FRM II-or9
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FRM II-or9

Postby » Sat Oct 04, 2014 4:22 am

Which of the following sources of model risk results from making a mistake in implementing the model?
I. Implementation risk.
II. Calibration error.
III. Programming errors.
IV. Data problems.
A) I, II, and III only.
B) I, III, and IV only.
C) II and III only.
D) III and IV only.
Your answer: B was incorrect. The correct answer was C) II and III only.

I cant understand how they derive this answer. From what i have read only Implementation risk is correct

Finance Junkie
Posts: 944
Joined: Wed Apr 09, 2014 6:28 am

FRM II-or9

Postby edupristine » Mon Oct 06, 2014 4:55 am

1) Calibration and programming errors are mistakes.
2) Implementation Risk occurs basically because of incorrect user defined inputs to the model.

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