14. [Derivatives and hedges] The Resh Company borrows using variable-rate debt and invests the proceeds in fixed-rate mort- gages. On January 1, 2000, the company entered into an interest rate swap maturing December 31, 2001 with a notional amount of $10 million The company agreed to pay a fixed rate of 6% and receive a variable rate indexed to the U.S. prime rate. The fair value of the swap was zero at inception. The variable rate paid was 7% in 2000. That rate dropped to 5% on December 31, 2000 and stayed at that level through EXHIBIT 16P-2. HOLMEN Currency Risk Management Panel A: Transaction Exposure, December 31, 2001 (MSEK) Hedged Amounts Currency Annual Cash Flow 2002 2003 5.500 4,350 2,250 1,450 1,250 700 Other 1,350 900 350 Total 8,300 6,500 3,300 Source Holmen 2001 annual report Panel B. Currency Exchange Rates Date SEK/ SEK/ 12/31/99 8.46 13.78 12/31/00 9.99 14.06 6/30/01 12.78 15.35 12/31/01 11.78 15.25 Source. Computed from Bloomberg data n