(e) Market risk:  19. Financial riskmanagement(continued):  (f) Currency risk: (g) Interest rate risk: 32  Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will  fluctuate because of changes in market rates . The Company’s exposure to interest rate risk  mainly arises from thelong-term bank loan as it is subject to floating market rates of interest. Based on the balance outstanding on December 31, 2014, a one percent point increase  (decrease) in theinterest rate would increase (decrease) interest income by approximately  $195,000 per annum due to significant short term investments in excess of the bank loan  (December 31, 2013- $690,000 increase (decrease) in interest income due to significant short  term investments and no bank loan) .  A 10% strengthening (weakening) of the Canadian dollar against the U.S. dollar would have  increased (decreased) equity andincome and loss by approximately $58,000 as at  December 31, 2014. A similar strengthening (weakening) as at December 31, 2013 would  have increased (decreased) equity andcomprehensive incomeby approximately $9,000. Market risk is the risk that changes in market prices, such as foreign exchange rates will affect  the Company’s income or the value of its holding in financial instruments. The objective of  market risk management is to manage and control market risk exposures within acceptable  parameters, while optimizing the return.  The Company is exposed to currency riskas a result of the translation of Franworks’ US  restaurant dollar sales into Canadian dollars for the purposes of calculating the monthly royalty. The Company’s exposure to foreign currency risk at the reporting date is described below: Expressed in US $  2014  2013  Cash, restricted cash and cashequivalents  $  35  $  4,737  Amounts receivable  374,342  357,598  Provisions  (878,313)  (442,583)  Net exposure in U.S. dollars  $  (503,936)  $  (80,248)  The Company does not utilize financial instruments for spe culative purposes. As at  December  31, 2014 the Company had no foreign exchange contracts. DIVERSIFIED ROYALTY CORP .  Notes toConsolidatedFinancial Statements  (Unaudited)  (Expressed in Canadian dollars)  Year ended December 31, 2014 