A
Acadi
Fi
Courses
Knowledge Hub
Community
Practice
Pricing
About
Search
⌘K
Question Bank
/
FRM
/
Part II
/
Operational Risk
Operational Risk
Medium
The Basel Committee replaced the Advanced Measurement Approach (AMA) with the Standardized Measurement Approach (SMA) for operational risk capital. The primary motivation for this change was:
A
Excessive variability in AMA capital estimates across comparable banks, undermining comparability and trust in the framework
B
AMA models consistently overestimated operational risk capital, making banks uncompetitive
C
The SMA produces lower capital requirements, incentivizing banks to adopt it willingly
D
External loss data proved to be completely unreliable for operational risk modeling
Select an answer to continue
Tags
#ama
#sma
#operational-risk
#capital-variability
#basel-reform
More Operational Risk questions
Start full Part II quiz
FRM Part II — Operational Risk Practice Question | AcadiFi | AcadiFi