NOTES TO FINANCIAL STATEMENTS
(e) Security transactions and investment income--Security transactions are accounted for on the date the
securities are purchased or sold (the trade dates). Dividend income is recorded on the ex-dividend dates.
Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when
the Portfolio has determined the ex-dividend date. Interest income (including amortization of discount) is
recognized on the accrual basis. Realized gains and losses on security transactions are determined on the
identified cost basis.
2 Investment Advisory Agreement and Transactions with Affiliates:
The Trust has entered into an Investment Advisory Agreement with Mercury Asset Management International
Ltd. ("Mercury International"), an affiliate of Fund Asset Management, L.P. ("FAM"). The general partner of
FAM is Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML
& Co."), which is the limited partner.
Mercury International is responsible for the management of the Portfolio's investments and provides the necessary
personnel, facilities, equipment and certain other services necessary to the operations of the Portfolio. For such
services, the Portfolio pays a monthly fee at an annual rate of .75% of the average daily value of the Portfolio's
net assets. The Trust has entered into a Sub-Advisory Agreement with FAM with respect to the Portfolio,
pursuant to which FAM provides investment advisory services with respect to the Portfolio's daily cash assets.
Mercury International has agreed to pay FAM a fee in an amount to be determined from time to time by both
parties but in no event in excess of the amount that Mercury International actually receives for providing services
to the Trust pursuant to the Investment Advisory Agreement.
In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated, a subsidiary of ML & Co., received $29,981 in
commissions on the execution of portfolio s