Which of the Following Statements Is True

question 37

Multiple Choice

Which of the following statements is true?

• A)Operational risk is not considered to be important in FI's and thus regulatory authorities assume that it is captured by an FI's general risk management framework.
• B)Operational risk is considered to be important and thus the Basel Committee requires FI's to provision against their operational risk exposures.
• C)Operational risk is considered to be important and thus the Basel Committee requires FI's to allocate capital against their operational risk exposures.
• D)Operational risk is considered to be important; however, regulators are aware that FI's have well-functioning operational risk defence mechanisms in place.

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Definitions:

Acquisition

Acquiring management of a different company through the acquisition of its stocks or possessions.

Accounting

The systematic process of recording, analyzing, summarizing, and reporting the financial transactions of a business or individual.

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as materials and labor.

Indirect Costs

Costs that are not directly traceable to a product, process, or activity but are necessary for the business’s overall operations, such as utilities or administrative salaries.