8010 Exam Dumps | The standalone economic capital estimates for the three uncorrelated business units of a bank are $100,

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PRMIA.8010.v2022-06-27.q87
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Question 50/87

The standalone economic capital estimates for the three uncorrelated business units of a bank are $100, $200 and $150 respectively. Whatis the combined economic capital for the bank?

A. 269

B. 72500

C. 21

D. 450

Correct Answer: A

Explanation
Since the business units are uncorrelated, we can get the combined EC as equal to the square root of the sum of the squares of the individual EC estimates.Therefore Choice 'a' is the correct answer.
[=SQRT(100^2+200^2+150^2)]

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