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(a) an investment with not more than two percent original issue discount or original issue premium may be valued at its outstanding stated principal amount, plus accrued unpaid interest on such date; and (b) a fixed rate investment may be valued at its present value on such date; (c) an investment may be valued at its Fair Market Value on such date. (2) Special Rules. Yield restricted investments are to be valued at present value provided that (except for purposes of allocating Transferred Proceeds to an issue, for purposes of the Universal Cap and for investments in a commingled fund other than a bona fide debt service fund unless it is a certain commingled fund): (a) an investment must be valued at its Fair Market Value when it is first allocated to an issue, when it is disposed of and when it is deemed acquired or deemed disposed of, and provided further that: (b) in the case of Transferred Proceeds, the Value of a Nonpurpose Investment that is allocated to Transferred Proceeds of a refunding issue on a transfer date may not exceed the Value of that investment on the transfer date used for purposes of applying the arbitrage restrictions to the refunded issue. "Yield on the Note" or "Note Yield" means, for all Computation Dates, the Yield expected as of the date hereof on the Note over the term of such Note computed by: (i) using as the purchase price of the Note, the amount at which such Note was sold within the meaning of Sections 1273 and 1274 of the Code; and (ii) assuming that the Note will be paid at its scheduled maturity dates or in accordance with any mandatory redemption requirements. "Yield" means, generally, the discount rate which, when used in computing the present value of all the unconditionally payable payments of principal and interest on an obligation and all the payments for a qualified guarantee paid and to be paid with respect to such obligation, produces an amount equal to the present value of the issue price of such obligation. Present value is computed as of the date of issue of the obligation. There are, however, many additional specific rules contained in the Regulations which apply to the calculation and recalculation of yield for particular obligations and such rules should be consulted prior to calculating the yield for the Note on any Computation Date. Yield shall be calculated on a 360 -day year basis with interest compounded semi-annually. For this purpose the purchase price of a Nonpurpose Investment or a Tax -Exempt Investment is its Fair Market Value, as determined pursuant to Section 4 of this Statement, as of the date that it becomes allocated to Gross Proceeds of the Note. A-5