CHUBB GROUP OF INSURANCE COMPANIES                DECLARATIONS
                                                  FINANCIAL INSTITUTION
15 Mountain View Road, Warren, New Jersey 07059   INVESTMENT
                                                  COMPANY ASSET PROTECTION BOND

NAME OF ASSURED (including its SUBSIDIARIES):     Bond Number: 82052990

FLAHERTY & CRUMRINE / CLAYMORE PREFERRED
SECURITIES INCOME FUND                            FEDERAL INSURANCE COMPANY

301 E. COLORADO BLVD., STE 720                    Incorporated under the laws of
PASADENA, CA 91101                                Indiana a stock insurance
                                                  company herein called the
                                                  COMPANY Capital Center, 251
                                                  North Illinois, Suite 1100
                                                  Indianapolis, IN 46204-1927

ITEM 1.   BOND PERIOD:   from   12:01 a.m. on   May 15, 2008
                           to   12:01 a.m. on   May 15, 2009

ITEM 2.   LIMITS OF LIABILITY--DEDUCTIBLE AMOUNTS:

          If "Not Covered" is inserted below opposite any specified INSURING
          CLAUSE, such INSURING CLAUSE and any other reference shall be deemed
          to be deleted. THERE SHALL BE NO DEDUCTIBLE APPLICABLE TO ANY LOSS
          UNDER INSURING CLAUSE 1. SUSTAINED BY ANY INVESTMENT COMPANY.



                                                                                  DEDUCTIBLE
          INSURING CLAUSE                                    LIMIT OF LIABILITY     AMOUNT
          ---------------                                    ------------------   ----------
                                                                             
          1.    Employee                                         $ 1,500,000       $ 25,000
          2.    On Premises                                      $ 1,500,000       $ 25,000
          3.    In Transit                                       $ 1,500,000       $ 25,000
          4.    Forgery or Alteration                            $       n/a       $    n/a
          5.    Extended Forgery                                 $       n/a       $    n/a
          6.    Counterfeit Money                                $       n/a       $    n/a
          7.    Threats to Person                                $       n/a       $    n/a
          8.    Computer System                                  $       n/a       $    n/a
          9.    Voice Initiated Funds Transfer Instruction       $       n/a       $    n/a
          10.   Uncollectible Items of Deposit                   $       n/a       $    n/a
          11.   Audit Expense                                    $    25,000       $      0


ITEM 3.   THE LIABILITY OF THE COMPANY IS ALSO SUBJECT TO THE TERMS OF THE
          FOLLOWING ENDORSEMENTS EXECUTED SIMULTANEOUSLY HEREWITH:

          1)    Deleting Valuation & Amending Change/Modifications; 2)
                Compliance with Trade Sanction Laws Endt;

          3)    Premium Endt

IN WITNESS WHEREOF, THE COMPANY has caused this Bond to be signed by its
authorized officers, but it shall not be valid unless also signed by an
authorized representative of the Company.

/S/ W. ANDREW MACAN                /S/ THOMAS F. MOTAMED
    SECRETARY                          PRESIDENT

/S/ ROBERT HAMBURGER
    AUTHORIZED REPRESENTATIVE

ICAP Bond (5-98) - Federal
Form 17-02-1421 (Ed. 5-98) Page 1 of 1



                             The COMPANY, in consideration of payment of the
                             required premium, and in reliance on the
                             APPLICATION and all other statements made and
                             information furnished to the COMPANY by the
                             ASSURED, and subject to the DECLARATIONS made a
                             part of this Bond and to all other terms and
                             conditions of this Bond, agrees to pay the ASSURED
                             for:

INSURING CLAUSES

EMPLOYEE                     1.    Loss resulting directly from LARCENY or
                                   EMBEZZLEMENT committed by any EMPLOYEE, alone
                                   or in collusion with others.

ON PREMISES                  2.    Loss of PROPERTY resulting directly from
                                   robbery, burglary, false pretenses, common
                                   law or statutory larceny, misplacement,
                                   mysterious unexplainable disappearance,
                                   damage, destruction or removal, from the
                                   possession, custody or control of the
                                   ASSURED, while such PROPERTY is lodged or
                                   deposited at premises located anywhere.

IN TRANSIT                   3.    Loss of PROPERTY resulting directly from
                                   common law or statutory larceny,
                                   misplacement, mysterious unexplainable
                                   disappearance, damage or destruction, while
                                   the PROPERTY is in transit anywhere:

                                   a.    in an armored motor vehicle, including
                                         loading and unloading thereof,

                                   b.    in the custody of a natural person
                                         acting as a messenger of the ASSURED,
                                         or

                                   c.    in the custody of a TRANSPORTATION
                                         COMPANY and being transported in a
                                         conveyance other than an armored motor
                                         vehicle provided, however, that covered
                                         PROPERTY transported in such manner is
                                         limited to the following:

                                         (1)   written records,

                                         (2)   securities issued in registered
                                               form, which are not endorsed or
                                               are restrictively endorsed, or

                                         (3)   negotiable instruments not
                                               payable to bearer, which are not
                                               endorsed or are restrictively
                                               endorsed.

                             Coverage under this INSURING CLAUSE begins
                             immediately on the receipt of such PROPERTY by the
                             natural person or TRANSPORTATION COMPANY and ends
                             immediately on delivery to the premises of the
                             addressee or to any representative of the addressee
                             located anywhere.

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INSURING CLAUSES
(CONTINUED)

FORGERY OR ALTERATION        4.    Loss resulting directly from:

                                   a.    FORGERY on, or fraudulent material
                                         alteration of, any bills of exchange,
                                         checks, drafts, acceptances,
                                         certificates of deposits, promissory
                                         notes, due bills, money orders, orders
                                         upon public treasuries, letters of
                                         credit, other written promises, orders
                                         or directions to pay sums certain in
                                         money, or receipts for the withdrawal
                                         of PROPERTY, or

                                   b.    transferring, paying or delivering any
                                         funds or other PROPERTY, or
                                         establishing any credit or giving any
                                         value in reliance on any written
                                         instructions, advices or applications
                                         directed to the ASSURED authorizing or
                                         acknowledging the transfer, payment,
                                         delivery or receipt of funds or other
                                         PROPERTY, which instructions, advices
                                         or applications fraudulently purport to
                                         bear the handwritten signature of any
                                         customer of the ASSURED, or shareholder
                                         or subscriber to shares of an
                                         INVESTMENT COMPANY, or of any financial
                                         institution or EMPLOYEE but which
                                         instructions, advices or applications
                                         either bear a FORGERY or have been
                                         fraudulently materially altered without
                                         the knowledge and consent of such
                                         customer, shareholder, subscriber,
                                         financial institution or EMPLOYEE;

                                   excluding, however, under this INSURING
                                   CLAUSE any loss covered under INSURING CLAUSE
                                   5. of this Bond, whether or not coverage for
                                   INSURING CLAUSE 5. is provided for in the
                                   DECLARATIONS of this Bond. For the purpose of
                                   this INSURING CLAUSE, a mechanically
                                   reproduced facsimile signature is treated the
                                   same as a handwritten signature.

EXTENDED FORGERY             5.    Loss resulting directly from the ASSURED
                                   having, in good faith, and in the ordinary
                                   course of business, for its own account or
                                   the account of others in any capacity:

                                   a.    acquired, accepted or received,
                                         accepted or received, sold or
                                         delivered, or given value, extended
                                         credit or assumed liability, in
                                         reliance on any original SECURITIES,
                                         DOCUMENTS OR OTHER WRITTEN INSTRUMENTS
                                         which prove to:

                                         (1)   bear a FORGERY or a fraudulently
                                               material alteration,

                                         (2)   have been lost or stolen, or

                                         (3)   be COUNTERFEIT, or

                                   b.    guaranteed in writing or witnessed any
                                         signatures on any transfer, assignment,
                                         bill of sale, power of attorney,
                                         guarantee, endorsement or other
                                         obligation upon or in connection with
                                         any SECURITIES, DOCUMENTS OR OTHER
                                         WRITTEN INSTRUMENTS.

                                   Actual physical possession, and continued
                                   actual physical possession if taken as
                                   collateral, of such SECURITIES, DOCUMENTS OR
                                   OTHER WRITTEN INSTRUMENTS by an EMPLOYEE,
                                   CUSTODIAN, or a Federal or State chartered
                                   deposit institution of the ASSURED is a
                                   condition precedent to the ASSURED having
                                   relied on such items. Release or return of
                                   such collateral is an acknowledgment by the
                                   ASSURED that it no longer relies on such
                                   collateral.

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INSURING CLAUSES

EXTENDED FORGERY                   For the purpose of this INSURING CLAUSE, a
(CONTINUED)                        mechanically reproduced facsimile signature
                                   is treated the same as a handwritten
                                   signature.

COUNTERFEIT MONEY            6.    Loss resulting directly from the receipt by
                                   the ASSURED in good faith of any COUNTERFEIT
                                   money.

THREATS TO PERSON            7.    Loss resulting directly from surrender of
                                   PROPERTY away from an office of the ASSURED
                                   as a result of a threat communicated to the
                                   ASSURED to do bodily harm to an EMPLOYEE as
                                   defined in Section 1.e. (1), (2) and (5), a
                                   RELATIVE or invitee of such EMPLOYEE, or a
                                   resident of the household of such EMPLOYEE,
                                   who is, or allegedly is, being held captive
                                   provided, however, that prior to the
                                   surrender of such PROPERTY:

                                   a.    the EMPLOYEE who receives the threat
                                         has made a reasonable effort to notify
                                         an officer of the ASSURED who is not
                                         involved in such threat, and

                                   b.    the ASSURED has made a reasonable
                                         effort to notify the Federal Bureau of
                                         Investigation and local law enforcement
                                         authorities concerning such threat.

                                   It is agreed that for purposes of this
                                   INSURING CLAUSE, any EMPLOYEE of the ASSURED,
                                   as set forth in the preceding paragraph,
                                   shall be deemed to be an ASSURED hereunder,
                                   but only with respect to the surrender of
                                   money, securities and other tangible personal
                                   property in which such EMPLOYEE has a legal
                                   or equitable interest.

COMPUTER SYSTEM              8.    Loss resulting directly from fraudulent:

                                   a.    entries of data into, or

                                   b.    changes of data elements or programs
                                         within,

                                   a COMPUTER SYSTEM, provided the fraudulent
                                   entry or change causes:

                                         (1)   funds or other property to be
                                               transferred, paid or delivered,

                                         (2)   an account of the ASSURED or of
                                               its customer to be added,
                                               deleted, debited or credited, or

                                         (3)   an unauthorized account or a
                                               fictitious account to be debited
                                               or credited.

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INSURING CLAUSES
(CONTINUED)

VOICE INITIATED FUNDS        9.    Loss resulting directly from VOICE INITIATED
TRANSFER INSTRUCTION               FUNDS TRANSFER INSTRUCTION directed to the
                                   ASSURED authorizing the transfer of dividends
                                   or redemption proceeds of INVESTMENT COMPANY
                                   shares from a CUSTOMER'S account, provided
                                   such VOICE INITIATED FUNDS TRANSFER
                                   INSTRUCTION was:

                                   a.    received at the ASSURED'S offices by
                                         those EMPLOYEES of the ASSURED
                                         specifically authorized to receive the
                                         VOICE INITIATED FUNDS TRANSFER
                                         INSTRUCTION,

                                   b.    made by a person purporting to be a
                                         CUSTOMER, and

                                   c.    made by said person for the purpose of
                                         causing the ASSURED or CUSTOMER to
                                         sustain a loss or making an improper
                                         personal financial gain for such person
                                         or any other person.

                                   In order for coverage to apply under this
                                   INSURING CLAUSE, all VOICE INITIATED FUNDS
                                   TRANSFER INSTRUCTIONS must be received and
                                   processed in accordance with the Designated
                                   Procedures outlined in the APPLICATION
                                   furnished to the COMPANY.

UNCOLLECTIBLE ITEMS OF       10.   Loss resulting directly from the ASSURED
DEPOSIT                            having credited an account of a customer,
                                   shareholder or subscriber on the faith of any
                                   ITEMS OF DEPOSIT which prove to be
                                   uncollectible, provided that the crediting of
                                   such account causes:

                                   a.    redemptions or withdrawals to be
                                         permitted,

                                   b.    shares to be issued, or

                                   c.    dividends to be paid,

                                   from an account of an INVESTMENT COMPANY.

                                   In order for coverage to apply under this
                                   INSURING CLAUSE, the ASSURED must hold ITEMS
                                   OF DEPOSIT for the minimum number of days
                                   stated in the APPLICATION before permitting
                                   any redemptions or withdrawals, issuing any
                                   shares or paying any dividends with respect
                                   to such ITEMS OF DEPOSIT. ITEMS OF DEPOSIT
                                   shall not be deemed uncollectible until the
                                   ASSURED'S standard collection procedures have
                                   failed.

AUDIT EXPENSE                11.   Expense incurred by the ASSURED for that part
                                   of the cost of audits or examinations
                                   required by any governmental regulatory
                                   authority or self-regulatory organization to
                                   be conducted by such authority, organization
                                   or their appointee by reason of the discovery
                                   of loss sustained by the ASSURED and covered
                                   by this Bond.

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GENERAL AGREEMENTS

ADDITIONAL COMPANIES         A.    If more than one corporation, or INVESTMENT
INCLUDED AS ASSURED                COMPANY, or any combination of them is
                                   included as the ASSURED herein:

                                   (1)   The total liability of the COMPANY
                                         under this Bond for loss or losses
                                         sustained by any one or more or all of
                                         them shall not exceed the limit for
                                         which the COMPANY would be liable under
                                         this Bond if all such loss were
                                         sustained by any one of them.

                                   (2)   Only the first named ASSURED shall be
                                         deemed to be the sole agent of the
                                         others for all purposes under this
                                         Bond, including but not limited to the
                                         giving or receiving of any notice or
                                         proof required to be given and for the
                                         purpose of effecting or accepting any
                                         amendments to or termination of this
                                         Bond. The COMPANY shall furnish each
                                         INVESTMENT COMPANY with a copy of the
                                         Bond and with any amendment thereto,
                                         together with a copy of each formal
                                         filing of claim by any other named
                                         ASSURED and notification of the terms
                                         of the settlement of each such claim
                                         prior to the execution of such
                                         settlement.

                                   (3)   The COMPANY shall not be responsible
                                         for the proper application of any
                                         payment made hereunder to the first
                                         named ASSURED.

                                   (4)   Knowledge possessed or discovery made
                                         by any partner, director, trustee,
                                         officer or supervisory employee of any
                                         ASSURED shall constitute knowledge or
                                         discovery by all the ASSUREDS for the
                                         purposes of this Bond.

                                   (5)   If the first named ASSURED ceases for
                                         any reason to be covered under this
                                         Bond, then the ASSURED next named on
                                         the APPLICATION shall thereafter be
                                         considered as the first named ASSURED
                                         for the purposes of this Bond.

REPRESENTATION MADE BY       B.    The ASSURED represents that all information
ASSURED                            it has furnished in the APPLICATION for this
                                   Bond or otherwise is complete, true and
                                   correct. Such APPLICATION and other
                                   information constitute part of this Bond.

                                   The ASSURED must promptly notify the COMPANY
                                   of any change in any fact or circumstance
                                   which materially affects the risk assumed by
                                   the COMPANY under this Bond.

                                   Any intentional misrepresentation, omission,
                                   concealment or incorrect statement of a
                                   material fact, in the APPLICATION or
                                   otherwise, shall be grounds for recision of
                                   this Bond.

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GENERAL AGREEMENTS
(CONTINUED)

ADDITIONAL OFFICES OR        C.    If the ASSURED, other than an INVESTMENT
EMPLOYEES - CONSOLIDATION,         COMPANY, while this Bond is in force, merges
MERGER OR PURCHASE OR              or consolidates with, or purchases or
ACQUISITION OF ASSETS OR           acquires assets or liabilities of another
LIABILITIES - NOTICE TO            institution, the ASSURED shall not have the
COMPANY                            coverage afforded under this Bond for loss
                                   which has:

                                   (1)   occurred or will occur on premises, or

                                   (2)   been caused or will be caused by an
                                         employee, or

                                   (3)   arisen or will arise out of the assets
                                   or liabilities, of such institution, unless
                                   the ASSURED:

                                   a.    gives the COMPANY written notice of the
                                         proposed consolidation, merger or
                                         purchase or acquisition of assets or
                                         liabilities prior to the proposed
                                         effective date of such action, and

                                   b.    obtains the written consent of the
                                         COMPANY to extend some or all of the
                                         coverage provided by this Bond to such
                                         additional exposure, and

                                   c.    on obtaining such consent, pays to the
                                         COMPANY an additional premium.

CHANGE OF CONTROL -          D.    When the ASSURED learns of a change in
NOTICE TO COMPANY                  control (other than in an INVESTMENT
                                   COMPANY), as set forth in Section 2(a) (9) of
                                   the Investment Company Act of 1940, the
                                   ASSURED shall within sixty (60) days give
                                   written notice to the COMPANY setting forth:

                                   (1)   the names of the transferors and
                                         transferees (or the names of the
                                         beneficial owners if the voting
                                         securities are registered in another
                                         name),

                                   (2)   the total number of voting securities
                                         owned by the transferors and the
                                         transferees (or the beneficial owners),
                                         both immediately before and after the
                                         transfer, and

                                   (3)   the total number of outstanding voting
                                         securities.

                                   Failure to give the required notice shall
                                   result in termination of coverage for any
                                   loss involving a transferee, to be effective
                                   on the date of such change in control.

COURT COSTS AND              E.    The COMPANY will indemnify the ASSURED for
ATTORNEYS' FEES                    court costs and reasonable attorneys' fees
                                   incurred and paid by the ASSURED in defense,
                                   whether or not successful, whether or not
                                   fully litigated on the merits and whether or
                                   not settled, of any claim, suit or legal
                                   proceeding with respect to which the ASSURED
                                   would be entitled to recovery under this
                                   Bond. However, with respect to INSURING
                                   CLAUSE 1., this Section shall only apply in
                                   the event that:

                                   (1)   an EMPLOYEE admits to being guilty of
                                         LARCENY OR EMBEZZLEMENT,

                                   (2)   an EMPLOYEE is adjudicated to be guilty
                                         of LARCENY OR EMBEZZLEMENT, or

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GENERAL AGREEMENTS

COURT COSTS AND              (3)   in the absence of 1 or 2 above, an
ATTORNEYS' FEES                    arbitration panel agrees, after a review of
(CONTINUED)                        an agreed statement of facts between the
                                   COMPANY and the ASSURED, that an EMPLOYEE
                                   would be found guilty of LARCENY OR
                                   EMBEZZLEMENT if such EMPLOYEE were
                                   prosecuted.

                             The ASSURED shall promptly give notice to the
                             COMPANY of any such suit or legal proceeding and at
                             the request of the COMPANY shall furnish copies of
                             all pleadings and pertinent papers to the COMPANY.
                             The COMPANY may, at its sole option, elect to
                             conduct the defense of all or part of such legal
                             proceeding. The defense by the COMPANY shall be in
                             the name of the ASSURED through attorneys selected
                             by the COMPANY. The ASSURED shall provide all
                             reasonable information and assistance as required
                             by the COMPANY for such defense.

                             If the COMPANY declines to defend the ASSURED, no
                             settlement without the prior written consent of the
                             COMPANY nor judgment against the ASSURED shall
                             determine the existence, extent or amount of
                             coverage under this Bond.

                             If the amount demanded in any such suit or legal
                             proceeding is within the DEDUCTIBLE AMOUNT, if any,
                             the COMPANY shall have no liability for court costs
                             and attorney's fees incurred in defending all or
                             part of such suit or legal proceeding.

                             If the amount demanded in any such suit or legal
                             proceeding is in excess of the LIMIT OF LIABILITY
                             stated in ITEM 2. of the DECLARATIONS for the
                             applicable INSURING CLAUSE, the COMPANY'S liability
                             for court costs and attorney's fees incurred in
                             defending all or part of such suit or legal
                             proceedings is limited to the proportion of such
                             court costs and attorney's fees incurred that the
                             LIMIT OF LIABILITY stated in ITEM 2. of the
                             DECLARATIONS for the applicable INSURING CLAUSE
                             bears to the total of the amount demanded in such
                             suit or legal proceeding.

                             If the amount demanded is any such suit or legal
                             proceeding is in excess of the DEDUCTIBLE AMOUNT,
                             if any, but within the LIMIT OF LIABILITY stated in
                             ITEM 2.    of the DECLARATIONS for the applicable
                             INSURING CLAUSE, the COMPANY'S liability for court
                             costs and attorney's fees incurred in defending all
                             or part of such suit or legal proceedings shall be
                             limited to the proportion of such court costs or
                             attorney's fees that the amount demanded that would
                             be payable under this Bond after application of the
                             DEDUCTIBLE AMOUNT, bears to the total amount
                             demanded.

                             Amounts paid by the COMPANY for court costs and
                             attorneys' fees shall be in addition to the LIMIT
                             OF LIABILITY stated in ITEM 2. of the DECLARATIONS.

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CONDITIONS AND
LIMITATIONS

DEFINITIONS                  1.    As used in this Bond:

                                   a.    COMPUTER SYSTEM means a computer and
                                         all input, output, processing, storage,
                                         off-line media libraries, and
                                         communication facilities which are
                                         connected to the computer and which are
                                         under the control and supervision of
                                         the operating system(s) or
                                         application(s) software used by the
                                         ASSURED.

                                   b.    COUNTERFEIT means an imitation of an
                                         actual valid original which is intended
                                         to deceive and be taken as the
                                         original.

                                   c.    CUSTODIAN means the institution
                                         designated by an INVESTMENT COMPANY to
                                         maintain possession and control of its
                                         assets.

                                   d.    CUSTOMER means an individual,
                                         corporate, partnership, trust customer,
                                         shareholder or subscriber of an
                                         INVESTMENT COMPANY which has a written
                                         agreement with the ASSURED for VOICE
                                         INITIATED FUNDS TRANSFER INSTRUCTION.

                                   e.    EMPLOYEE means:

                                         (1)   an officer of the ASSURED,

                                         (2)   a natural person while in the
                                               regular service of the ASSURED at
                                               any of the ASSURED'S premises and
                                               compensated directly by the
                                               ASSURED through its payroll
                                               system and subject to the United
                                               States Internal Revenue Service
                                               Form W-2 or equivalent income
                                               reporting plans of other
                                               countries, and whom the ASSURED
                                               has the right to control and
                                               direct both as to the result to
                                               be accomplished and details and
                                               means by which such result is
                                               accomplished in the performance
                                               of such service,

                                         (3)   a guest student pursuing studies
                                               or performing duties in any of
                                               the ASSURED'S premises,

                                         (4)   an attorney retained by the
                                               ASSURED and an employee of such
                                               attorney while either is
                                               performing legal services for the
                                               ASSURED,

                                         (5)   a natural person provided by an
                                               employment contractor to perform
                                               employee duties for the ASSURED
                                               under the ASSURED'S supervision
                                               at any of the ASSURED'S premises,

                                         (6)   an employee of an institution
                                               merged or consolidated with the
                                               ASSURED prior to the effective
                                               date of this Bond,

                                         (7)   a director or trustee of the
                                               ASSURED, but only while
                                               performing acts within the scope
                                               of the customary and usual duties
                                               of any officer or other employee
                                               of the ASSURED or while acting as
                                               a member of any committee duly
                                               elected or appointed to examine
                                               or audit or have custody of or
                                               access to PROPERTY of the
                                               ASSURED, or

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CONDITIONS AND
LIMITATIONS

DEFINITIONS                  (8)   each natural person, partnership or
(CONTINUED)                        corporation authorized by written agreement
                                   with the ASSURED to perform services as
                                   electronic data processor of checks or other
                                   accounting records related to such checks but
                                   only while such person, partnership or
                                   corporation is actually performing such
                                   services and not:

                                   a.    creating, preparing, modifying or
                                         maintaining the ASSURED'S computer
                                         software or programs, or

                                   b.    acting as transfer agent or in any
                                         other agency capacity in issuing
                                         checks, drafts or securities for the
                                         ASSURED,

                             (9)   any partner, officer or employee of an
                                   investment advisor, an underwriter
                                   (distributor), a transfer agent or
                                   shareholder accounting recordkeeper, or an
                                   administrator, for an INVESTMENT COMPANY
                                   while performing acts coming within the scope
                                   of the customary and usual duties of an
                                   officer or employee of an INVESTMENT COMPANY
                                   or acting as a member of any committee duly
                                   elected or appointed to examine, audit or
                                   have custody of or access to PROPERTY of AN
                                   INVESTMENT COMPANY.

                                   The term EMPLOYEE shall not include any
                                   partner, officer or employee of a transfer
                                   agent, shareholder accounting recordkeeper or
                                   administrator:

                                   a.    which is not an "affiliated person" (as
                                         defined in Section 2(a) of the
                                         Investment Company Act of 1940) of an
                                         INVESTMENT COMPANY or of the investment
                                         advisor or underwriter (distributor) of
                                         such INVESTMENT COMPANY, or

                                   b.    which is a "bank" (as defined in
                                         Section 2(a) of the Investment Company
                                         Act of 1940).

                                         This Bond does not afford coverage in
                                         favor of the employers of persons as
                                         set forth in e. (4), (5) and (8) above,
                                         and upon payment to the ASSURED by the
                                         COMPANY resulting directly from LARCENY
                                         OR EMBEZZLEMENT committed by any of the
                                         partners, officers or employees of such
                                         employers, whether acting alone or in
                                         collusion with others, an assignment of
                                         such of the ASSURED'S rights and causes
                                         of action as it may have against such
                                         employers by reason of such acts so
                                         committed shall, to the extent of such
                                         payment, be given by the ASSURED to the
                                         COMPANY, and the ASSURED shall execute
                                         all papers necessary to secure to the
                                         COMPANY the rights provided for herein.

                                   Each employer of persons as set forth in
                                   e.(4), (5) and (8) above and the partners,
                                   officers and other employees of such
                                   employers shall collectively be deemed to be
                                   one person for all the purposes of this Bond;
                                   excepting, however, the fifth paragraph of
                                   Section 13.

                                   Independent contractors not specified in
                                   e.(4), (5) or (8) above, intermediaries,
                                   agents, brokers or other representatives of
                                   the same general character shall not be
                                   considered EMPLOYEES.

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CONDITIONS AND
LIMITATIONS

DEFINITIONS                        f.    FORGERY means the signing of the name
(CONTINUED)                              of another natural person with the
                                         intent to deceive but does not mean a
                                         signature which consists in whole or in
                                         part of one's own name, with or without
                                         authority, in any capacity for any
                                         purpose.

                                   g.    INVESTMENT COMPANY means any investment
                                         company registered under the Investment
                                         Company Act of 1940 and listed under
                                         the NAME OF ASSURED on the
                                         DECLARATIONS.

                                   h.    ITEMS OF DEPOSIT means one or more
                                         checks or drafts drawn upon a financial
                                         institution in the United States of
                                         America.

                                   i.    LARCENY OR EMBEZZLEMENT means larceny
                                         or embezzlement as defined in Section
                                         37 of the Investment Company Act of
                                         1940.

                                   j.    PROPERTY means money, revenue and other
                                         stamps; securities; including any note,
                                         stock, treasury stock, bond, debenture,
                                         evidence of indebtedness, certificate
                                         of deposit, certificate of interest or
                                         participation in any profit-sharing
                                         agreement, collateral trust
                                         certificate, preorganization
                                         certificate or subscription,
                                         transferable share, investment
                                         contract, voting trust certificate,
                                         certificate of deposit for a security,
                                         fractional undivided interest in oil,
                                         gas, or other mineral rights, any
                                         interest or instruments commonly known
                                         as a security under the Investment
                                         Company Act of 1940, any other
                                         certificate of interest or
                                         participation in, temporary or interim
                                         certificate for, receipt for, guarantee
                                         of, or warrant or right to subscribe to
                                         or purchase any of the foregoing; bills
                                         of exchange; acceptances; checks;
                                         withdrawal orders; money orders;
                                         travelers' letters of credit; bills of
                                         lading; abstracts of title; insurance
                                         policies, deeds, mortgages on real
                                         estate and/or upon chattels and
                                         interests therein; assignments of such
                                         policies, deeds or mortgages; other
                                         valuable papers, including books of
                                         accounts and other records used by the
                                         ASSURED in the conduct of its business
                                         (but excluding all electronic data
                                         processing records); and, all other
                                         instruments similar to or in the nature
                                         of the foregoing in which the ASSURED
                                         acquired an interest at the time of the
                                         ASSURED'S consolidation or merger with,
                                         or purchase of the principal assets of,
                                         a predecessor or which are held by the
                                         ASSURED for any purpose or in any
                                         capacity and whether so held
                                         gratuitously or not and whether or not
                                         the ASSURED is liable therefor.

                                   k.    RELATIVE means the spouse of an
                                         EMPLOYEE or partner of the ASSURED and
                                         any unmarried child supported wholly
                                         by, or living in the home of, such
                                         EMPLOYEE or partner and being related
                                         to them by blood, marriage or legal
                                         guardianship.

                                   l.    SECURITIES, DOCUMENTS OR OTHER WRITTEN
                                         INSTRUMENTS means original (including
                                         original counterparts) negotiable or
                                         non-negotiable instruments, or
                                         assignments thereof, which in and of
                                         themselves represent an equitable
                                         interest, ownership, or debt and which
                                         are in the ordinary course of business
                                         transferable by delivery of such
                                         instruments with any necessary
                                         endorsements or assignments.

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 10 of 19



CONDITIONS AND
LIMITATIONS

DEFINITIONS                        m.    SUBSIDIARY means any organization that,
(CONTINUED)                              at the inception date of this Bond, is
                                         named in the APPLICATION or is created
                                         during the BOND PERIOD and of which
                                         more than fifty percent (50%) of the
                                         outstanding securities or voting rights
                                         representing the present right to vote
                                         for election of directors is owned or
                                         controlled by the ASSURED either
                                         directly or through one or more of its
                                         subsidiaries.

                                   n.    TRANSPORTATION COMPANY means any
                                         organization which provides its own or
                                         its leased vehicles for transportation
                                         or which provides freight forwarding or
                                         air express services.

                                   o.    VOICE INITIATED ELECTION means any
                                         election concerning dividend options
                                         available to INVESTMENT COMPANY
                                         shareholders or subscribers which is
                                         requested by voice over the telephone.

                                   p.    VOICE INITIATED REDEMPTION means any
                                         redemption of shares issued by an
                                         INVESTMENT COMPANY which is requested
                                         by voice over the telephone.

                                   q.    VOICE INITIATED FUNDS TRANSFER
                                         INSTRUCTION means any VOICE INITIATED
                                         REDEMPTION or VOICE INITIATED ELECTION.

                                   For the purposes of these definitions, the
                                   singular includes the plural and the plural
                                   includes the singular, unless otherwise
                                   indicated.

GENERAL EXCLUSIONS -         2.    THIS BOND DOES NOT DIRECTLY OR INDIRECTLY
APPLICABLE TO ALL INSURING         COVER:
CLAUSES
                                   a.    loss not reported to the COMPANY in
                                          writing within sixty (60) days after
                                         termination of this Bond as an
                                         entirety;

                                   b.    loss due to riot or civil commotion
                                         outside the United States of America
                                         and Canada, or any loss due to
                                         military, naval or usurped power, war
                                         or insurrection. This Section 2.b.,
                                         however, shall not apply to loss which
                                         occurs in transit in the circumstances
                                         recited in INSURING CLAUSE 3., provided
                                         that when such transit was initiated
                                         there was no knowledge on the part of
                                         any person acting for the ASSURED of
                                         such riot, civil commotion, military,
                                         naval or usurped power, war or
                                         insurrection;

                                   c.    loss resulting from the effects of
                                         nuclear fission or fusion or
                                         radioactivity;

                                   d.    loss of potential income including, but
                                         not limited to, interest and dividends
                                         not realized by the ASSURED or by any
                                         customer of the ASSURED;

                                   e.    damages of any type for which the
                                         ASSURED is legally liable, except
                                         compensatory damages, but not multiples
                                         thereof, arising from a loss covered
                                         under this Bond;

                                   f.    costs, fees and expenses incurred by
                                         the ASSURED in establishing the
                                         existence of or amount of loss under
                                         this Bond, except to the extent covered
                                         under INSURING CLAUSE 11.;

                                   g.    loss resulting from indirect or
                                         consequential loss of any nature;

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 11 of 19



CONDITIONS AND
LIMITATIONS

GENERAL EXCLUSIONS -               h.    loss resulting from dishonest acts by
APPLICABLE TO ALL INSURING               any member of the Board of Directors or
CLAUSES                                  Board of Trustees of the ASSURED who is
(CONTINUED)                              not an EMPLOYEE, acting alone or in
                                         collusion with others;

                                   i.    loss, or that part of any loss,
                                         resulting solely from any violation by
                                         the ASSURED or by any EMPLOYEE:

                                         (1)   of any law regulating:

                                               a.    the issuance, purchase or
                                                     sale of securities,

                                               b.    securities transactions on
                                                     security or commodity
                                                     exchanges or the over the
                                                     counter market,

                                               c.    investment companies,

                                               d.    investment advisors, or

                                         (2)   of any rule or regulation made
                                               pursuant to any such law; or

                                   j.    loss of confidential information,
                                         material or data;

                                   k.    loss resulting from voice requests or
                                         instructions received over the
                                         telephone, provided however, this
                                         Section 2.k. shall not apply to
                                         INSURING CLAUSE 7. or 9.

SPECIFIC EXCLUSIONS -        3.    THIS BOND DOES NOT DIRECTLY OR INDIRECTLY
APPLICABLE TO ALL INSURING         COVER:
CLAUSES EXCEPT INSURING
CLAUSE 1.                          a.    loss caused by an EMPLOYEE, provided,
                                         however, this Section 3.a. shall not
                                         apply to loss covered under INSURING
                                         CLAUSE 2. or 3. which results directly
                                         from misplacement, mysterious
                                         unexplainable disappearance, or damage
                                         or destruction of PROPERTY;

                                   b.    loss through the surrender of property
                                         away from premises of the ASSURED as a
                                         result of a threat:

                                         (1)   to do bodily harm to any natural
                                               person, except loss of PROPERTY
                                               in transit in the custody of any
                                               person acting as messenger of the
                                               ASSURED, provided that when such
                                               transit was initiated there was
                                               no knowledge by the ASSURED of
                                               any such threat, and provided
                                               further that this Section 3.b.
                                               shall not apply to INSURING
                                               CLAUSE 7., or

                                         (2)   to do damage to the premises or
                                               PROPERTY of the ASSURED;

                                   c.    loss resulting from payments made or
                                         withdrawals from any account involving
                                         erroneous credits to such account;

                                   d.    loss involving ITEMS OF DEPOSIT which
                                         are not finally paid for any reason
                                         provided however, that this Section
                                         3.d. shall not apply to INSURING CLAUSE
                                         10.;

                                   e.    loss of property while in the mail;

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 12 of 19



CONDITIONS AND
LIMITATIONS

SPECIFIC EXCLUSIONS -              f.    loss resulting from the failure for any
APPLICABLE TO ALL INSURING               reason of a financial or depository
CLAUSES EXCEPT INSURING                  institution, its receiver or other
CLAUSE 1.                                liquidator to pay or deliver funds or
(CONTINUED)                              other PROPERTY to the ASSURED provided
                                         further that this Section 3.f. shall
                                         not apply to loss of PROPERTY resulting
                                         directly from robbery, burglary,
                                         misplacement, mysterious unexplainable
                                         disappearance, damage, destruction or
                                         removal from the possession, custody or
                                         control of the ASSURED.

                                   g.    loss of PROPERTY while in the custody
                                         of a TRANSPORTATION COMPANY, provided
                                         however, that this Section 3.g. shall
                                         not apply to INSURING CLAUSE 3.;

                                   h.    loss resulting from entries or changes
                                         made by a natural person with
                                         authorized access to a COMPUTER SYSTEM
                                         who acts in good faith on instructions,
                                         unless such instructions are given to
                                         that person by a software contractor or
                                         its partner, officer, or employee
                                         authorized by the ASSURED to design,
                                         develop, prepare, supply, service,
                                         write or implement programs for the
                                         ASSURED's COMPUTER SYSTEM; or

                                   i.    loss resulting directly or indirectly
                                         from the input of data into a COMPUTER
                                         SYSTEM terminal, either on the premises
                                         of the customer of the ASSURED or under
                                         the control of such a customer, by a
                                         customer or other person who had
                                         authorized access to the customer's
                                         authentication mechanism.

SPECIFIC EXCLUSIONS -        4.    THIS BOND DOES NOT DIRECTLY OR INDIRECTLY
APPLICABLE TO ALL INSURING         COVER:
CLAUSES EXCEPT INSURING
CLAUSES 1., 4., AND 5.             a.    loss resulting from the complete or
                                         partial non-payment of or default on
                                         any loan whether such loan was procured
                                         in good faith or through trick,
                                         artifice, fraud or false pretenses;
                                         provided, however, this Section 4.a.
                                         shall not apply to INSURING CLAUSE 8.;

                                   b.    loss resulting from forgery or any
                                         alteration;

                                   c.    loss involving a counterfeit provided,
                                         however, this Section 4.c. shall not
                                         apply to INSURING CLAUSE 5. or 6.

LIMIT OF LIABILITY/NON-      5.    At all times prior to termination of this
REDUCTION AND NON-                 Bond, this Bond shall continue in force for
ACCUMULATION OF LIABILITY          the limit stated in the applicable sections
                                   of ITEM 2. of the DECLARATIONS,
                                   notwithstanding any previous loss for which
                                   the COMPANY may have paid or be liable to pay
                                   under this Bond provided, however, that the
                                   liability of the COMPANY under this Bond with
                                   respect to all loss resulting from:

                                   a.    any one act of burglary, robbery or
                                         hold-up, or attempt thereat, in which
                                         no EMPLOYEE is concerned or implicated,
                                         or

                                   b.    any one unintentional or negligent act
                                         on the part of any one person resulting
                                         in damage to or destruction or
                                         misplacement of PROPERTY, or

                                   c.    all acts, other than those specified in
                                         a. above, of any one person, or

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 13 of 19



CONDITIONS AND
LIMITATIONS

LIMIT OF LIABILITY/NON-            d.    any one casualty or event other than
REDUCTION AND NON-                 those specified in a., b., or c. above, shall
ACCUMULATION OF LIABILITY          be deemed to be one loss and shall be limited
(CONTINUED)                        to the applicable LIMIT OF LIABILITY stated
                                   in ITEM 2. of the DECLARATIONS of this Bond
                                   irrespective of the total amount of such loss
                                   or losses and shall not be cumulative in
                                   amounts from year to year or from period to
                                   period.

                                   All acts, as specified in c. above, of any
                                   one person which

                                   i.    directly or indirectly aid in any way
                                         wrongful acts of any other person or
                                         persons, or

                                   ii.   permit the continuation of wrongful
                                         acts of any other person or persons

                                   whether such acts are committed with or
                                   without the knowledge of the wrongful acts of
                                   the person so aided, and whether such acts
                                   are committed with or without the intent to
                                   aid such other person, shall be deemed to be
                                   one loss with the wrongful acts of all
                                   persons so aided.

DISCOVERY                    6.    This Bond applies only to loss first
                                   discovered by an officer of the ASSURED
                                   during the BOND PERIOD. Discovery occurs at
                                   the earlier of an officer of the ASSURED
                                   being aware of:

                                   a.    facts which may subsequently result in
                                         a loss of a type covered by this Bond,
                                         or

                                   b.    an actual or potential claim in which
                                         it is alleged that the ASSURED is
                                         liable to a third party,

                                   regardless of when the act or acts causing or
                                   contributing to such loss occurred, even
                                   though the amount of loss does not exceed the
                                   applicable DEDUCTIBLE AMOUNT, or the exact
                                   amount or details of loss may not then be
                                   known.

NOTICE TO COMPANY -          7.    a.    The ASSURED shall give the COMPANY
PROOF - LEGAL PROCEEDINGS                notice thereof at the earliest
AGAINST COMPANY                          practicable moment, not to exceed sixty
                                         (60) days after discovery of loss, in
                                         an amount that is in excess of 50% of
                                         the applicable DEDUCTIBLE AMOUNT, as
                                         stated in ITEM 2. of the DECLARATIONS.

                                   b.    The ASSURED shall furnish to the
                                         COMPANY proof of loss, duly sworn to,
                                         with full particulars within six (6)
                                         months after such discovery.

                                   c.    Securities listed in a proof of loss
                                         shall be identified by certificate or
                                         bond numbers, if issued with them.

                                   d.    Legal proceedings for the recovery of
                                         any loss under this Bond shall not be
                                         brought prior to the expiration of
                                         sixty (60) days after the proof of loss
                                         is filed with the COMPANY or after the
                                         expiration of twenty-four (24) months
                                         from the discovery of such loss.

                                   e.    This Bond affords coverage only in
                                         favor of the ASSURED. No claim, suit,
                                         action or legal proceedings shall be
                                         brought under this Bond by anyone other
                                         than the ASSURED.

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 14 of 19



CONDITIONS AND
LIMITATIONS

NOTICE TO COMPANY -                f.    Proof of loss involving VOICE INITIATED
PROOF - LEGAL PROCEEDINGS                FUNDS TRANSFER INSTRUCTION shall
AGAINST COMPANY                          include electronic recordings of such
(CONTINUED)                              instructions.

DEDUCTIBLE AMOUNT            8.    The COMPANY shall not be liable under any
                                   INSURING CLAUSES of this Bond on account of
                                   loss unless the amount of such loss, after
                                   deducting the net amount of all reimbursement
                                   and/or recovery obtained or made by the
                                   ASSURED, other than from any Bond or policy
                                   of insurance issued by an insurance company
                                   and covering such loss, or by the COMPANY on
                                   account thereof prior to payment by the
                                   COMPANY of such loss, shall exceed the
                                   DEDUCTIBLE AMOUNT set forth in ITEM 3. of the
                                   DECLARATIONS, and then for such excess only,
                                   but in no event for more than the applicable
                                   LIMITS OF LIABILITY stated in ITEM 2. of the
                                   DECLARATIONS.

                                   There shall be no deductible applicable to
                                   any loss under INSURING CLAUSE 1. sustained
                                   by any INVESTMENT COMPANY.

VALUATION                    9.    BOOKS OF ACCOUNT OR OTHER RECORDS

                                   The value of any loss of PROPERTY consisting
                                   of books of account or other records used by
                                   the ASSURED in the conduct of its business
                                   shall be the amount paid by the ASSURED for
                                   blank books, blank pages, or other materials
                                   which replace the lost books of account or
                                   other records, plus the cost of labor paid by
                                   the ASSURED for the actual transcription or
                                   copying of data to reproduce such books of
                                   account or other records.

                                   The value of any loss of PROPERTY other than
                                   books of account or other records used by the
                                   ASSURED in the conduct of its business, for
                                   which a claim is made shall be determined by
                                   the average market value of such PROPERTY on
                                   the business day immediately preceding
                                   discovery of such loss provided, however,
                                   that the value of any PROPERTY replaced by
                                   the ASSURED with the consent of the COMPANY
                                   and prior to the settlement of any claim for
                                   such PROPERTY shall be the actual market
                                   value at the time of replacement.

                                   In the case of a loss of interim
                                   certificates, warrants, rights or other
                                   securities, the production of which is
                                   necessary to the exercise of subscription,
                                   conversion, redemption or deposit privileges,
                                   the value of them shall be the market value
                                   of such privileges immediately preceding
                                   their expiration if said loss is not
                                   discovered until after their expiration. If
                                   no market price is quoted for such PROPERTY
                                   or for such privileges, the value shall be
                                   fixed by agreement between the parties. OTHER
                                   PROPERTY

                                   The value of any loss of PROPERTY, other than
                                   as stated above, shall be the actual cash
                                   value or the cost of repairing or replacing
                                   such PROPERTY with PROPERTY of like quality
                                   and value, whichever is less.

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 15 of 19



CONDITIONS AND
LIMITATIONS
(CONTINUED)

SECURITIES SETTLEMENT        10.   In the event of a loss of securities covered
                                   under this Bond, the COMPANY may, at its sole
                                   discretion, purchase replacement securities,
                                   tender the value of the securities in money,
                                   or issue its indemnity to effect replacement
                                   securities.

                                   The indemnity required from the ASSURED under
                                   the terms of this Section against all loss,
                                   cost or expense arising from the replacement
                                   of securities by the COMPANY'S indemnity
                                   shall be:

                                   a.    for securities having a value less than
                                         or equal to the applicable DEDUCTIBLE
                                         AMOUNT - one hundred (100%) percent;

                                   b.    for securities having a value in excess
                                         of the DEDUCTIBLE AMOUNT but within the
                                         applicable LIMIT OF LIABILITY - the
                                         percentage that the DEDUCTIBLE AMOUNT
                                         bears to the value of the securities;

                                   c.    for securities having a value greater
                                         than the applicable LIMIT OF LIABILITY
                                         - the percentage that the DEDUCTIBLE
                                         AMOUNT and portion in excess of the
                                         applicable LIMIT OF LIABILITY bears to
                                         the value of the securities.

                                   The value referred to in Section 10.a., b.,
                                   and c. is the value in accordance with
                                   Section 9, VALUATION, regardless of the value
                                   of such securities at the time the loss under
                                   the COMPANY'S indemnity is sustained.

                                   The COMPANY is not required to issue its
                                   indemnity for any portion of a loss of
                                   securities which is not covered by this Bond;
                                   however, the COMPANY may do so as a courtesy
                                   to the ASSURED and at its sole discretion.
                                   The ASSURED shall pay the proportion of the
                                   Company's premium charge for the Company's
                                   indemnity as set forth in Section 10.a., b.,
                                   and c. No portion of the LIMIT OF LIABILITY
                                   shall be used as payment of premium for any
                                   indemnity purchased by the ASSURED to obtain
                                   replacement securities.

SUBROGATION - ASSIGNMENT -   11.   In the event of a payment under this Bond,
RECOVERY                           the COMPANY shall be subrogated to all of the
                                   ASSURED'S rights of recovery against any
                                   person or entity to the extent of such
                                   payment. On request, the ASSURED shall
                                   deliver to the COMPANY an assignment of the
                                   ASSURED'S rights, title and interest and
                                   causes of action against any person or entity
                                   to the extent of such payment.

                                   Recoveries, whether effected by the COMPANY
                                   or by the ASSURED, shall be applied net of
                                   the expense of such recovery in the following
                                   order:

                                   a.    first, to the satisfaction of the
                                         ASSURED'S loss which would otherwise
                                         have been paid but for the fact that it
                                         is in excess of the applicable LIMIT OF
                                         LIABILITY,

                                   b.    second, to the COMPANY in satisfaction
                                         of amounts paid in settlement of the
                                         ASSURED'S claim,

                                   c.    third, to the ASSURED in satisfaction
                                         of the applicable DEDUCTIBLE AMOUNT,
                                         and

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 16 of 19



CONDITIONS AND
LIMITATIONS

SUBROGATION - ASSIGNMENT -         d.    fourth, to the ASSURED in satisfaction
RECOVERY                                 of any loss suffered by the ASSURED
(CONTINUED)                              which was not covered under this Bond.

                                   Recovery from reinsurance or indemnity of the
                                   COMPANY shall not be deemed a recovery under
                                   this section.

COOPERATION OF ASSURED       12.   At the COMPANY'S request and at reasonable
                                   times and places designated by the COMPANY,
                                   the ASSURED shall:

                                   a.    submit to examination by the COMPANY
                                         and subscribe to the same under oath,

                                   b.    produce for the COMPANY'S examination
                                         all pertinent records, and

                                   c.    cooperate with the COMPANY in all
                                         matters pertaining to the loss.

                                   The ASSURED shall execute all papers and
                                   render assistance to secure to the COMPANY
                                   the rights and causes of action provided for
                                   under this Bond. The ASSURED shall do nothing
                                   after loss to prejudice such rights or causes
                                   of action.

TERMINATION                  13.   If the Bond is for a sole ASSURED, it shall
                                   not be terminated unless written notice shall
                                   have been given by the acting party to the
                                   affected party and to the Securities and
                                   Exchange Commission, Washington, D.C., not
                                   less than sixty (60) days prior to the
                                   effective date of such termination.

                                   If the Bond is for a joint ASSURED, it shall
                                   not be terminated unless written notice shall
                                   have been given by the acting party to the
                                   affected party, and by the COMPANY to all
                                   ASSURED INVESTMENT COMPANIES and to the
                                   Securities and Exchange Commission,
                                   Washington, D.C., not less than sixty (60)
                                   days prior to the effective date of such
                                   termination.

                                   This Bond will terminate as to any one
                                   ASSURED, other than an INVESTMENT COMPANY:

                                   a.    immediately on the taking over of such
                                         ASSURED by a receiver or other
                                         liquidator or by State or Federal
                                         officials, or

                                   b.    immediately on the filing of a petition
                                         under any State or Federal statute
                                         relative to bankruptcy or
                                         reorganization of the ASSURED, or
                                         assignment for the benefit of creditors
                                         of the ASSURED, or

                                   c.    immediately upon such ASSURED ceasing
                                         to exist, whether through merger into
                                         another entity, disposition of all of
                                         its assets or otherwise.

                                   The COMPANY shall refund the unearned premium
                                   computed at short rates in accordance with
                                   the standard short rate cancellation tables
                                   if terminated by the ASSURED or pro rata if
                                   terminated for any other reason.

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 17 of 19



CONDITIONS AND
LIMITATIONS

TERMINATION                        If any partner, director, trustee, or officer
(CONTINUED)                        or supervisory employee of an ASSURED not
                                   acting in collusion with an EMPLOYEE learns
                                   of any dishonest act committed by such
                                   EMPLOYEE at any time, whether in the
                                   employment of the ASSURED or otherwise,
                                   whether or not such act is of the type
                                   covered under this Bond, and whether against
                                   the ASSURED or any other person or entity,
                                   the ASSURED:

                                   a.    shall immediately remove such EMPLOYEE
                                         from a position that would enable such
                                         EMPLOYEE to cause the ASSURED to suffer
                                         a loss covered by this Bond; and

                                   b.    within forty-eight (48) hours of
                                         learning that an EMPLOYEE has committed
                                         any dishonest act, shall notify the
                                         COMPANY, of such action and provide
                                         full particulars of such dishonest act.

                                   The COMPANY may terminate coverage as
                                   respects any EMPLOYEE sixty (60) days after
                                   written notice is received by each ASSURED
                                   INVESTMENT COMPANY and the Securities and
                                   Exchange Commission, Washington, D.C. of its
                                   desire to terminate this Bond as to such
                                   EMPLOYEE.

OTHER INSURANCE              14.   Coverage under this Bond shall apply only as
                                   excess over any valid and collectible
                                   insurance, indemnity or suretyship obtained
                                   by or on behalf of:

                                   a.    the ASSURED,

                                   b.    a TRANSPORTATION COMPANY, or

                                   c.    another entity on whose premises the
                                         loss occurred or which employed the
                                         person causing the loss or engaged the
                                         messenger conveying the PROPERTY
                                         involved.

CONFORMITY                   15.   If any limitation within this Bond is
                                   prohibited by any law controlling this Bond's
                                   construction, such limitation shall be deemed
                                   to be amended so as to equal the minimum
                                   period of limitation provided by such law.

CHANGE OR MODIFICATION       16.   This Bond or any instrument amending or
                                   affecting this Bond may not be changed or
                                   modified orally. No change in or modification
                                   of this Bond shall be effective except when
                                   made by written endorsement to this Bond
                                   signed by an authorized representative of the
                                   COMPANY.

                                   If this Bond is for a sole ASSURED, no change
                                   or modification which would adversely affect
                                   the rights of the ASSURED shall be effective
                                   prior to sixty (60) days after written notice
                                   has been furnished to the Securities and
                                   Exchange Commission, Washington, D.C., by the
                                   acting party.

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 18 of 19



CONDITIONS AND
LIMITATIONS

CHANGE OR MODIFICATION             If this Bond is for a joint ASSURED, no
(CONTINUED)                        charge or modification which would adversely
                                   affect the rights of the ASSURED shall be
                                   effective prior to sixty (60) days after
                                   written notice has been furnished to all
                                   insured INVESTMENT COMPANIES and to the
                                   Securities and Exchange Commission,
                                   Washington, D.C., by the COMPANY.

ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 19 of 19



                                                               ENDORSEMENT/RIDER

Effective date of
this endorsement/rider: May 15, 2008            FEDERAL INSURANCE COMPANY
                                                Endorsement/Rider No. 1
                                                To be attached to and
                                                form a part of Bond No. 82052990

Issued to: FLAHERTY & CRUMRINE / CLAYMORE PREFERRED
               SECURITIES INCOME FUND
      DELETING VALUATION-OTHER PROPERTY AND AMENDING CHANGE OR MODIFICATION
                                   ENDORSEMENT

In consideration of the premium charged, it is agreed that this Bond is amended
as follows:

1.    The paragraph titled Other Property in Section 9, Valuation, is deleted in
      its entirety.

2.    The third paragraph in Section 16, Change or Modification, is deleted in
      its entirety and replaced with the following:

      If this Bond is for a joint ASSURED, no change or modification which would
      adversely affect the rights of the ASSURED shall be effective prior to
      sixty (60) days after written notice has been furnished to all insured
      INVESTMENT COMPANIES and the Securities and Exchange Commission,
      Washington, D.C., by the COMPANY.

The title and any headings in this endorsement/rider are solely for convenience
and form no part of the terms and conditions of coverage.

All other terms, conditions and limitations of this Bond shall remain unchanged.

/S/ ROBERT HAMBURGER
    AUTHORIZED REPRESENTATIVE

17-02-2437 (12/2006) rev.

Page 1



Effective date of
this endorsement: May 15, 2008         FEDERAL INSURANCE COMPANY
                                       Endorsement No.: 2
                                       To be attached to and form a part of Bond
                                       Number: 82052990

Issued to: FLAHERTY & CRUMRINE / CLAYMORE PREFERRED
              SECURITIES INCOME FUND

                    COMPLIANCE WITH APPLICABLE TRADE SANCTION LAWS RIDER

It is agreed that this insurance does not apply to the extent that trade or
economic sanctions or other laws or regulations prohibit the coverage provided
by this insurance.

ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.

Date: May 22, 2008

/S/ ROBERT HAMBURGER
    AUTHORIZED REPRESENTATIVE

Form 14-02-9228 (Ed. 4/2004)



                                                       FEDERAL INSURANCE COMPANY
                                                       Endorsement No: 3
                                                       Bond Number: 82052990

NAME OF ASSURED: FLAHERTY & CRUMRINE / CLAYMORE PREFERRED
                    SECURITIES INCOME FUND

                               PREMIUM ENDORSEMENT

It is agreed that:

1.    The premium for this Bond for the period May 15, 2008 to May 15, 2009 is:

      Premium: Four Thousand Two Hundred Dollars ($4,200.00)

2.    It is further agreed that this premium is subject to change during this
      period if amendments are made to this Bond at the request of the ASSURED.

This Endorsement applies to loss discovered after 12:01 a.m. on May 15, 2008.

ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.

Date: May 22, 2008

/S/ ROBERT HAMBURGER
    AUTHORIZED REPRESENTATIVE

ICAP Bond

Form 17-02-0735 (Rev. 1-97)



                       IMPORTANT POLICYHOLDER INFORMATION

Inquiries concerning your policy should be directed to your insurance agent. The
name, address and telephone number of your agent, if one is involved, is shown
on the policy and/or in the material accompanying the policy.

If you require additional information you may contact the California Insurance
Department at either the following address or phone number:

                                                California Insurance Department
                                                300 South Spring Street
                                                Los Angeles, CA 90012
                                                1-800-927-HELP

Form 14-02-1495 (Ed. 1/94)



                                IMPORTANT NOTICE

The premium shown on this policy or premium statement may be subject to
adjustment in accordance with the provisions of California law recently adopted
by ballot initiative. You will be informed about any adjustment as soon as the
requirements of the law and their effect on your premium can be determined.

Form 99-10-0267 (Ed. 2/98)



                                  POLICYHOLDER
                              DISCLOSURE NOTICE OF
                          TERRORISM INSURANCE COVERAGE
             (FOR POLICIES WITH NO TERRORISM EXCLUSION OR SUBLIMIT)

You are hereby notified that, under the Terrorism Risk Insurance Act (the
"Act"), effective December 26, 2007, this policy makes available to you
insurance for losses arising out of certain acts of terrorism. Terrorism is
defined as any act certified by the Secretary of the Treasury, in concurrence
with the Secretary of State and the Attorney General of the United States, to be
an act of terrorism; to be a violent act or an act that is dangerous to human
life, property or infrastructure; to have resulted in damage within the United
States, or outside the United States in the case of an air carrier or vessel or
the premises of a United States Mission; and to have been committed by an
individual or individuals as part of an effort to coerce the civilian population
of the United States or to influence the policy or affect the conduct of the
United States Government by coercion.

You should know that the insurance provided by your policy for losses caused by
acts of terrorism is partially reimbursed by the United States under the formula
set forth in the Act. Under this formula, the United States pays 85% of covered
terrorism losses that exceed the statutorily established deductible to be paid
by the insurance company providing the coverage.

However, if aggregate insured losses attributable to terrorist acts certified
under the Act exceed $100 billion in a Program Year (January 1 through December
31), the Treasury shall not make any payment for any portion of the amount of
such losses that exceeds $100 billion.

10-02-1281 (Ed. 1/2003)



If aggregate insured losses attributable to terrorist acts certified under the
Act exceed $100 billion in a Program Year (January 1 through December 31) and we
have met our insurer deductible under the Act, we shall not be liable for the
payment of any portion of the amount of such losses that exceeds $100 billion,
and in such case insured losses up to that amount are subject to pro rata
allocation in accordance with procedures established by the Secretary of the
Treasury.

The portion of your policy's annual premium that is attributable to insurance
for such acts of terrorism is: $ -0-.

If you have any questions about this notice, please contact your agent or
broker.

10-02-1281 (Ed. 1/2003)



                                                               IMPORTANT NOTICE:

THE SEC REQUIRES PROOF OF YOUR FIDELITY INSURANCE POLICY

Your company is now required to file an electronic copy of your fidelity
insurance coverage (Chubb's ICAP Bond policy) to the Securities and Exchange
Commission (SEC), according to rules adopted by the SEC on June 12, 2006.

Chubb is in the process of providing your agent/broker with an electronic copy
of your insurance policy as well as instructions on how to submit this proof of
fidelity insurance coverage to the SEC. You can expect to receive this
information from your agent/broker shortly.

The electronic copy of your policy is provided by Chubb solely as a convenience
and does not affect the terms and conditions of coverage as set forth in the
paper policy you receive by mail. The terms and conditions of the policy mailed
to you, which are the same as those set forth in the electronic copy, constitute
the entire agreement between your company and Chubb.

If you have any questions, please contact your agent or broker.

Form 14-02-12160 (ed. 7/2006)



                        IMPORTANT NOTICE TO POLICYHOLDERS

      All of the members of the Chubb Group of Insurance companies doing
business in the United States (hereinafter "Chubb") distribute their products
through licensed insurance brokers and agents ("producers"). Detailed
information regarding the types of compensation paid by Chubb to producers on US
insurance transactions is available under the Producer Compensation link located
at the bottom of the page at www.chubb.com, or by calling 1-866-588-9478.
Additional information may be available from your producer.

      Thank you for choosing Chubb.

10-02-1295 (ed. 5/2007)



THE  FOLLOWING  RESOLUTIONS  WERE  ADOPTED AT THE APRIL 18, 2008  MEETING OF THE
BOARD OF DIRECTORS OF FLAHERTY & CRUMRINE/CLAYMORE  PREFERRED  SECURITIES INCOME
FUND  INCORPORATED  AT WHICH A MAJORITY  OF  DIRECTORS  WHO ARE NOT  "INTERESTED
PERSONS"  APPROVED  THE AMOUNT AND FORM OF THE CURRENT  BOND FOR THE PERIOD FROM
MAY 15, 2008 TO MAY 15, 2009:


           RESOLVED:  That the renewal of the  fidelity  bond  coverage for
                      the period from May 15, 2008 to May 15,  2009,  which
                      provides   coverage  in  the   aggregate   amount  of
                      $1,500,000, is hereby approved; and further

           RESOLVED:  That  it is the  finding  of the  Directors  at  this
                      Meeting  that the fidelity  bond (the "Bond")  issued
                      through  Chubb Group of  Insurance  Companies  in the
                      amount of $1,500,000  covering officers and employees
                      of the Fund, in accordance  with the  requirements of
                      Rule 17g-1 under the Investment  Company Act of 1940,
                      as amended (the "1940 Act"),  is  reasonable  in form
                      and amount,  after having given due consideration to,
                      among other things, the value of the aggregate assets
                      of the Fund to which  any  person  covered  under the
                      Bond may have access,  the custody and safekeeping of
                      the assets of the Fund's portfolio, and the nature of
                      the securities in the Fund's portfolio; and further

           RESOLVED:  That a Special  Committee of the Board of  Directors,
                      consisting  of Mr.  Wulf  and Mr.  Crumrine  be,  and
                      hereby   is,   established   for  the   purposes   of
                      determining   the  Fund's   fidelity  bond  insurance
                      coverage and related premiums for the period from May
                      15, 2008 to May 15, 2009, such  determinations  to be
                      based upon information reviewed by and recommended by
                      Fund management; and further.

           RESOLVED:  That the appropriate  officers of the Fund are hereby
                      authorized  and directed to take such other action as
                      may from time to time be necessary or  appropriate in
                      order to  conform to the  provisions  of the 1940 Act
                      and the rules and  regulations  under  that Act;  and
                      further

           RESOLVED:  That the Secretary or Assistant Secretary of the Fund
                      shall make such filings  concerning the Bond with the
                      Securities and Exchange  Commission  ("SEC") and give
                      such notices as required under  paragraph (g) of Rule
                      17g-1 promulgated by the SEC under the 1940 Act.

THE  FOLLOWING  RESOLUTIONS  WERE  ADOPTED  AT THE MAY 14,  2008  MEETING OF THE
SPECIAL  COMMITTEE  OF THE BOARD OF  DIRECTORS  OF FLAHERTY &  CRUMRINE/CLAYMORE
PREFERRED  SECURITIES INCOME FUND INCORPORATED AT WHICH THE DIRECTORS COMPRISING
THE SPECIAL  COMMITTEE  APPROVED THE COVERAGE AND RELATED  PREMIUM IN CONNECTION
WITH THE CURRENT BOND FOR THE PERIOD FROM MAY 15, 2008 TO MAY 15, 2009:

           RESOLVED:  That the renewal of the  fidelity  bond  coverage for
                      the period from May 15, 2008 to May 15,  2009,  which
                      provides   coverage  in  the   aggregate   amount  of
                      $1,500,000, is hereby approved; and further



           RESOLVED:  That  it is the  finding  of the  Directors  at  this
                      Meeting  that the fidelity  bond (the "Bond")  issued
                      through  Chubb Group of  Insurance  Companies  in the
                      amount of $1,500,000  covering officers and employees
                      of the Fund, in accordance  with the  requirements of
                      Rule 17g-1 under the Investment  Company Act of 1940,
                      as amended (the "1940 Act"),  is  reasonable  in form
                      and amount,  after having given due consideration to,
                      among other things, the value of the aggregate assets
                      of the Fund to which  any  person  covered  under the
                      Bond may have access,  the custody and safekeeping of
                      the assets of the Fund's portfolio, and the nature of
                      the securities in the Fund's portfolio; and further

           RESOLVED:  That the  premium in the amount of $4,200 paid by the
                      Fund under the Bond is hereby authorized; and further

           RESOLVED:  That the appropriate  officers of the Fund are hereby
                      authorized  and directed to take such other action as
                      may from time to time be necessary or  appropriate in
                      order to  conform to the  provisions  of the 1940 Act
                      and the rules and  regulations  under  that Act;  and
                      further

           RESOLVED:  That the Secretary or Assistant Secretary of the Fund
                      shall make such filings  concerning the Bond with the
                      Securities and Exchange  Commission  ("SEC") and give
                      such notices as required under  paragraph (g) of Rule
                      17g-1 promulgated by the SEC under the 1940 Act.