easy · FRM Part 2 Operational Risk
Formula-and-meaning check before application in Operational Risk.
Within Operational Risk — Basel Framework, RAROC & Stress Testing, which statement correctly describes Economic capital?
- internal estimate of capital needed to absorb unexpected losses at a target solvency level
- minimum capital required under applicable supervisory rules
- common-equity buffer above minimum requirements that constrains distributions when depleted
- evaluation of capital adequacy under adverse scenarios
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