Fall 2019 #19 - calculation for operational risk
I don't understand the calculation for operational risk at all. Some help please?
1. What is the cap = 30% * (I + M + C) = 10,884? What section is this in the wiki?
2. What is the calculation for component #1? Where is the 8.5% from?
3. What is component #5?
4. At the end, what is the comparison between min(10,884 ; 5,187) for? What is 5,187?
Comments
Have you read the wiki yet? These are basic MCT calculations from chapter 7