Spring 2019 #13
Hi, In the exam question, it ask us to propose a materiality standard. I wonder why the quiz answer said sample 5&6 from the exam report is invalid. Thanks.
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Hi, In the exam question, it ask us to propose a materiality standard. I wonder why the quiz answer said sample 5&6 from the exam report is invalid. Thanks.
Comments
I suspect they did not find the standards offered in 5&6 to be sufficiently substantiated upon reconsideration, and rescinded these two options. In samples 1 thru 4, when an action level is given in connection with the standard, the answer goes on to outline the actual standard, which is generally related to a level of adjusted capital that would effect that action level. This outlining was not done in 5&6 and I think they did not like that.
for part c, the exam report doesn't consider operational risk...for all the RBC calculations, should I always include operational risk by *1.03?
Yes, in a case like part c, where the final RBC charge is needed, it should be calculated inclusive of operational risk.