Cash (and Cash Alternatives)

• Money Market Funds. Money market funds invest in obligations issued or guaranteed by the U.S. government or its agencies, state and local governments, banks, and corporations. Talk with your Financial Advisor to determine which fund may be suitable for your needs.

An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

Investors should carefully consider the investment objectives, risks, charges and expenses of an investment company prior to investing. Your A.G. Edwards Financial Advisor can provide you with a prospectus containing this and other important information. Please read the prospectus carefully before investing.

• Treasury Bills (T-Bills). Treasury bills are securities issued with maturities of six months or less at a price that is a discount to the face value of the security. The investor receives the face value of the certificate at maturity. T-bills are among the most creditworthy instruments an investor can hold, and they offer a high degree of liquidity. Investors who sell T-bills prior to redemption may realize a loss due to changes in prices that reflect changes in short-term interest rates. Interest on Treasury securities is exempt from state taxes but subject to federal income tax.

• U.S. Government Agency Discount Notes (Agency Discos). Agency discos are issued by government-sponsored enterprises (GSEs), such as the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), but do not constitute direct obligations of the U.S. government agency. Discos are issued at a discount, have maturities of one year or less, and mature at face value. Interest from some GSEs is state-tax-exempt but subject to federal income tax. Investors who sell agency discos prior to redemption may realize a loss due to changes in price associated with changes in short-term interest rates.

• Commercial Paper. Commercial paper (CP) is an unsecured short-term obligation of a corporation to pay a fixed amount at maturities of 270 days or less. CP is issued at a discount and typically trades in minimum increments of $100,000 or greater. CP is federally and state taxable.

A range of companies issue CP. Moody's Investors Service (Moody's) and Standard & Poor's (S&P) issue ratings that assess the short-term credit quality of CP issuers. Issuers with lower ratings pay higher yields to compensate investors for the added risk of potential default. Liquidity in the secondary market for CP may be limited, depending on the issuer and the overall size of the issue.

• Variable Rate Demand Obligations (VRDOs or Floaters). Issued by municipalities and municipal authorities, floaters are bonds featuring short-term rates that are reset by a remarketing agent on a periodic basis ranging from daily to monthly. Floaters are distinguished by their "demand" feature, which lets holders redeem their bonds for face value at each reset date. Because of the demand feature, SEC rules allow money market funds to invest in floaters. Income from these securities may be federally taxable or free from federal and/or state taxes.

Some floaters may be subject to the alternative minimum tax. The minimum denomination for floaters is generally $100,000. Many VRDOs feature strong credit quality and often carry dual ratings. The first is a long-term rating that assesses the issuer's ability to make scheduled interest and principal payments. In addition, VRDOs have a short-term rating that helps evaluate the risk associated with the demand feature. A.G. Edwards does not provide accounting or tax-preparation advice. Please consult your tax advisor.

The issuer can call these investments at any time (at par plus accrued interest). If your floater is called, you may be subject to reinvestment risk, which involves reinvesting at lower interest rates.