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

• A.the advanced measurement approach
• B.the basic indicator approach
• C.the internal measurement approach
• D.the standardized approach

For a hypotherical UoM, the number of losses in two non-overlapping datasets is 24 and 32 respectively. The Pareto tail parameters for the two datasets calculated using the maximum likelihood estimation method are 2 and 3. What is an estimate of the tail parameter of the combined dataset?

• A.3
• B.2.57
• C.2.23
• D.Cannot be determined

Loss provisioning is intended to cover:

• A.Losses in excess of unexpected losses
• B.Both expected and unexpected losses
• C.Unexpected losses
• D.Expected losses

Which of the following is not an event of default covered in the ISDA Master Agreement?
I). failure to pay or deliver
II). credit support default
III). merger without assumption
IV). Bankruptcy

• A.II and III
• B.I
• C.IV
• D.All are considered events of default

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.Aggregation risk, from selecting an incorrect value of estimated correlations between different operational risk estimates
• B.Choice of incorrect parameters for loss severity distributions
• C.Insufficient number of simulations when building the loss distribution
• D.Choice of an incorrect distribution for loss event frequencies