Fall 2018 Q25

Staff_J1

Hello,

I am just having trouble calculating the growth above 20% for the Component A for Operational Risk.

In the examiner report it mentions 2.5% x (2.5% x Growth above 20%). The growth is 25% so there would be a 5% growth. But just doing the 5% does not lead to the correct solution.

Thank you

graham

Here's what I get using growth = 25%