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## Gap Position 

The determination of the interest rate sensitivity or gap position, which is based upon the earlier of the repricing or maturity date of assets, liabilities and derivatives used to manage interest rate risk, by necessity encompasses numerous assumptions. 

The gap position presented is as at October 31 of each year. It represents the position outstanding at the close of the business day and may change significantly in subsequent periods based upon customer preferences and the application of BMOGLYPH<213>s asset and liability management policies. 

The assumptions for 2002 were as follows: 

## Assets 

Fixed term assets such as residential mortgages and consumer loans are reported using scheduled repayments and estimated prepayments based upon historical behaviour. 

Trading assets are reported in the 0 to 3 months category. 

Fixed rate non-maturity assets and non-interest bearing non-maturity assets are reported based upon historical balance behaviour. 

na — not applicable 

## Deposit s/Liabilities 

I nterest bearing non-maturity deposits on which interest rates have historically moved in reference to a specific interest rate basis, such as prime, and on which rates are above the minimum rate committed, are reported as interest sensitive in the 0 to 3 months category. Such deposits may be s ensitive to declining rates only to the extent of the minimum interest rate committed. When they no longer demonstrate correlation with market interest rate movements, they are reported in time periods based upon expected balance behaviour. 

Term deposits and investment certificates are reported based upon scheduled maturity and estimated redemption based upon historical behaviour. 

Fixed rate non-maturity liabilities and non-interest bearing non-maturity liabilities are reported based upon historical account balance behaviour. 

## Cap ital 

Common ShareholdersGLYPH<213> Equity is reported as non-interest sensitive. 

## Yields 

Yields are based upon the contractual interest rate in effect for the assets or liabilities on Oct ober 31, 2002. 

