Manchester Holdings, a large conglomerate, is implementing the enterprise risk management (ERM) framework to quantify and manage the risk-return trade-off for the entire firm. Which of the following statements about the ERM framework is/are correct?

I: The performance of each business unit should be evaluated on a stand-alone basis, and the unit should be allocated more capital if its net income is positive.

II: The ERM framework does not include a bottom-up approach to risk management.

Group of answer choices

Both statements are correct

Statement I only

Statement II only

Both statements are incorrect