Under SR 11-7, what is the MINIMUM recommended frequency for validating models classified as high risk due to their materiality to the institution?
Select an answer to reveal the explanation.
Short Explanation and Infographic
Here's the deal — b is correct because SR 11-7 recommends that high-risk (material) models receive annual full validation supported by ongoing performance monitoring between validation cycles — though the guidance acknowledges frequency should be commensurate with risk. A is too infrequent for material models.
Full explanation below image
Full Explanation
B is correct because SR 11-7 recommends that high-risk (material) models receive annual full validation supported by ongoing performance monitoring between validation cycles — though the guidance acknowledges frequency should be commensurate with risk. A is too infrequent for material models. C is insufficient for independent validation. D misreads SR 11-7 which does provide guidance on validation frequency aligned to materiality.