Answer: II and III only

## Explanation **Correct Answer: B (II and III only)** Let's analyze 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 of the institution. **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. These are complementary tools, not mutually exclusive alternatives. **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 outcomes. Therefore, statements II and III are not accurate.

Author: LeetQuiz .