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Using the definitions used by JPMorgan Chase in their annual report, which of the following exposure types would be considered as a non-trading risk exposure?
I . Short term equity investments
II . Loans held to maturity
III . Mortgage servicing rights
IV . Derivatives used to manage asset/liability exposure.
Suggested Answer: D
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30 comments · newest first
JA
Jaime
6 months ago
I see the point for D). Non-trading risks are crucial for stability.
MA
Margot
6 months ago
I feel B) is safer. Short-term investments are definitely trading.
LA
Latrice
6 months ago
I’m not sure about IV. Derivatives feel more trading-related.
SH
Sharen
7 months ago
I lean towards D) II, III, and IV. All seem non-trading to me.
AN
Annice
7 months ago
I think it's B) II and III. Loans and mortgage rights fit non-trading.
VE
Venita
7 months ago
Totally agree with B, II and III make sense!
MI
Mitsue
8 months ago
Loans held to maturity are definitely non-trading.
LO
Lon
8 months ago
Wait, are derivatives really non-trading? That seems off.
BE
Bev
8 months ago
D) II, III, and IV for sure. Gotta love those non-trading risks, am I right? Keeps the bankers on their toes.
LE
Leota
8 months ago
Haha, I bet the answer is B) II and III. Who even uses short-term equity investments these days? That's so 2008.
MA
Mable
8 months ago
C) III and IV sounds right. Mortgage servicing rights and derivatives for ALM are classic examples of non-trading exposures.
AR
Arlette
8 months ago
Hmm, I'm leaning towards D) II, III, and IV. Derivatives used for asset/liability management are definitely non-trading risks.
KI
Kimberlie
9 months ago
I'm pretty sure it's B) II and III. Loans held to maturity and mortgage servicing rights seem like non-trading risks to me.
QU
Quinn
9 months ago
I’m confused about mortgage servicing rights; I thought they could be both, but I guess they might fit in non-trading?
PA
Paris
9 months ago
I practiced a similar question where loans were definitely classified as non-trading, so I’m leaning towards option D.
EM
Emeline
9 months ago
I'm not entirely sure, but I feel like derivatives are usually considered trading risks, so that might rule out IV.
CA
Carri
9 months ago
I've got a strategy - I'll eliminate the options that are clearly trading risks, then focus on the remaining ones that fit the non-trading definition.
LA
Lavonda
9 months ago
Okay, let's think this through. Loans held to maturity and mortgage servicing rights sound like they could be non-trading risks, but I'm not sure about the others.
JU
Judy
10 months ago
I think it's D, all of them except I.
GW
Gwenn
10 months ago
I think I remember that non-trading risk exposures are more related to long-term investments, so maybe II and III?
LO
Lourdes
10 months ago
Definitely II and III are non-trading risks.
OD
Odette
10 months ago
I agree with D) too. They all represent long-term risks.
KA
Katina
10 months ago
I'm a bit confused on the difference between trading and non-trading risks. Can someone clarify that for me before I try to answer?
EU
Eugene
11 months ago
Hmm, this seems tricky. I'll need to carefully review the options and match them to the non-trading risk exposure definition.
ET
Ettie
11 months ago
I think I can handle this one. I just need to remember the definitions JPMorgan uses for trading and non-trading risks.
ME
Merlyn
5 months ago
It’s tricky! I need to review those definitions again.
LE
Lenny
5 months ago
I think C) III and IV could be the answer too.
JE
Jestine
6 months ago
What about A) I and II? Seems plausible.
JU
Juliann
6 months ago
I’m leaning towards D) II, III, and IV.
LE
Leonardo
6 months ago
I believe it's B) II and III.