NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
In the event of default of the obligation to repurchase, the Fund has the right to liquidate the collateral and apply
the proceeds in satisfaction of the obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the collateral may be subject to legal
proceedings. The Fund occasionally participates in joint repurchase agreement transactions with other funds
managed by Mitchell Hutchins.
Investment Transactions and Investment Income--Investment transactions are recorded on the trade date.
Realized gains and losses from investments and foreign exchange transactions are calculated on the identified cost
method. Interest income is recorded on an accrual basis. Discounts are accreted as adjustments to interest
income and the identified cost of investments.
Foreign Currency Translation--The books and records of the Fund are maintained in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars on the following basis: (1) Market value of investment
securities, other assets and liabilities--at the exchange rates prevailing at the end of the period; and (2) Purchases
and sales of investment securities, income and expenses--at the rates of exchange prevailing on the respective
dates of such transactions.
Although the net assets and the market value of the Fund's portfolio are presented at the foreign exchange rates at
the end of the period, the Fund does not generally isolate the effect of fluctuations in foreign exchange rates from
the effect of the changes in market prices of securities. However, the Fund does isolate the effect of fluctuations in
foreign exchange rates when determining the gain or loss upon the sale or maturity of foreign currency-
denominated debt obligations pursuant to federal income tax regulations. Certain foreign exchange gains and
losses included in realized and unrealized gains and losses are included in or are a reduction of ord