Which one of the four following positions would most likely be not included in that book?

The market risk manager of SigmaBank is concerned with the value of the assets in the bank’s trading book.

Which one of the four following positions would most likely be not included in that book?
A . 10,000 shares of IBM worth $10,000,000.
B . $10,000,000 loan to IBM worth $9,800,000.
C . $10,000,000 bond issued by IBM worth $11,000,000.
D . 300,000 options on IBM shares worth $10,000,000.

View Answer

Answer: B

Explanation:

A $10,000,000 loan to IBM worth $9,800,000 would most likely not be included in the trading book. Loans held to maturity are generally part of the banking book rather than the trading book, which typically includes assets intended for trading and short-term profit.