NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2002 2001 Notional amount Notional amount Cr edit Risk- Credit Risk- Customer Replace- risk weighted Customer Replace- risk weighted trading ALM Total ment cost equivalen t balance trading ALM Total ment cost equivalent balance Interest Rate Contracts Over-the-counter Swaps $ 697,505 $ 50,494 $ 747,999 $ 15,195 $ 18,768 $ 4,675 $ 1,243,277 $ 41,336  $ 1,284,613 $ 13,649 $ 16,978 $ 4,793  Forward rate agreements 226,140 — 226,140 211 244 49 384,064 — 384,064 326 375 82 Purchased options 95,860 1,460 97,320 2,470 2,939 774 91,628 985 92,613 2,098 2,532 724 Written options 118,067 — 118,067 — — — 101,177 5 101,182 — — — 1,137,572 51,954 1,189,526 17,876 21,951 5,498 1,820,146 42,326 1,862,472 16,073 19,885 5,599 Exchange traded Futures 158,203 — 158,203 — — — 158,613  — 158,613  — — — Purchased options 62,329 — 62,329 — — — 61,958  — 61,958  — — — Written options 54,552 — 54,552 — — — 56,202  — 56,202  — — — 275,084 — 275,084 — — — 276,773  — 276,773  — — — Total Interest Rate Contracts 1,412,656 51,954 1,464,610 17,876 21,951 5,498 2,096,919 42,326 2,139,245 16,073 19,885 5,599 Foreign Exchange Contracts Over-the-counter Cross-currency swaps 18,348 — 18,348 287 1,324 461 18,133  — 18,133 180 1,210 451 Cross-currency interest rate swaps 39,156 5,511 44,667 817 2,845 551 45,117 6,867 51,984 996 3,202 712 Forward foreign  exchange contracts 143,396 8,050 151,446 1,493 3,094 868 157,965 2,052 160,017 1,865 4,238 1,218 Purchased options 87,766 — 87,766 775 1,694 406 59,589  — 59,589 603 1,235 336 Written options 93,413 — 93,413 — — — 72,549  — 72,549  — — — 382,079 13,561 395,640 3,372 8,957 2,286 353,353 8,919 362,272 3,644 9,885 2,717 Exchange traded Futures 663 — 663 — — — 515 1 516 — — — Purchased options 2,934 — 2,934 — — — 2,856  — 2,856  — — — Written options 841 — 841 — — — 1,660  — 1,660  — — — 4,438 — 4,438 — — — 5,031 1 5,032 — — — Total Foreign  Exchange Contracts 386,517 13,561 400,078 3,372 8,957 2,286 358,384 8,920 367,304 3,644 9,885 2,717 Commodity Contracts Over-the-counter Swaps 16,956 — 16,956 860 2,829 1,230 17,159  — 17,159 1,128 3,275 1,550 Purchased options 10,262 — 10,262 738 2,731 1,125 14,009  — 14,009 2,518 3,976 1,838 Written options 9,767 — 9,767 — — — 13,850  — 13,850  — — — 36,985 — 36,985 1,598 5,560 2,355 45,018  — 45,018 3,646 7,251 3,388 Exchange traded Futures 891 — 891 — — — 643  — 643  — — — Purchased options 432 — 432 — — — 306  — 306  — — — Written options 536 — 536 — — — 561  — 561  — — — 1,859 — 1,859 — — — 1,510  — 1,510  — — — Total Commodity Contracts 38,844 — 38,844 1,598 5,560 2,355 46,528  — 46,528 3,646 7,251 3,388 Equity Contracts Over-the-counter 12,003 114 12,117 277 1,021 425 8,200 182 8,382 173 620 284 Exchange traded 1,692 — 1,692 — — — 1,794  — 1,794  — — — Total Equity Contracts 13,695 114 13,809 277 1,021 425 9,994 182 10,176 173 620 284 Credit Contracts  — Over-the-counter 1,691 399 (1) 2,090 6 126 26 32 502 (1) 534 — 3 1 Subtotal 1,853,403 66,028 1,919,431 23,129 37,615 10,590 2,511,857 51,930 2,563,787 23,536 37,644 11,989 Impact of Master  Netting Agreements na na na (12,105) (17,714) (4,596) na na na (11,563) (22,123) (6,281) Total $ 1,853,403 $ 66,028 $ 1,919,431 $ 11,024 $ 19,901 $ 5,994 $ 2,511,857 $ 51,930 $ 2,563,787 $ 11,973 $ 15,521 $ 5,708 Included in the notional amounts is $743 as at October 31, 2002 and $2,520 as at October 31, 2001 related to the Managed Futures Certificates of Deposit Program. Risk exposures represented by the assets in this program are traded on behalf of customers with all gains and losses accruing to them. Replacement costs disclosed in the table above represent the net of the asset and liability to a  specific counterparty when we have a legally enforceable right to offset the amount owed to us and the amount owed by us and we intend either to settle on a net basis or to realize the asset and settle the liability simultaneously. Credit contracts were previously included with equity contracts. We excluded exchange traded instruments with unrealized gains of nil as at October 31, 2002 and  nil as at October 31, 2001 because we are not required to provide capital against these instruments.  Incl uded in the total are unrealized gains on ALM derivatives which we include in the Consolidated  Balance Sheet on an accrual rather than market basis. The excess of market value over book value for  these items was $774 as at October 31, 2002 and $483 as at October 31, 2001. (1)  Credit contracts entered into for hedging purposes are accounted for as off-balance sheet financial guar- a ntees. The replacement cost of these contracts was less than $1 million as at October 31, 2002 and 2001. na — not applicable 88 BMO FINANCIAL GROUP ANNUAL REPORT 2002