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.

AI and II

BII and III

CIII and IV

DII, III, and IV

Show Suggested Answer

Suggested Answer: D

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

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Jaime

2 months ago

I see the point for D). Non-trading risks are crucial for stability.

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Margot

2 months ago

I feel B) is safer. Short-term investments are definitely trading.

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Latrice

2 months ago

I’m not sure about IV. Derivatives feel more trading-related.

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Sharen

2 months ago

I lean towards D) II, III, and IV. All seem non-trading to me.

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Annice

2 months ago

I think it's B) II and III. Loans and mortgage rights fit non-trading.

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Venita

2 months ago

Totally agree with B, II and III make sense!

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Mitsue

3 months ago

Loans held to maturity are definitely non-trading.

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Lon

3 months ago

Wait, are derivatives really non-trading? That seems off.

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Bev

3 months 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

4 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.

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Mable

4 months 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

4 months 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

4 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.

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Quinn

4 months 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

4 months 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

5 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

5 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

5 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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