[ 2009 FRM Sample Exam ] Operational and Integrated risk management Q11 management, investment, describes, following, including

Abey

 

11. One of the requirements while using IRB is full integration of the internal model into the overall management information systems of the institution and in the management of the banking book equity portfolio. Which of the following best describes this requirement?

A. Establishing investment hurdle rates and evaluating alternative investments.

B. Measuring and assessing equity portfolio performance (including the risk-adjusted performance).

C. Allocating economic capital to equity holdings and evaluating overall capital adequacy as required under Pillar 2.

D. All of the above.

Abey

 

Correct answer is Dfficeffice" />

A is incorrect as 'd' is the best choice.

B is incorrect as 'd' is the best choice.

C is incorrect as 'd' is the best choice.

D is correct, as it is the best choice as per Basel II.