WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
Report Of Independent Auditors
To the Board of Directors of
FPA Paramount Fund, Inc.
In planning and performing our audit of the financial statements of FPA Paramount
Fund, Inc. (the "Fund") for the year ended September 30, 2000, we considered its
internal control, including control activities for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR, not to
provide assurance on internal control.
The management of the Fund is responsible for establishing and maintaining internal
control. In fulfilling this responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entitys objective of preparing
financial statements for external purposes that are fairly presented in conformity
with generally accepted accounting principles. Those controls include the
safeguarding of assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur and not
be detected. Also, projection of any evaluation of internal control to future periods
is subject to the risk that it may become inadequate because of changes in conditions
or that the effectiveness of the design and operation may deteriorate.
Our consideration of internal control would not necessarily disclose all matters in
internal control that might be material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material weakness is a
condition in which the design or operation of one or more of the internal control
components does not reduce to a relatively low level the risk that misstatements
caused by errors or fraud in amounts that would be material in relation to the
financial statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned functions.
However, we noted no matters involving internal control and its operation, including
controls for safeguarding securities, that we consider to be material weaknesses as
defined above as of September 30, 2000.
This report is intended solely for the information and use of management, the Board
of Directors of the Fund, and the Securities and Exchange Commission and is not
intended to be and should not be used by anyone other than these specified parties.
Los Angeles, California
October 27, 2000
</TABLE>
