Explanation

Option A is correct because proper documentation of all steps and assumptions during model development is a fundamental best practice in model risk management. This documentation:

• Provides transparency and auditability
• Helps identify potential sources of model risk
• Facilitates model validation and review processes
• Ensures reproducibility of results
• Supports ongoing model maintenance and updates

Option B is incorrect because sensitivity analysis for robustness and stability should indeed be performed and repeated periodically. Regular sensitivity testing is essential to:

• Assess how model outputs change with variations in inputs
• Identify model weaknesses and limitations
• Ensure model stability over time
• Validate that the model remains appropriate for its intended use

Model risk management requires comprehensive documentation, regular validation, and ongoing monitoring to ensure models remain fit for purpose and risks are properly managed.