NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
Certain funds use foreign currency exchange contracts to facilitate transactions in foreign-denominated
investments. Losses may arise from changes in the value of the foreign currency or if the counterparties do not
perform under the contracts' terms. The U.S. dollar value of foreign currency exchange contracts is determined
using contractual currency exchange rates established at the time of each trade.
Each Fund (except the Municipal Bond and U.S. Government Securities Funds) may purchase investments of
foreign issuers. Investing in securities of foreign companies and foreign governments involves special risks and
considerations not typically associated with investing in U.S. companies and securities of the U.S. Government.
These risks include revaluation of currencies and the risk of appropriation. Moreover, the markets for securities
of many foreign companies and foreign governments and their markets may be less liquid and the prices of such
securities may be more volatile than those of securities of comparable U.S. companies and the U.S. Government.
D. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- Each Fund that may invest in
foreign investments may enter into forward foreign currency exchange contracts to protect investments against
changes in foreign exchange rates. A forward foreign currency exchange contract is an agreement between two
parties to buy or sell currency at a set price on a future date.
The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked-
to-market daily using the forward currency exchange rate and the change in market value is recorded as
unrealized appreciation (depreciation) on foreign currency translations in the Funds' Statements of Assets and
Liabilities. Realized gain or loss is recognized when the contract is closed equal to the difference between the
value of the contract at the time it was opened and the value at the time it was closed and recorded a