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
Here's the deal — you're right to pick annual full validation with more frequent monitoring between full validations because SR 11-7 expects high-risk, material models to be validated at least annually and monitored continuously between cycles. Five-year cycles, owner-request-only revalidation, or saying SR 11-7 leaves frequency entirely to judgment are too weak.
Full Explanation
The correct choice is annual full validation with more frequent monitoring between full validations because SR 11-7 recommends high-risk material models be validated at least annually, with ongoing performance monitoring between cycles, while frequency remains risk-based. Five-year or major-change-only validation is too infrequent for material models. Revalidation only on model-owner request is insufficient for independent validation. Saying SR 11-7 leaves frequency entirely to judgment misreads the guidance, which ties frequency to materiality.