NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
SECURITY TRANSACTIONS AND REVENUE RECOGNITION
Securities transactions are accounted for on the date the securities are purchased or sold (trade date). Dividend
income is recognized on the ex-dividend date, and interest income is recognized on a daily accrual basis. Realized
gains or losses are reported on the basis of identified cost of securities delivered. Bond discounts and premiums
are amortized as required by the Internal Revenue Code of 1986 (the "Code").
FEDERAL INCOME TAXES
Each Master Series of the Master Trust intends to qualify for federal income tax purposes as a partnership. Each
Master Series therefore believes that it will not be subject to any federal income tax on its income and net capital
gains (if any). However, each investor in a Master Series will be taxable on its allocable share of the partnership's
income. The determination of such share will be made in accordance with the Code. It is intended that each
Master Series' assets, income and allocations will be managed in such a way that a regulated investment company
investing in a Master Series will be able to satisfy the requirements of Subchapter M of the Code, assuming that
an investment company invested all of its assets in a Master Series.
Stephens has charged the Master Series for expenses incurred in connection with organization and registration as
investment companies under the Investment Company Act of 1940. Such expenses are being amortized on a
straight-line basis over 60 months from the date the Master Series commenced operations. In the event any of the
initial beneficial interests are redeemed during the 60 month amortization period, Stephens will reimburse the
Series for the unamortized balance of such organizational costs in the same proportion as the number of beneficial
interests reduced bears to the number of initial beneficial interests outstanding at the time of redemption.
Transactions involving purcha