PAGE 19

Information About Accounts in T.   Rowe Price Funds 2

As a T.   Rowe Price shareholder, you will want to know about the following policies and procedures that apply to the T.   Rowe Price family of stock, bond, and money funds.

Pricing Shares and Receiving Sale Proceeds

How and W hen S hares A re P riced

The share price (also called "net asset value" or NAV per share) for all funds except the Japan Fund is calculated at the close of the New York Stock Exchange, normally 4 p.m. ET, each day that the exchange is open for busi ness. (See the following section for information on the Japan Fund.) To calculate the NAV, the fund`s assets are valued and totaled, liabilities are subtracted, and the balance, called net assets, is divided by the number of shares outstanding. Market values are used to price stocks and bonds. Market values represent the prices at which secu rities actually trade or evaluations based on the judgment of the fund`s pricing services. If a market value for a security is not available, the fund will make a good faith effort to assign a fair value to the security. This value may differ from the value the fund receives upon sale of the securities. Amortized cost is used to price securities held by money funds. Investments in mutual funds are valued at the closing NAV per share of the mutual fund on the day of valuation.

Non-U.S. equity securities are valued on the basis of the ir most recent closing market prices at 4 p.m. ET except under the circumstances described below . Most foreign markets close before 4 p.m . ET . For securities primarily traded in the Far East, for example, the most recent closing prices may be as much as 15   hours old at 4   p.m. ET . If a fund determines that developments between the close of the foreign market and 4 p.m. ET will, in its judg ment, materially affect the value of some or all of the fund`s securities, the fund will adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of 4   p.m. ET. In deciding whether to make these adjustments, the fund reviews a variety of factors, including developments in foreign markets, the perfor mance of U.S. securities markets , and the performance of instruments trading in U.S. markets that represent for eign securities and baskets of foreign securities . A fund may also fair value securities in other situations, for example, when a particular foreign market is closed but the fund is open. The fund uses outside pricing services to provide it with closing market prices and information used for adjusting those prices. The fund cannot predict how often it will use closing prices and how often it will adjust those prices. As a means of evaluating its fair value process, the fund routinely compares closing market prices, the next day`s opening prices in the same markets, and adjusted prices. Other mutual funds may adjust the prices of their securities by different amounts.

The various ways you can buy, sell, and exchange shares are explained at the end of this prospectus and on the New Account Form. These procedures may differ for institutional and employer-sponsored retirement accounts or if you hold your account through an intermediary .

How Y our P urchase, S ale, or E xchange P rice I s D etermined

If we receive your request in correct form by 4 p.m. ET, your transaction will be priced at that business day`s NAV. If we receive it after 4 p.m. ET , it will be priced at the next business day`s NAV.

We cannot accept orders that request a particular day or price for your transaction or any other special condi tions.

Fund shares may be purchased through various third-party intermediaries including banks, brokers, and invest ment advisers. Where authorized by a fund, orders will be priced at the NAV next computed after receipt by the intermediary. Consult your intermediary to determine when your orders will be priced. The intermediary may charge a fee for its services.

When authorized by the fund, certain financial institutions or retirement plans purchasing fund shares on behalf of customers or plan participants through Financial Institution Services or Retirement Plan Services may place a purchase order unaccompanied by payment . Payment for these shares must be received by the time designated

by the fund (not to exceed the period established for settlement under applicable regulations). If payment is not received by this time, the order may be canceled. The financial institution or retirement plan is responsible for any costs or losses incurred by the fund or T. Rowe Price if payment is delayed or not received.

Note: The time at which transactions and shares are priced and the time until which orders are accepted may be changed in case of an emergency or if the New York Stock Exchange closes at a time other than 4 p.m. ET.

Japan Fund: Pricing and Transactions

The Japan Fund`s share price is calculated at the close of the New York Stock Exchange, normally 4 p.m. ET, on days when both it and the Tokyo Stock Exchange are open. The fund will not price shares or process orders on any day when either the New York or Tokyo Stock Exchange is closed. Orders received on such days will be processed the next day the fund computes a NAV. As a result , you may experience a delay in purchasing or redeeming fund shares.

Exchanges: If you wish to exchange into the Japan Fund on a day the New York Stock Exchange is open but the Tokyo Stock Exchange is closed, the exchange out of the other T.   Rowe Price fund will be processed on that day, but Japan Fund shares will not be purchased until the day the Japan Fund reopens. If you wish to exchange out of the Japan Fund on a day when the New York Stock Exchange is open but the Tokyo Stock Exchange is closed, the exchange will be delayed until the Japan Fund reopens.

The Tokyo Stock Exchange is scheduled to be closed on the following days: In 200 7 — January 1 , 2, 3 and 8 ; Feb ruary 1 2 ; March 2 1 ; April 30 ; May 3, 4, and 5 ; July 16 ; September 17 and 2 4 ; October 8 ; November 3 and 2 3 ; and Decemb er   2 4 and 31 . In 200 8 — January 1 , 2, 3, and 14 ; February 11; March 2 0 ; April 29; May   3, 4, and 6 ; July   21 ; September 1 5 and 23; October 13 ; November 3 and 2 4 ; and December   23 and 31 . If the Tokyo Stock Exchange closes on dates not listed, the fund will not be priced on those dates.

How Y ou C an R eceive the P roceeds F rom a S ale

When filling out the New Account Form, you may wish to give yourself the widest range of options for receiving proceeds from a sale.

If your request is received by 4 p.m. ET (on a business day) in correct form, proceeds are usually sent on the next business day. Proceeds can be sent to you by mail or to your bank account by Automated Clearing House (ACH) transfer or bank wire. ACH is an automated method of initiating payments from, and receiving payments in, your financial institution account. Proceeds sent by ACH transfer are usually credited the second business day after the sale. Proceeds sent by bank wire should be credited to your account the first business day after the sale.

Exception:     Under certain circumstances and when deemed to be in a fund`s best interest, your proceeds may not be sent for up to seven calendar days after we receive your redemption request.

If for some reason we cannot accept your request to sell shares, we will contact you.

Contingent Redemption Fee

Short-term trading can disrupt a fund`s investment program and create additional costs for long-term sharehold ers. For these reasons, certain T.   Rowe Price funds, listed below, assess a fee on redemptions (including exchanges) , which reduces the proceeds from such redemptions by the amounts indicated:

<R>

T. Rowe Price Funds With Redemption Fees
Fund	Redemption fee	Holding period
Africa & Middle East	2%	90 days or less
Developing Technologies	1%	90 days or less
Diversified Small-Cap Growth	1%	90 days or less
Emerging Europe & Mediterranean	2 %	90 days or less
Emerging Markets Bond	2%	90 days or less
Emerging Markets Stock	2 %	90 days or less
Equity Index 500	0 .5 %	90 days or less
European Stock	2%	90 days or less
Extended Equity Market Index	0 .5 %	90 days or less
Global Stock	2%	90 days or less
High Yield	1%	90 days or less
International Bond	2%	90 days or less
International Discovery	2 %	90 days or less
International Equity Index	2 %	90 days or less
International Growth & Income	2%	90 days or less
International Stock	2%	90 day s or less
Japan	2%	90 days or less
Latin America	2 %	90 days or less
New Asia	2%	90 days or less
Overseas Stock	2%	90 days or less
Real Estate	1 %	90 days or less
Small-Cap Value	1 %	90 days or less
Spectrum International	2%	90 days or less
Tax-Efficient Balanced	1 %	less than 365 days
Tax-Efficient Growth	1 %	less than 365 days
Tax-Efficient Multi-Cap Growth	1 %	less than 365 days
Total Equity Market Index	0 .5 %	90 days or less
U.S. Bond Index	0 .5 %	90 days or less

</R>

PAGE 21

Redemption fees are paid to a fund to deter short-term trading, offset costs, and protect the fund`s long-term shareholders. Subject to the exceptions described on the following pages, a ll persons holding shares of a T.   Rowe Price fund that imposes a redemption fee are subject to the fee , whether the person is holding shares directly with a T.   R owe Price fund, through a retirement plan for which T.   Rowe Price serves as recordkeeper, or indirectly through an intermediary, such as a broker, bank, investment adviser, recordkeeper for retirement plan partici pants, or any other third party .

Computation of H olding P eriod

W hen an investor sells shares of a fund that assesses a redemption fee, T.   Rowe Price will use the "first-in, first- out" (FIFO) method to determine the holding period for the shares sold. Under this method, the date of redemp tion or exchange will be compared with the earliest purchase date of shares held in the account. For funds with a 365-day holding period, a redemption fee will be charged on shares sold before the end of the required holding period. For funds with a 90-day holding period, a redemption fee will be charged on shares sold on or before the end of the required holding period. For example, if you redeem your shares on or before the 90th day from the date of purchase, you will be assessed the redemption fee. If you purchase shares through an intermediary, consult your intermediary to determine how the holding period will be applied.

Transactions N ot S ubject to R edemption F ees

The T. Rowe Price funds will not assess a redemption fee with respect to certain transactions. As of the date of this prospectus , the following shares of T.   Rowe Price funds will not be subject to redemption fees:

1. Shares redeemed via a n automated systematic withdrawal plan ;

2. Shares redeemed through or used to establish a systematic , nondiscretionary rebalancing or asset alloca tion program , if approved in writing by T.   Rowe Price;

3. Shares purchased by the reinvestment of dividends or capital gain distributions; *

4. Shares converted from one share class to another share class of the same fund; *

5 . Shares redeemed by a fund ( e.g. , for failure to meet account minimums or to cover various fees , such as fiduciary fees) ;

6 . Shares purchased by rollover and changes of account registration within the same fund;*

7 . Shares redeemed to return an excess contribution in an IRA account;

8 . Shares purchased by a fund-of-fund s product, if approved in writing by T.   Rowe Price;

9 . Shares transferred to T.   Rowe Price or a third - party intermediary acting as a service provider when the age of the shares cannot be determined systematically ;*

PAGE 23

1 0 . Shares redeemed in retirement plans or other products that restrict trading to no more frequently than once per quarter , if approved in writing by T.   Rowe Price.

* Subsequent exchanges of these shares into funds that assess redemption fees will subject such shares to the fee.

Redemption F ees on S hares H eld in R etirement P lans

If shares are held in a retirement plan, generally redemption fees will be assessed on shares redeemed by exchange only if they were originally purchased by exchange. However, redemption fees may apply to transac tions other than exchanges depending on how shares of the plan are held at T.   Rowe Price or how the fees are applied by your plan`s recordkeeper. To determine which of your transactions are subject to redemption fees , you should contact T.   Rowe Price or your plan recordkeeper.

Omnibus A ccounts

If your shares are held through an intermediary in an omnibus account, T. Rowe Price relies on the intermediary to assess the redemption fee on underlying shareholder accounts. T. Rowe Price seeks to identify intermediaries establishing omnibus accounts and to enter into agreements requiring the intermediary to assess the redemption fees. There are no assurances that T. Rowe Price will be successful in identifying all intermediaries or that the intermediaries will properly assess the fees. Intermediaries who are unable to implement redemption fees due to system limitations must either (1) implement short-term trading restrictions approved by T.   Rowe Price until they have the system capabilities to assess the fees or (2) set forth an implementation plan acceptable to T.   Rowe Price.

Certain intermediaries may not apply the exemptions listed above to the redemption fee policy; all redemptions by persons trading through such intermediaries may be subject to the fee. Certain intermediaries may exempt transactions not listed above from redemption fees, if approved by T.   Rowe Price. Persons redeeming shares th r ough an intermediary should check with the ir respective intermediary to determine which transactions are subject to the fees.