.** - **ACCURATE**: Senior management is responsible for day-to-day operations and oversight, while the board provides strategic oversight. **II. Senior management should use scenario analysis, not stress testing, to evaluate an institution's risk decisions.** - **NOT ACCURATE**: Senior management should use both scenario analysis AND stress testing to evaluate risk decisions. Stress testing is a critical tool for risk management. **III. The board of directors has responsibility for implementing authorized stress testing activities.** - **NOT ACCURATE**: The board of directors has oversight responsibility and approves stress testing frameworks, but implementation is typically the responsibility of senior management and risk management teams. **IV. The board of directors can change an institution's capital levels and exposures following a review of stress test results.** - **ACCURATE**: The board has the authority to make strategic decisions about capital allocation and risk exposures based on stress test results. Therefore, statements II and III are not accurate, making option B the correct choice.

Author: LeetQuiz Editorial Team