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GARP 2016-FRR Exam - Topic 4 Question 13 Discussion

Actual exam question for GARP's 2016-FRR exam
Question #: 13
Topic #: 4
[All 2016-FRR Questions]

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.

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Suggested Answer: D

by Georgeanna at Nov 21, 2025, 07:17 AM

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Mitsue
12 hours ago
Loans held to maturity are definitely non-trading.
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Lon
6 days ago
Wait, are derivatives really non-trading? That seems off.
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Bev
11 days ago
D) II, III, and IV for sure. Gotta love those non-trading risks, am I right? Keeps the bankers on their toes.
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Leota
16 days ago
Haha, I bet the answer is B) II and III. Who even uses short-term equity investments these days? That's so 2008.
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Mable
21 days ago
C) III and IV sounds right. Mortgage servicing rights and derivatives for ALM are classic examples of non-trading exposures.
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Arlette
26 days ago
Hmm, I'm leaning towards D) II, III, and IV. Derivatives used for asset/liability management are definitely non-trading risks.
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Kimberlie
1 month 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.
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Quinn
1 month ago
I’m confused about mortgage servicing rights; I thought they could be both, but I guess they might fit in non-trading?
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Paris
1 month ago
I practiced a similar question where loans were definitely classified as non-trading, so I’m leaning towards option D.
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Emeline
2 months ago
I'm not entirely sure, but I feel like derivatives are usually considered trading risks, so that might rule out IV.
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Carri
2 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.
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Lavonda
2 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.
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Judy
2 months ago
I think it's D, all of them except I.
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Gwenn
2 months ago
I think I remember that non-trading risk exposures are more related to long-term investments, so maybe II and III?
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Lourdes
2 months ago
Definitely II and III are non-trading risks.
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Odette
3 months ago
I agree with D) too. They all represent long-term risks.
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Katina
3 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?
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Eugene
3 months ago
Hmm, this seems tricky. I'll need to carefully review the options and match them to the non-trading risk exposure definition.
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Ettie
3 months ago
I think I can handle this one. I just need to remember the definitions JPMorgan uses for trading and non-trading risks.
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