According to the Basel II standards, the advanced measurement approach (AMA) can be used to calculate explicit capital charges to cover operational risk. How many of the following statements are true with respect to this operational risk approach? I: In implementation of the AMA, the one-year 99.9% operational risk VaR is largely driven by low-frequency high-severity risks. II: Loss severity distribution can be estimated from both internal and external data III: External data from vendors should be used to estimate the size of the loss severity distribution without scale adjustment.

Group of answer choices

A) Zero

B) One

C) Three

D) Two