18,000 transactions are processed by the back office of ABC bank in a year. The probability of a failed transaction is 4% and the expected operational loss given that a transaction has failed is $1000. Assume no variability in LGE and the unexpected loss is $195.95. The gross income generated by these transactions is $58 million.

Calculate the regulatory capital for operational risk under IMA (Internal Measurement Approach). Report the values of key variables including gamma and the required loss variables required for calculating regulatory capital.

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