[ 2009 FRM Sample Exam ] Operational and Integrated risk management Q2 management, following, Business, elements, control

Abey

 

2. Which of the following elements must be part of an AMA model in order to be certified by the appropriate supervisory authority under Basel II?

i) Internal data

ii) External data

iii) Scenario analysis

iv) Business environment and internal control factors

A. i and ii only

B. I, ii and iv only

C. i, ii, iii and iv

D. iii and iv only

Abey

 

Correct answer is C

A is not correct because is incomplete, the Basel document state clearly that the four elements must be part of  an AMA model to be qualified by the supervisor.

B is not correct because is incomplete, the Basel document state clearly that the four elements must be part of  an AMA model to be qualified by the supervisor.

C is correct. The Basel document state clearly that the four elements must be part of  an AMA model to be qualified by the supervisor.

D is not correct because is incomplete, the Basel document state clearly that the four elements must be part of  an AMA model to be qualified by the supervisor.