The Fundamental Review of the Trading Book (FRTB) is a regulatory framework that was introduced by the Basel Committee on Banking Supervision (BCBS) to address the shortcomings of the previous market risk framework. The FRTB aims to enhance the sensitivity of capital requirements to the risks in the trading book. Under this framework, the instruments in the trading book are subject to market risk capital. Market risk capital is the capital that banks are required to hold to cover potential losses from adverse movements in market prices. It is calculated based on the market risk of the instruments in the trading book, which includes risks such as interest rate risk, equity risk, foreign exchange risk, and commodity risk. The FRTB introduces more risk-sensitive approaches to calculate market risk capital, including the standardized approach (SA) and the internal models approach (IMA). These approaches aim to better capture the risks in the trading book and ensure that banks hold sufficient capital to absorb potential losses.

Choice A is incorrect. While credit risk capital is a significant component of the overall risk capital for a bank, it does not specifically apply to the instruments in the trading book under FRTB. The FRTB primarily focuses on market risk capital requirements.

Choice C is incorrect. Operational risk capital refers to the capital that banks must hold to cover potential losses from failures in their internal processes, systems and people, or from external events. This type of risk capital does not directly apply to the instruments in the trading book under FRTB.

Choice D is incorrect. While banks are subject to both credit and market risk capital generally, under the FRTB framework specifically, instruments assigned to the trading book are primarily capitalized for market risk rather than both combined.