Financial Risk Manager Part 1

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Which of the following statements concerning the measurement of operational risk is correct?

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A

Economic capital should be sufficient to cover both expected and worst-case operational risk losses.

B

Loss severity and loss frequency tend to be modeled with lognormal distributions.

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C

Operational loss data available from data vendors tend to be biased towards small losses.

D

The standardized approach used by banks in calculating operational risk capital allows for different beta factors to be assigned to different business lines.

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