Which of the following approaches to operational risk management can differentiate between high-frequency, low-severity (HFLS) and low-frequency, high-severity (LFHS) events?
　　A. Top-down approach.
　　B. Bottom-up approach.
　　C. Both the top-down approach and bottom-up approach.
　　D. Neither the top-down approach nor the bottom-up approach.
　　Answer:B
　　The bottom-up approach analyzes risk in individual processes, which can distinguish between HFLS and LFHS events. The top-down approach to operational risk measurement examines the aggregate impact of internal operational failures by estimating the variance of economic variables that is left unexplained by external macroeconomic factors and does not distinguish between HFLS and LFHS events.