NOTES TO FINANCIAL STATEMENTS
March 31, 2001 (unaudited) AFD Exchange Reserves
NOTE A: Significant Accounting Policies
AFD Exchange Reserves (the "Fund") is registered under the Investment Company Act of 1940 as a diversified,
open-end investment company. The Fund's investment objective is to provide maximum current income to the
extent consistent with safety of principal and liquidity. The Fund offers Class A, Class B, Class C and Advisor
Class shares. All four classes of shares have identical voting, dividend, liquidation and other rights, except that
each class bears its own distribution and transfer agency expenses and has exclusive voting rights with respect to
its distribution plan.
Class A shares are sold for cash without an initial sales charge at the time of purchase. On cash purchases of
$1,000,000 or more, however, a contingent deferred sales charge ("CDSC") equal to 1% of the lesser of net
asset value at the time of redemption or original cost if re deemed within one year may be charged. Class A
shares may be exchanged for Class A shares of other Alliance Mutual Funds, subject, in the case of Class A
shares of the Fund that were purchased for cash, to any applicable initial sales charge at the time of exchange.
Class A shares of the Fund also are offered in exchange for Class A shares of other Alliance Mutual Funds
without any sales charge at the time of purchase, but on Class A shares that were received in exchange for
Alliance Mutual Fund Class A shares that were not subject to an initial sales charge when originally purchased for
cash because the purchase was of $1,000,000 or more, a 1% CDSC may be assessed if shares of the Fund are
redeemed within one year of the Alliance Mutual Fund Class A shares originally purchased for cash.
Class B shares are sold for cash without an initial sales charge. However, a CDSC is charged if shares are re
deemed within four years after purchase. The CDSC charge declines from 4% to zero depending on the period
of time the shares are held. Cl