NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniEnhanced Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940 as a newly
organized, non- diversified, closed-end management investment company. These unaudited financial statements
reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal recurring nature. The Fund determines and makes
available for publication the net asset value of its Common Stock on a weekly basis. The Fund's Common Stock
is listed on the New York Stock Exchange under the symbol MEN. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily in the over-the-counter markets and are
valued at the last available bid price in the over-the-counter market or on the basis of yield equivalents as
obtained by the Fund's pricing service from one or more dealers that make markets in the securities. Financial
futures contracts and options thereon, which are traded on exchanges, are valued at their closing prices as of the
close of such exchanges. Options, which are traded on exchanges, are valued at their last sale price as of the
close of such exchanges or, lacking any sales, at the last available bid price. Short-term investments with a
remaining maturity of sixty days or less are valued at amortized cost, which approximates market value. Securities
and assets 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 Directors of the Fund.
(b) Derivative financial instruments--The Fund may engage in various portfolio strategies to seek to increase its
return by hedging its portfolio against adverse movements in the debt markets. Losses may arise due to changes
in the value of the contract or if the counterparty does not perform under