<PAGE>
QUEST FOR VALUE
DUAL PURPOSE
FUND, INC.
One World Financial
Center
New York, NY 10281
1-800-600-5487
QUEST FOR VALUE
DUAL PURPOSE
FUND, INC. FEBRUARY 15, 1996
DEAR SHAREHOLDER:
In 1995, a favorable year for investors, the Dual Purpose
Fund provided a 29.3% total return on its portfolio,
compared with the 37.6% return of the Standard & Poor's
500 Index including dividends (S&P 500). The Fund's
holdings of common stocks significantly outperformed the
S&P 500. However, this was offset to some degree by our
use of hedging techniques in a rising market and by losses
on two yield-oriented investments. The Fund had a negative
total return of 0.1% on its portfolio in the fourth
quarter.
The Fund has a superior long-term performance record.
Since its inception on February 13, 1987, it has generated
a compound annual total return of 15.7% on its portfolio,
exceeding the 12.7% return of the S&P 500.
The Fund is a closed-end investment company with an equal
number of Capital Shares and Income Shares. Capital Shares
receive all the capital appreciation and absorb any losses
from the Fund's entire portfolio, while Income Shares
receive all net income. Both classes of shares performed
well in 1995, delivering market returns that exceeded
their respective benchmarks-- the S&P 500 Index in the
case of the Capital Shares and the 10-year Treasury
security maturing in February 1997 in the case of the
Income Shares.
CHANGE OF PORTFOLIO MANAGER
As discussed in our third quarter report, Jeffrey C.
Whittington, who managed the Fund from mid-1988 to
mid-1991, returned as portfolio manager on January 1,
1996. He is a Senior Vice President and senior equity
portfolio manager at Oppenheimer Capital, parent of OpCap
Advisors, formerly Quest for Value Advisors, investment
adviser to the Fund.
PORTFOLIO ACTIVITY
The Dual Purpose Fund invests in a diversified portfolio
of securities intended to generate both capital
appreciation and income. As of December 31, 1995, the
Fund's assets were allocated 81% to common stocks, 12% to
convertible securities, 9% to bonds and preferred stock,
and 3% to cash and equivalents, with 5% in other net
liabilities. We increased the Fund's holdings of common
stocks in the fourth quarter and reduced its cash
position.
The Fund's results in the year were driven primarily by
its major equity holdings, which continued to perform
extremely well. The common stocks in the Fund's portfolio
produced a total return of 47.5%, easily exceeding the
37.6% return for the S&P 500. We achieved these results
without any significant investments in technology stocks.
In the fourth quarter, the Fund's equity holdings had a
total return of 4.6%, compared with 6.0% for the S&P 500.
Many of the Fund's largest holdings, including Federal
Home Loan Mortgage Corp. (Freddie Mac) and McDonnell
Douglas Corp., rose sharply in 1995, reaching new highs in
the fourth quarter. The Fund's five largest equity
positions as of December 31, 1995, were Freeport McMoRan
Copper & Gold (Class A and B), Philip Morris Companies,
Inc., Mid Ocean Ltd., Federal Home Loan Mortgage Corp.
(Freddie Mac) and McDonnell Douglas Corp.
During the fourth quarter, we established major new
positions in the common stocks of UST, Inc., and Varity
Corp. and increased our investments in such stocks as EXEL
Ltd., Mid Ocean Ltd., Philip Morris Companies, Inc. and
Progressive Corp., Ohio. Equity positions that were
eliminated during the quarter included American Express
Co., Champion International Corp., Sprint Corp. and Tenet
Healthcare Corp.
<PAGE>
Starting in the 1995 first quarter, we made extensive use of hedging techniques
to control risk at a time of high market valuations. By the end of the third
quarter, 29.8% of the Fund's common stock holdings were hedged through the sale
of Standard & Poor's 500 Index futures. While the use of hedging reduced risk,
it dampened the Fund's returns in a rising market. We eliminated all hedges by
the end of the year.
In both the fourth quarter and the year, the Fund had a negative return on the
fixed-income and preferred stock segment of its portfolio due to a $20.7 million
realized and unrealized loss in the quarter on its holdings of Harrah's Jazz Co.
first mortgage notes.
In addition, our small position in convertible preferred stock had a negative
return in the quarter and the year due to the poor performance of Flagstar Cos.,
Inc., convertible preferred. The other equity-related segment of the portfolio,
our position in convertible bonds, provided a positive total return of 5.0% in
the fourth quarter and 31.5% in the year. The Fund's investments in bonds and
convertible securities are intended to generate income as well as provide
potential for appreciation.
CAPITAL SHARES
The Capital Shares are intended for investors seeking capital appreciation,
leverage and professional management at no cost (the management fees and
expenses of the Fund are paid out of current income by the Income Shareholders).
The net asset value (NAV) of the Capital Shares declined 1.2% in the fourth
quarter and advanced 36.7% in the year (adjusted for distributions and for
federal taxes paid on net realized long-term capital gains retained by the
Fund). The fourth quarter loss on the Harrah's Jazz Co. first mortgage notes
equaled 4.7% of the value of the Capital Shares.
The Capital Shares tend to exaggerate the performance of the total portfolio, up
or down, because of their leverage. At December 31, 1995, the Capital Shares had
an NAV of $33.65 each and were entitled to the capital appreciation or
depreciation on the entire net assets of the Fund, equal to $45.28 per Capital
Share--thereby magnifying changes in value, up or down, of the Fund's portfolio
by approximately 1.3 times.
The Capital Shares have provided returns well in excess of the S&P 500 over
extended periods. From the Fund's inception on February 13, 1987 through
December 31, 1995, they provided a compound annual pretax return of 18.2% (based
on the NAV, after adjustment for distributions and for federal taxes paid on net
realized long-term capital gains retained by the Fund), far outpacing the 12.7%
return of the S&P 500. This strong performance reflects a combination of
above-average investment returns and the impact of leverage.
The market price of the Capital Shares rose 3.7% in the 1995 fourth quarter and
45.6% in the year, adjusted for distributions and for federal taxes paid on net
realized long-term capital gains retained by the Fund. As of December 31, 1995,
the Capital Shares were priced at $31.875 per share on the New York Stock
Exchange, a 5.3% discount from NAV. The Capital Shares will be redeemable at
their full NAV and any remaining discount will automatically disappear after
January 31, 1997, when the Fund will either liquidate or, following a vote of
shareholders, convert to an open-end fund.
INCOME SHARES
The Income Shares are intended for investors seeking high current income and
relative safety of principal. They provided a total return (dividends paid and
change in market price assuming the reinvestment of dividends) of 2.2% in the
fourth quarter, exceeding the 2.0% total return of a 10-year Treasury security
maturing in February 1997. The total return of the Income Shares was 10.9% for
the year, surpassing the Treasury security's 10.1% return. From inception on
February 13, 1987 through December 31, 1995, the compound annual total return on
the Income Shares was 10.6% at market, assuming reinvestment of dividends, well
above the 7.9% compound return for a 10-year Treasury security maturing in
February 1997.
The Fund paid regular monthly dividends of $.10 per Income Share throughout
1995, plus extras of $.19 per share, for total payments of $1.39 per Income
Share. This compared with total payments of $1.34 per Income Share in 1994.
The Income Shares had a market price of $12.00 each at December 31, 1995. They
are scheduled to be redeemed on January 31, 1997 at $11.60 per share plus all
accumulated and unpaid income. That income will consist primarily of income
earned by the Fund in January 1997, since the Fund will declare a dividend in
December 1996 which will include almost all of the income, if any, earned but
not previously paid through year-end 1996.
<PAGE>
OUTLOOK
In 1995, prices of stocks rose sharply in an environment of declining interest
rates, low inflation, strong corporate profits and slow economic growth.
Although we are always cautious about making forecasts, recognizing that the
stock market is by nature unpredictable, we think the probabilities favor modest
gains in 1996. Earnings disappointments may become more prevalent after five
years of growth and expanding profit margins. We expect S&P 500 earnings to be
relatively flat, compared to an increase of about 15% in 1995, making stock
selection even more important. Even the long-term positive of a cut in the
capital gains tax could be a short-term negative if it triggers selling
postponed into 1996. However, we do not foresee the ingredients for a major bear
market, especially if inflation and short-term rates move lower, as now appears
likely. In fact, a sharp drop in short rates could unlock the large amounts of
assets in money market mutual funds, time deposits and certificates of deposit
and actually accelerate inflows into mutual funds.
We remain dedicated to preserving capital and generating favorable returns by
investing in undervalued quality securities, regardless of the market's overall
direction. The valuations of the companies owned by the Fund look reasonable and
we are still able to find attractively priced stocks, although doing so is more
difficult than it was a year ago.
As usual, a challenging year lies ahead. Thank you for investing with us at
Quest for Value. We will continue to work hard to serve your investment needs.
Sincerely,
/s/ Joseph M. La Motta
Joseph M. La Motta
President
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------
<S> <C>
REPURCHASE
AGREEMENT--2.6%
$ 21,386,000 Lehman Brothers 5.87%, 1/02/96,
(dated 12/29/95, proceeds at
maturity: $21,399,948,
collateralized by $21,245,000
par, $21,814,366 value, U.S.
Treasury Notes, 5.50%,
7/31/97)
(cost--$21,386,000)........... $ 21,386,000
------------
CORPORATE NOTES AND BONDS--7.9%
Casinos/Gaming--6.2%
$ 23,500,000 Harrah's Jazz Co.
First Mortgage Notes
14.25%, 11/15/01 (A).......... $ 6,462,500
19,000,000 Trump Holdings & Funding
Sr. Sub. Notes
15.50%, 6/15/05............... 20,330,000
23,000,000 Trump Plaza Funding
First Mortgage Notes
10.875%, 6/15/01.............. 23,805,000
------------
50,597,500
------------
Oil/Gas--1.7%
16,000,000 Triton Energy Corp.
Sr. Sub. Disc. Notes
Zero Coupon, 11/01/97......... 13,800,000
------------
Total Corporate Notes and Bonds
(cost--$77,477,062)........... $ 64,397,500
------------
CONVERTIBLE CORPORATE
NOTES AND BONDS--10.3%
Airlines--5.3%
$ 41,500,000 AMR Corp.
Conv. Sub. Deb.
6.125%, 11/01/24.............. $ 42,848,750
------------
Oil/Gas--2.7%
12,970,545 Crusader Limited
Conv. Sub. Notes
6.00%, 2/14/04 (B)............ 21,947,459
------------
Real Estate--2.3%
18,987,680 Security Capital Realty, Inc.
Conv. Sub. Deb.
12.00%, 6/30/14 (B)........... 18,987,680
------------
Total Convertible Corporate
Notes and Bonds
(cost--$70,134,334)........... $ 83,783,889
------------
<CAPTION>
SHARES VALUE
- ------------ ------------
<S> <C>
PREFERRED STOCK--1.2%
Entertainment
310,000 Time Warner Financing Trust
$1.24 Pfd.
(cost--$9,652,620)............ $ 9,687,500
------------
CONVERTIBLE PREFERRED
STOCK--1.6%
Tobacco/Beverages/Food Products
1,242,200 Flagstar Companies, Inc.
$2.25 Conv. Exch. Pfd.
(cost--$28,467,145)........... $ 12,887,825
------------
COMMON STOCKS--81.3%
Aerospace--5.1%
450,000 McDonnell Douglas Corp. ........ $ 41,400,000
------------
Automotive--4.2%
917,600 Varity Corp.*................... 34,065,900
------------
Banking--4.1%
500,000 Citicorp........................ 33,625,000
------------
Casinos/Gaming--1.1%
400,000 Trump Hotels & Casino Resorts,
Inc.*......................... 8,600,000
------------
Chemicals--3.5%
500,000 Hercules, Inc................... 28,187,500
------------
Electronics--5.6%
500,000 Arrow Electronics, Inc.*........ 21,562,500
714,700 UCAR International, Inc.*....... 24,121,125
------------
45,683,625
------------
Insurance--20.7%
500,000 AFLAC, Inc. .................... 21,687,500
656,000 EXEL Limited.................... 40,016,000
50,500 GCR Holdings, Limited*.......... 1,136,250
1,150,000 Mid Ocean Limited............... 42,693,750
550,000 Progressive Corp., Ohio......... 26,881,250
500,000 Transamerica Corp. ............. 36,437,500
------------
168,852,250
------------
Metals/Mining--5.8%
Freeport McMoRan, Copper
& Gold
646,250 (Class A)....................... 18,095,000
1,052,601 (Class B)....................... 29,604,403
------------
47,699,403
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------
<S> <C>
Miscellaneous Financial
Services--10.3%
500,000 Countrywide Credit Industries,
Inc. ......................... $ 10,875,000
500,000 Federal Home Loan Mortgage
Corp. ........................ 41,750,000
500,000 Travelers Group, Inc. .......... 31,437,500
------------
84,062,500
------------
Oil/Gas--3.5%
500,000 Triton Energy Corp.*............ 28,687,500
------------
Real Estate--2.6%
24,346 Security Capital Realty, Inc.
(B)........................... 21,473,235
------------
Telecommunications--4.3%
1,000,000 WorldCom, Inc.*................. 35,250,000
------------
<CAPTION>
SHARES VALUE
- ------------ ------------
<S> <C>
Tobacco/Beverages/Food
Products--10.5%
500,000 Philip Morris Companies, Inc.... $ 45,250,000
1,210,000 UST, Inc. ...................... 40,383,750
------------
85,633,750
------------
Total Common Stocks
(cost--$454,534,706).......... $663,220,663
------------
TOTAL INVESTMENTS
(cost--$661,651,867)................. 104.9% $855,363,377
Other Liabilities in Excess of
Other Assets......................... (4.9) (40,184,651)
----- ------------
TOTAL NET ASSETS....................... 100.0% $815,178,726
----- ------------
----- ------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
* Non-income producing security.
NOTES TO SCHEDULE OF INVESTMENTS:
(A) Harrah's Jazz Co. filed for bankruptcy protection under Chapter 11 on
November 22, 1995.
(B) Restricted Securities (The Fund will not bear any costs, including those
involved in registration under the Securities Act of 1933, in connection
with the disposition of these securities.):
<TABLE>
<CAPTION>
DATE OF PAR AVERAGE FAIR VALUE AS OF
DESCRIPTION ACQUISITION AMOUNT SHARES COST DECEMBER 31, 1995
- ----------------------------------- ----------- ----------- ------ ------- -----------------
<S> <C> <C> <C> <C> <C>
Crusader Limited 6.00%, 2/14/04.... 4/28/94 $12,970,545 -- $ 100 $ 169
Security Capital Realty, Inc.
12.00%, 6/30/14.................. 6/16/94 18,987,680 -- 94 100
Security Capital Realty, Inc.
Common Stock..................... 8/02/93 -- 24,346 699 882
</TABLE>
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value
(cost--$661,651,867)................. $855,363,377
Cash.................................... 899
Dividends and interest receivable....... 4,236,422
Income tax receivable................... 119,890
Prepaid expenses and other assets....... 9,136
------------
Total assets.......................... $859,729,724
LIABILITIES
Long-term capital gains tax payable..... $ 28,118,490
Payable for investments purchased....... 12,389,971
Dividends payable to Income
Shareholders......................... 3,420,817
Investment advisory fees payable........ 397,530
Administration fees payable............. 71,013
Other payables and accrued expenses..... 153,177
------------
Total liabilities..................... 44,550,998
------------
NET ASSETS
(Shareholders' Equity)
Net assets applicable to 18,004,302
Income Shares outstanding of
$.01 par value....................... $209,375,830
Net assets applicable to 18,004,302
Capital Shares outstanding of
$.01 par value....................... 605,802,896
------------
Total Net Assets...................... $815,178,726
------------
------------
<CAPTION>
INCOME CAPITAL
SHARES SHARES
------------ ------------
<S> <C> <C>
Net asset value per share............... $11.63 $33.65
------ ------
------ ------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................. $ 17,427,955
Dividends............................ 13,325,782
------------
Total investment income........... $ 30,753,737
OPERATING EXPENSES:
Investment advisory fees (note 2a)... $ 4,418,791
Administration fees (note 2b)........ 783,758
Reports and notices to
shareholders....................... 166,215
Custodian fees....................... 77,827
Transfer and dividend disbursing
agent fees......................... 61,478
Auditing, consulting and tax return
preparation fees................... 60,888
Exchange fees........................ 40,844
Directors' fees and expenses......... 37,250
Legal fees........................... 11,450
Miscellaneous........................ 50,764
------------
Total operating expenses.......... 5,709,265
------------
Net investment income............. 25,044,472
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, OPTIONS AND
FUTURES--NET:
Net realized gain on investments..... $113,381,309
Net realized loss on written option
transactions (note 1d)............. (455,494)
Net realized loss on futures
transactions (note 1e)............. (36,967,565)
------------
Net realized gain on investments,
options and futures
transactions..................... $ 75,958,250
Net change in unrealized appreciation
(depreciation) on investments,
options and futures................ 94,400,856
------------
Net realized gain and change in
unrealized appreciation
(depreciation) on investments,
options and futures transactions
before provision for corporate
income taxes on long-term capital
gains retained..................... 170,359,106
Provision for corporate income taxes
(including $261,305 for state and
local taxes) on long-term capital
gains retained (note 1b)........... (28,346,378)
------------
Net realized gain and change in
unrealized appreciation
(depreciation) on investments,
options and futures transactions
after provision for corporate
income taxes on long-term capital
gains retained..................... 142,012,728
------------
Net increase in net assets resulting
from operations.................... $167,057,200
------------
------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Net investment income................... $ 25,044,472 $ 24,415,397
Net realized gain on investments,
options and futures transactions..... 75,958,250 36,436,200
Net change in unrealized appreciation
(depreciation) on investments,
options and futures.................. 94,400,856 (43,370,555)
Provision for income taxes on capital
gains retained (note 1b)............. (28,346,378) (9,497,588)
------------ ------------
Net increase in net assets resulting
from operations.................... 167,057,200 7,983,454
Dividends to Income Shareholders
($1.39 and $1.335 per share,
respectively)........................ (25,025,980) (24,035,669)
Distributions to Capital Shareholders
($.033 and $.389 per share,
respectively)........................ (594,142) (7,009,075)
------------ ------------
Total increase (decrease) in net
assets............................. 141,437,078 (23,061,290)
Net Assets:
Beginning of year.................... 673,741,648 696,802,938
------------ ------------
End of year (including undistributed
net investment income of $517,907
and $499,415, respectively)........ $815,178,726 $673,741,648
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
STATEMENT OF CHANGES IN UNDISTRIBUTED NET INVESTMENT INCOME,
REALIZED AND UNREALIZED GAINS (LOSSES)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Net investment income available for
distribution:
Balance, beginning of year........... $ 499,415 $ 119,687
Net investment income................ 25,044,472 24,415,397
Dividends to Income Shareholders
($1.39 and $1.335 per share,
respectively)...................... (25,025,980) (24,035,669)
------------ ------------
Balance, end of year.............. $ 517,907 $ 499,415
------------ ------------
------------ ------------
Accumulated net realized gains:
Balance, beginning of year........... $156,215,731 $136,286,194
Net realized gain on investments,
options and futures transactions... 75,958,250 36,436,200
Provision for income taxes on
long-term capital gains retained
(note 1b).......................... (28,346,378) (9,497,588)
Distributions to Capital Shareholders
($.033 and $.389 per share,
respectively)...................... (594,142) (7,009,075)
------------ ------------
Balance, end of year.............. $203,233,461 $156,215,731
------------ ------------
------------ ------------
Net unrealized appreciation
(depreciation) on investments,
options and futures:
Balance, beginning of year............ $ 99,310,654 $142,681,209
Net change in unrealized appreciation
(depreciation) on investments,
options and futures................ 94,400,856 (43,370,555)
------------ ------------
Balance, end of year............... $193,711,510 $ 99,310,654
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Quest for Value Dual Purpose Fund, Inc. (the 'Fund') is a diversified,
closed-end, 'dual-purpose' investment company. The Fund commenced investment
operations on February 13, 1987. OpCap Advisors (the 'Adviser') (formerly Quest
for Value Advisors), a majority-owned (99%) subsidiary of Oppenheimer Capital,
serves as the Fund's investment adviser. Oppenheimer Capital (the
'Administrator') serves as the Fund's administrator. The preparation of the
financial statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. The following is a summary
of significant accounting policies consistently followed by the Fund:
(A) VALUATION OF INVESTMENTS
Investment securities listed on a national securities exchange and
securities traded in the over-the-counter National Market System are valued at
the last reported sale price on the valuation date; if there are no such
reported sales, the securities are valued at their last quoted bid price. Other
securities traded over-the-counter and not part of the National Market System
are valued at the last quoted bid price. Investment debt securities (other than
short-term obligations) are valued each day by an independent pricing service
using methods which include current market quotations from a major market maker
in the securities and trader-reviewed 'matrix' prices. Short-term debt
securities having a remaining maturity of sixty days or less are valued at
amortized cost or amortized value, which approximates market value. The ability
of issuers of debt instruments to meet their obligations may be affected by
economic developments in a specific industry or region. Any securities or other
assets for which market quotations are not readily available are valued at their
fair value as determined in good faith under procedures established by the
Fund's Board of Directors.
(B) FEDERAL INCOME TAXES
It is the Fund's intention to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its taxable ordinary income to its shareholders;
accordingly, no Federal income tax provision is required. Net realized long-term
capital gains, if any, on security transactions are retained and applicable
taxes thereon will be accrued at the end of the Fund's fiscal year.
(C) INVESTMENT TRANSACTIONS AND OTHER INCOME
Investment transactions are accounted for on the trade date. In determining
the gain or loss from the sale of investments, the cost of investments sold has
been determined on the basis of identified cost. Dividend income is recorded on
the ex-dividend date and interest income is accrued as earned. Discounts or
premiums on debt securities are accreted or amortized to interest income over
the lives of the respective securities.
(D) OPTION ACCOUNTING POLICIES
When the Fund writes a call or put option, the premium received is included
in the Fund's Statement of Assets and Liabilities as an asset and an equivalent
amount is recognized as a liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option written. The
current market value of a traded option is the last sale price or, in the
absence of a sale, the last asked price. If the option expires on its stipulated
expiration date or if the Fund enters into a closing purchase transaction, the
Fund will realize a gain (or loss if the cost of a closing purchase transaction
exceeds the premium received when the option was written) without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option will be extinguished. If a call option which the Fund has written is
exercised, the Fund realizes a gain or loss from the sale of the underlying
security and the proceeds from such sale are increased by the premium originally
received. If a put option which the Fund has written is exercised, the amount of
the premium originally received will reduce the cost of the security which the
Fund purchases upon exercise of the option.
When the Fund purchases a put option, it pays a premium and an amount equal
to the premium is recorded as an investment. The option is subsequently
marked-to-market to reflect its current market value. The Fund, as purchaser of
an option, has control over whether the option is exercised. If an option
expires, the Fund realizes a loss in the amount of the premium paid. If an
option is exercised, the premium paid is an adjustment to the proceeds from the
sale in determining whether the Fund has realized a gain or loss. The difference
between the premium paid and the amount received on effecting a
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
closing sale transaction is the realized gain or loss. The Fund, as a purchaser
of an option, bears the risk of the potential inability of the counterparties to
meet the terms of their contracts.
(E) FUTURES ACCOUNTING POLICIES
A futures contract is an agreement between two parties to buy and sell a
financial instrument at a set price on a future date. Upon entering into such a
contract the Fund is required to pledge to the broker an amount of cash or U.S.
Government securities equal to the minimum 'initial margin' requirements of the
exchange. Pursuant to the contracts, the Fund agrees to receive from or pay to
the broker an amount of cash equal to the daily fluctuation in value of the
contracts. Such receipts or payments are known as 'variation margin,' and are
recorded by the Fund as unrealized appreciation or depreciation. When the
contracts are closed, the Fund records a realized gain or loss equal to the
difference between the value of the contracts at the time they were opened and
the value at the time they were closed and reverses any unrealized appreciation
or depreciation previously recorded.
(F) REPURCHASE AGREEMENTS
The Fund enters into repurchase agreements as part of its investment
program. The Fund's custodian takes possession of collateral pledged by the
counterparty. The collateral is marked-to-market daily to ensure that the value,
plus accrued interest, is at least equal to the repurchase price. In the event
of default of the obligor to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Under
certain circumstances, in the event of default or bankruptcy by the counterparty
to the agreement, realization and/or retention of the collateral or proceeds may
be subject to legal proceedings.
(G) DIVIDENDS AND DISTRIBUTIONS
The Fund distributes its net investment income to holders of the Income
Shares at a fixed monthly rate (currently $.10 a share) with any excess net
investment income distributed on a quarterly basis. Income Shares are entitled
to cumulative dividends in an amount equivalent to net investment income with a
minimum annual rate of $.875 per share.
To the extent that any such minimum cumulative dividend cannot be satisfied
from net investment income, it will be paid from any tax basis net realized
short-term or long-term capital gains. Capital Shares will not be entitled to
receive dividends from net investment income as long as Income Shares are
outstanding.
The Fund declared dividends of $1.39 per Income Share during the year ended
December 31, 1995. To the extent not needed to pay the Income Shares' minimum
cumulative dividends, distributions from tax basis net realized short-term
capital gains, if any, may be paid to holders of the Capital Shares. The Fund
will not distribute tax basis net realized long-term capital gains except to the
limited extent described previously. Dividends and distributions to shareholders
are recorded on the ex-dividend date.
On January 31, 1997 Income Shares will be redeemed at $11.60 per share, plus
accumulated and unpaid dividends. Should assets be insufficient to redeem the
Income Shares at such amount, total net assets of the Fund would be distributed
to Income Shareholders on a pro-rata basis.
(2) INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER TRANSACTIONS WITH
AFFILIATES
(a) The investment advisory fee is payable monthly to the Adviser and is
computed on the average weekly net assets of the Fund as of the close of
business each week at the following annual rates: .75% on the first $200
million; and .50% on net assets in excess of $200 million.
(b) The administration fee is payable monthly to the Administrator and is
computed on the average weekly net assets of the Fund as of the close of
business each week at the annual rate of .10%.
(c) Total brokerage commissions paid by the Fund during the year ended
December 31, 1995 amounted to $1,051,545 of which Oppenheimer & Co., Inc., an
affiliate of the Adviser, received $267,394.
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
(3) PURCHASES AND SALES OF SECURITIES
During the year ended December 31, 1995, purchases and sales of investment
securities, other than short-term securities and options, aggregated
$539,664,845 and $580,397,470, respectively.
The following table summarizes activity in written option contracts during
the year ended December 31, 1995:
<TABLE>
<CAPTION>
CONTRACTS PREMIUMS
--------- ----------
<S> <C> <C>
Option contracts written: Outstanding at
beginning of year..................... 1,870 $ 997,917
Options written....................... 10,230 4,042,928
Options terminated in closing purchase
transactions........................ (3,782) (1,496,899)
Options exercised..................... (8,318) (3,543,946)
--------- ----------
Option contracts written: Outstanding at
end of year........................... 0 $ 0
--------- ----------
--------- ----------
</TABLE>
(4) FEDERAL INCOME TAXES
(A) COST OF INVESTMENTS
At December 31, 1995, the cost of investments for Federal income tax
purposes was $666,075,195. Aggregate gross unrealized appreciation (all
securities in which there is an excess of value over tax cost) amounted to
$221,032,733 and aggregate gross unrealized depreciation (all securities in
which there is an excess of tax cost over value) amounted to $31,744,551,
resulting in net unrealized appreciation of $189,288,182.
(B) LONG-TERM CAPITAL GAINS
For the year ended December 31, 1995, the Fund retained net tax basis
realized long-term capital gains of $80,243,065 and accrued Federal income taxes
of $28,085,073.
(5) CAPITAL STOCK
The Fund is authorized to issue 20 million Capital Shares and 20 million
Income Shares at $.01 par value, respectively. Each class of shares has
18,004,302 shares issued and outstanding, representing $180,043 at par and
$208,677,881 paid-in-surplus.
(6) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS,
NET OPTIONS AND FUTURES - NET
INVESTMENT INVESTMENT (AFTER PROVISION FOR INCOME
INCOME INCOME TAXES)
----------------------- ----------------------- ------------------------------
PER PER PER
QUARTER ENDED TOTAL SHARE TOTAL SHARE TOTAL SHARE
- ------------------------------ ----------- ----- ----------- ----- ------------ ------
<S> <C> <C> <C> <C> <C> <C>
March 31, 1995................ $ 7,638,860 $0.43 $ 6,365,976 $0.35 $ 57,584,502 $ 3.20
June 30, 1995................. 7,777,455 0.43 6,387,012 0.36 60,006,065 3.33
September 30, 1995............ 6,404,802 0.35 4,899,611 0.27 60,450,460 3.36
December 31, 1995............. 8,932,620 0.50 7,391,873 0.41 (36,028,299) (2.00)
----------- ----- ----------- ----- ------------ ------
$30,753,737 $1.71 $25,044,472 $1.39 $142,012,728 $ 7.89
----------- ----- ----------- ----- ------------ ------
----------- ----- ----------- ----- ------------ ------
March 31, 1994................ $ 6,654,116 $0.37 $ 5,372,817 $0.30 $ (7,528,343) $(0.42)
June 30, 1994................. 7,076,495 0.39 5,781,334 0.32 8,230,557 0.46
September 30, 1994............ 6,969,837 0.39 5,643,562 0.32 10,890,082 0.61
December 31, 1994............. 8,916,723 0.50 7,617,684 0.42 (28,024,239) (1.56)
----------- ----- ----------- ----- ------------ ------
$29,617,171 $1.65 $24,415,397 $1.36 $(16,431,943) $(0.91)
----------- ----- ----------- ----- ------------ ------
----------- ----- ----------- ----- ------------ ------
</TABLE>
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
(7) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
During the year ended December 31, 1995, the Fund made use of special
investment techniques. These techniques are option 'overwriting' and 'dynamic
hedging'.
Option overwriting involves the writing of call options on stock held by the
Fund for the purpose of generating incremental revenues on its portfolio and to
partially protect against portfolio losses. The risk in writing a call option is
that the Fund gives up the opportunity for profit if the market price of the
security on which the option is written increases and the option is exercised.
Written options involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. If written options are
traded through a regulated exchange, the counterparty risk is generally
eliminated since the exchange interposes itself into the transaction. If,
however, the written options are traded in the over-the-counter markets,
counterparty credit risk can exist. At December 31, 1995, the Fund had no
written options outstanding.
Dynamic hedging is an attempt to protect against declines in the market
value of its portfolio through the sale of stock index futures. It's purpose is
to achieve a pre-specified level of downside protection while at the same time
retaining exposure to the upside potential of the portfolio. The use of futures
contracts involves the risk of imperfect correlation in movements in the price
of the futures contracts and the underlying hedged securities. At December 31,
1995, the Fund had no open futures contracts.
(8) SUBSEQUENT EVENTS
On January 5, 1996, a dividend of $.10 per share or approximately $1,800,430
was declared to Income Shareholders payable January 31, 1996 to shareholders of
record on January 18, 1996.
On February 5, 1996, a dividend of $.10 per share or approximately
$1,800,430 was declared to Income Shareholders payable February 29, 1996 to
shareholders of record on February 15, 1996.
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Income Shares:
Net Asset Value, Beginning of Year... $ 11.63 $ 11.61 $ 11.61 $ 11.60 $ 11.60
Net investment income................ 1.39 1.36 1.30 1.35 1.37
Dividends to Income Shareholders..... (1.39) (1.34) (1.30) (1.34) (1.37)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Year......... $ 11.63 $ 11.63 $ 11.61 $ 11.61 $ 11.60
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Market Value, End of Year............ $ 12.000 $ 12.125 $ 13.25 $ 13.00 $ 13.375
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Investment Return (1).......... 10.9% 1.8% 12.3% 7.4% 15.0%
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Capital Shares:
Net Asset Value, Beginning of Year... $ 25.79 $ 27.09 $ 26.29 $ 22.59 $ 16.43
Net realized and unrealized gain
(loss) on investments, options and
futures transactions............... 9.46 (0.38) 2.45 6.09 6.77
Provision for corporate income taxes
on net realized long-term capital
gains.............................. (1.57) (0.53) (1.43) (1.10) (0.60)
Distributions to Capital
Shareholders....................... (0.03) (0.39) (0.22) (1.29) (0.01)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Year......... $ 33.65 $ 25.79 $ 27.09 $ 26.29 $ 22.59
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Market Value, End of Year............ $ 31.875 $ 23.00 $ 23.75 $ 23.00 $ 17.625
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Investment Return (2).......... 45.6% 0.9% 10.5% 44.6% 52.1%
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year.............. $815,178,726 $673,741,648 $696,802,938 $682,373,943 $615,726,914
------------ ------------ ------------ ------------ ------------
Ratio of Operating Expenses to
Average Net Assets................. 0.73%(3) 0.74% 0.74% 0.74% 0.77%
------------ ------------ ------------ ------------ ------------
Ratio of Net Investment Income to
Average Net Assets................. 3.20%(3) 3.47% 3.29% 3.61% 4.39%
------------ ------------ ------------ ------------ ------------
Portfolio Turnover Rate.............. 72% 45% 51% 45% 62%
------------ ------------ ------------ ------------ ------------
Number of each class of Income and
Capital Shares outstanding at the
end of year........................ 18,004,302 18,004,302 18,004,302 18,004,302 18,004,302
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>
(1) Change in market price assuming reinvestment of dividends on payable date
(at market).
(2) Change in market price assuming reinvestment of distributions on payable
date and federal taxes paid on long-term capital gains on year end (both at
market).
(3) Average net assets for the year ended December 31, 1995 were $783,758,140.
<PAGE>
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Quest for Value Dual Purpose Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations, of
changes in net assets and of changes in undistributed net investment income,
realized and unrealized gains (losses) and the financial highlights present
fairly, in all material respects, the financial position of Quest for Value Dual
Purpose Fund, Inc. (the 'Fund') at December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets and the
changes in its undistributed net investment income, realized and unrealized
gains (losses) for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as 'financial
statements') are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1995 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
February 23, 1996
<PAGE>
ABOUT
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
The Quest for Value Dual Purpose Fund, Inc. (the 'Fund') is a closed-end
dual-purpose investment company which invests primarily in stocks, convertible
securities and corporate notes and bonds. The Fund has two classes of shares:
Capital Shares (NYSE symbol KFV) for those seeking long-term growth of capital;
and Income Shares (NYSE symbol KFV Pr.) for those seeking current and long-term
growth of income.
Capital Share investors provided 50% of the Fund's capital at inception in
1987, yet receive all of the portfolio's capital appreciation (depreciation).
Income Share investors, on the other hand, initially provided 50% of the Fund's
capital, but receive all of the portfolio's net investment income. Consequently,
investors in each class of shares have more assets working for their respective
investment goals than they have contributed.
After redemption of the Income Shares on January 31, 1997, at initial net
asset value of $11.60, plus any accumulated and unpaid dividends, Capital
Shareholders will own all remaining assets. Thereafter, the Fund will either
liquidate or submit to the Capital Shareholders a proposal to continue as an
open-end investment company (i.e., a mutual fund).
SHARE COMPARISON
The following is a brief summary of certain rights for each class of shares
of the Fund.
CAPITAL SHARES INCOME SHARES
o Generally will be entitled to all o Entitled to all the Fund's Net
capital appreciation and subject to Investment Income.
all depreciation from 100% of the
assets of the Fund.
- --------------------------------------------------------------------------------
o No distributions from Net Investment o Minimum cumulative dividend of $ .875
Income as long as Income Shares are annually.
outstanding.
- --------------------------------------------------------------------------------
o Bear none of the Fund's expenses. o Potential for growing income stream.
1995 dividends amounted to $1.39.
- --------------------------------------------------------------------------------
o NYSE symbol KFV. o NYSE symbol KFV Pr.
DIVIDEND REINVESTMENT PLAN
Income Shareholders may participate in the dividend reinvestment plan (the
'Plan') by calling the Plan Agent, State Street Bank and Trust Company at
1-800-426-5523 if the shares are held in your own name. If shares are held in
nominee name (in the name of your brokerage firm, bank or other institution),
contact your nominee and request that they either participate on your behalf or
re-register the shares in your name.
The Plan, in brief, works like this: On the payable date for a dividend the
Plan Agent will pool the dividends payable to participants in the Plan. Shortly
thereafter, the plan agent will purchase shares on the open market on behalf of
the Plan. When completed, they will allocate the shares to each participant.
Each participant will pay the same purchase cost plus a proportionate share of
the brokerage commissions. The administrative expenses of the Plan will be paid
by the Fund. Participation in the Plan in no way reduces or eliminates tax
liability on dividends reinvested. Participants may withdraw from the Plan at
any time by contacting the Plan Agent.
<PAGE>
IMPORTANT TAX NOTES
QUEST FOR VALUE DUAL PURPOSE FUND, INC.
INCOME SHAREHOLDERS
In early 1996, shareholders will receive information regarding all dividends
declared by the Fund during the calendar year 1995. Regulations of the U.S.
Treasury Department require the Fund to report this information to the Internal
Revenue Service. For corporate shareholders only, the amount of dividends paid
by the Fund during the calendar year ended December 31, 1995 should be
multiplied by 52.8% to arrive at the net amount which is eligible for the
dividends received deduction.
CAPITAL SHAREHOLDERS
Quest for Value Dual Purpose Fund Capital Shares generally receive all net
capital gains which are realized from the sale of portfolio securities. The net
realized long-term capital gains are retained in the value of the Capital Shares
rather than being distributed to shareholders. According to provisions of the
Internal Revenue Code, the Fund pays Federal income tax on these net realized
long-term capital gains at the corporate capital gains tax rate. The amount of
this tax (plus state and local taxes) was deducted from the net asset value of
the Capital Shares at the Fund's year end on December 31, 1995.
As a result of the above actions taken by the Fund, there are three
important tax steps which you, as a Capital Shareholder, should take:
(1) You should report on your 1995 income tax return the net long-term capital
gains realized by the Fund during the year, as indicated on Form 2439. (line
1)
(2) You should take credit for the Federal taxes paid by the Fund on these
realized gains, as indicated on Form 2439. (line 2)
(3) You should increase the tax cost basis of your Capital Shares by the amount
of the after-tax gains. This is the difference between the amount of net
capital gains realized and the tax paid on these gains by the Fund (see the
table below).
Federal tax Form 2439, being mailed to you in mid February by the transfer
agent, or by March 31, 1996 if your shares are held by a nominee (broker or
bank), provides for your account the specific amounts of realized capital gains
and corresponding taxes paid as discussed in (1) and (2) above. The form details
specific instructions on how to record this information for tax purposes. If
your shares are held for you in a nominee registration, and you do not receive
tax Form 2439, you should contact your bank or broker to obtain the form. A copy
must be filed with your Federal income tax return.
Tax-exempt shareholders must file Form 990T to receive a refund for the
Federal tax paid by the Fund to the Internal Revenue Service (line 2 of Form
2439).
The table below shows: the amount of net realized capital gains per Capital
Share; the Federal taxes paid on your behalf; the Fund's capital gains tax rate;
and the amount by which your cost per share should be increased each year since
the Fund's inception:
<TABLE>
<CAPTION>
1987 1988 1989 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Realized long-term
capital gains retained
per share.............. $0.4382 -- $0.8956 $1.4547 $1.7367 $3.1298 $3.9578 $1.6045 $4.4569
Federal capital gains
taxes paid by the Fund
per share.............. $0.1490 -- $0.3045 $0.4946 $0.5905 $1.0641 $1.3852 $0.5616 $1.5599
Fund's federal tax
rate................... 34% -- 34% 34% 34% 34% 35% 35% 35%
Net amount by which your
cost should be
increased per share.... $0.2892 -- $0.5911 $0.9601 $1.1462 $2.0657 $2.5726 $1.0429 $2.8970
</TABLE>
<PAGE>
ANNUAL SHAREHOLDERS MEETING
- --------------------------------------------------------------------------------
The Fund held its annual shareholders meeting on May 18, 1995. At the
meeting, income and capital shareholders voted separately on the election of the
income and capital share directors, voted together on the election of combined
income/capital directors and ratified the selection of Price Waterhouse LLP as
the independent accountants of the Fund. The following table provides
information concerning the matters voted on at the meeting:
1. ELECTION OF DIRECTORS (INCOME SHARES VOTING ONLY)
<TABLE>
<CAPTION>
NOMINEE VOTES FOR VOTES AGAINST WITHHELD AUTHORITY
- ------------------------- ---------- -------------- ------------------
<S> <C> <C> <C>
Pamela W. McCann......... 14,035,242 0 135,036
Dr. Thomas W. Murnane.... 14,042,565 0 127,713
</TABLE>
2. ELECTION OF DIRECTORS (CAPITAL SHARES VOTING ONLY)
<TABLE>
<CAPTION>
NOMINEE VOTES FOR VOTES AGAINST WITHHELD AUTHORITY
- ------------------------- ---------- -------------- ------------------
<S> <C> <C> <C>
Eugene D. Brody.......... 11,656,038 0 128,593
George Loft.............. 11,644,188 0 140,433
</TABLE>
3. ELECTION OF DIRECTORS (INCOME/CAPITAL SHARES VOTING)
<TABLE>
<CAPTION>
NOMINEE VOTES FOR VOTES AGAINST WITHHELD AUTHORITY
- ------------------------- ---------- -------------- ------------------
<S> <C> <C> <C>
Joseph M. La Motta....... 25,702,242 0 252,667
George D. Langdon, Jr.... 25,703,492 0 251,417
Lawrence Sherman......... 25,700,492 0 254,417
</TABLE>
4. RATIFICATION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT ACCOUNTANTS OF THE
FUND
<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST VOTES ABSTAINED
---------- -------------- ------------------
<S> <C> <C> <C>
25,615,981 109,117 229,811
</TABLE>
The following table provides information concerning the Directors of the
Fund:
<TABLE>
<CAPTION>
DIRECTOR TERM EXPIRATION
- ------------------------------------------- -------------------
<S> <C>
Joseph M. La Motta (1)..................... 1996 Annual Meeting
Eugene D. Brody (2)........................ 1996 Annual Meeting
George D. Langdon, Jr. (1)................. 1996 Annual Meeting
George Loft (2)............................ 1996 Annual Meeting
Pamela W. McCann (3)....................... 1996 Annual Meeting
Dr. Thomas W. Murnane (3).................. 1996 Annual Meeting
Lawrence Sherman (1)....................... 1996 Annual Meeting
</TABLE>
- ------------------
Key:
(1) Director for both Income and Capital Shares
(2) Director for Capital Shares
(3) Director for Income Shares
<PAGE>
QUEST FOR
VALUE
DUAL PURPOSE
FUND, INC.
DIRECTORS AND OFFICERS
<TABLE>
<S> <C>
Joseph M. La Motta Director, President (1)
Eugene D. Brody Director (2)
George D. Langdon, Jr. Director (1)
George Loft Director (2)
Pamela W. McCann Director (3)
Dr. Thomas W. Murnane Director (3)
Lawrence Sherman Director (1)
Jeffrey C. Whittington Vice President
Bernard H. Garil Vice President
Sheldon Siegel Treasurer
Thomas E. Duggan Secretary
Leslie Klein Assistant Treasurer
Deborah Kaback Assistant Secretary
</TABLE>
INVESTMENT ADVISER
OpCap Advisors
One World Financial Center
New York, NY 10281
TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR
BostonEquiServe L.P.
P.O. Box 8200
Boston, MA 02266
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of Americas
New York, NY 10036
KEY:
(1) Director for both Capital and Income Shares
(2) Director for Capital Shares
(3) Director for Income Shares
This report, including the financial information herein, is transmitted to the
shareholders of Quest for Value Dual Purpose Fund, Inc. for their information.
It is not a prospectus, circular or representation intended for use in
the purchase of shares of the Fund or any securities mentioned in this
report.
QUEST FOR VALUE
DUAL PURPOSE
FUND, INC.
ANNUAL REPORT
DECEMBER 31, 1995
MANAGED BY
OPCAP ADVISORS
