COMMANDER RESOURCES LTD.  (An Exploration Stage Company)  Notes to Financial Statements  For the Years Ended December 31, 2012 and 2011  (Expressed in Canadian dollars)  4.  Financial Instruments and Risk Management (Continued)  (c) Credit risk (Continued)  (d) Market risk  iii. Other price risk  (a)  To the extent that payments made or received on the Company’s monetary assets and liabilities  are affected by changes in the prevailing market interest rates, the Company is exposed to interest  rate cash flow risk.  (b)  To the extent that changes in prevailing market rates differ from the interest rate in the Company’s  monetary assets and liabilities, the Company is exposed to interest rate price risk. Interest rate risk consists of two components:  The Company’s cash and cash equivalents consist of cash and term deposits held in bank accounts. Due to  the short-term nature of these financial instruments, fluctuations in market rates do not have a significant  impact on estimated fair values as of December 31, 2012. Future cash flows from interest income on cash and cash equivalents will be affected by interest rate  fluctuations. Given the balance of the term deposit at the year-end, any fluctuations in the interest rate  would lead to an immaterial change in net income and comprehensive income. Foreign currency risk arises primarily as a result of the Company having US dollar denominated cash  balances. The financial position of the Company may vary at the time that a change in foreign currency rate  occurs. For the year ended December 31, 2012, a change in the foreign currency rate by 2% would  increase or decrease exchange loss by $5,429.  Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate  due to changes in market prices, other than those arising from interest rate risk or foreign currency risk.  The Company is exposed to other price risk with respect to its investment in securities. A change in the  fair value by 44% would increase or decrease comprehensive income by $78,165.  There were no changes in the Company's approach to risk management during the year ended December 31, 2012.  - 17 -  Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes  in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price  risk.  The Company’s concentration of credit risk and maximum exposure at December 31, 2012 and 2011 are as follows:  December 31, 2012 December 31, 2011 Cash and cash equivalents $ 523,110 $ 1,175,776 Receivables 5,930 4,698  $  529,040  $  1,180,474 i.  Interest rate risk  ii.  Foreign currency risk 