Ultimate access to all questions.
Explanation:
Under the Basel III Standardized Measurement Approach (SMA) for operational risk, the Business Indicator (BI) is calculated as the sum of three components, each averaged over the last three financial years (here, 20X7, 20X8, and 20X9):
Q.33 The following information has been extracted from the P&L of a European bank over a 3-year period:
| Year (ended) | 20X6 | 20X7 | 20X8 | 20X9 |
|---|---|---|---|---|
| Interest, leases and dividends | €950 million | €1.3 billion | €1.8 billion | €1.6 billion |
| Services | €1.6 billion | €2.2 billion | €2.6 billion | €1.8 billion |
| Financial (Net Profit/Loss on the trading book) | €500 million | €1.1 billion | €1.3 billion | €1.5 billion |
Using the Standardized Measurement Approach, the bank’s Business Indicator (BI) for the year ended 31 Dec 20X9 is closest to:
A
€4 billion
B
€5 billion
C
€3.2 billion
D
€500 million
No comments yet.