NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Fund, are reflected in the accompanying Statement of Assets and Liabilities at market value. The underlying face
amount at value of any open purchased options is shown in the Schedule of Investments. This amount reflects
each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value
of the underlying instruments, if there is an illiquid secondary market for the contract or if the counterparty does
not perform under the contract's terms.
Premiums received from writing options which expire are treated as realized gains. Premiums received from
writing options which are exercised or are closed are added to or offset against the proceeds or amount paid on
the transaction to determine the realized gain or loss. Realized gains and losses on purchased options are included
in realized gains and losses on investment securities, except purchased options on foreign currency which are
included in realized gains and losses on foreign currency transactions. If a put option written by the Fund is
exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund, as writer of an
option, has no control over whether the underlying securities may be sold (call) or purchased (put) and as a result
bears the market risk of an unfavorable change in the price of the security underlying the written option.
Exchange traded options are valued at the last sale price, or if no sales are reported, the last bid price for
purchased options and the last ask price for written options. Options traded over-the-counter are valued using
prices supplied by the dealers.
The Fund entered into no such transactions for the six months ended March 31, 2001.
The Fund may enter into financial futures contracts for the delayed sale or delivery of securities or contracts
based on financial indices at a fixed price on a future date. Pursuant to the margin requirements, the Fund
deposits either cash o