According to the implied capital model, operational risk capital is estimated as:

According to the implied capital model, operational risk capital is estimated as:
A . Operational risk capital held by similar firms, appropriately scaled
B . Total capital less market risk capital less credit risk capital
C . Capitalimplied from known risk premiums and the firm’s earnings
D . Total capital based on the capital asset pricing model

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Answer: B

Explanation:

Operational risk capital estimated using the implied capital model is merely the capital that is not attributable to market or credit risk. Therefore Choice ‘b’ is the correct answer. All other responses are incorrect.