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NEW QUESTION: 1
Which of the following is the BEST indicator that an application system's agreed-upon level of service has been met?
A. Bandwidth usage logs
B. CPU utilization reports
C. Transaction response time
D. Security Incident reports
Answer: D
NEW QUESTION: 2
proc sql;
select *
from dictionary.tables;
quit;
A. Option C
B. Option B
C. Option A
D. Option D
Answer: C
NEW QUESTION: 3
For a bank using the advanced measurement approach to measuring operational risk, which of the following brings the greatest 'model risk' to its estimates:
A. Choice of incorrect parameters for loss severity distributions
B. Aggregation risk, from selecting an incorrect value of estimated correlations between different operational risk estimates
C. Insufficient number of simulations when building the loss distribution
D. Choice of an incorrect distribution for loss event frequencies
Answer: B
Explanation:
Explanation
The greatest model risk when calculating operational risk capital comes from incorrect assumptions about correlations between different operational risks for which standalone risk calculations have been made.
Generally, the correlation can be expected to be positive, and would therefore vary between 0 and 1. These two values determine the 'bounds' between which the total operational risk capital would lie, and these bounds are generally quite far apart. Therefore the total value of the operational risk capital is very sensitive to the value chosen for the correlation, and this is the source of the biggest model risk under the AMA.
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