easy · FRM Part 2 Operational Risk
What is the relationship between the Business Indicator (BI) and the Business Indicator Component (BIC)?
- The BIC is calculated by applying marginal coefficients to the BI.
- They are identical terms used interchangeably in Basel III
- The BI is always exactly equal to 12% of the resulting BIC figure
- The BIC is simply the raw, unweighted sum of the three BI component values
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