A. Security Valuation - Securities traded on national securities exchanges are valued at the last sales price. Short-term securities which mature in 60 days or less are valued at cost, which, when combined with accrued interest receivable, approximates value. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Board of Trustees. Realized gains and losses on security transactions are determined on the specific identification method. Dividend income is recorded on the ex-dividend date.
Interest income is accrued daily.
C. Federal Income Tax Status - No provision for federal income taxes is required since the funds intend to qualify as a regulated investment companies and distribute all of their taxable income to their shareholders. These costs have been deferred and are being amortized on a straight-line basis through July 15, 2002. Those costs have been deferred and are being amortized on a straight-line basis through June 25, 2003. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.