Which of the following is not a permitted approach under Basel II for calculating operational riskcapital

Which of the following is not a permitted approach under Basel II for calculating operational riskcapital
A . the internal measurement approach
B . the basic indicator approach
C . the standardized approach
D . the advanced measurement approach

View Answer

Answer: A

Explanation:

The Basel II framework allows the use of the basic indicator approach, the standardized approach and the advanced measurement approaches for operational risk. There is no approach called the ‘internal measurement approach’ permitted for operational risk. Choice ‘a’ is therefore the correct answer.