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SIGNATURE RICHARD H. ROSE
TITLE ASSISTANT TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 0
<NAME> PREFERRED INCOME MANAGEMENT FIND INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
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<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 209,452,985
<INVESTMENTS-AT-VALUE> 211,466,346
<RECEIVABLES> 6,355,566
<ASSETS-OTHER> 0
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<SHARES-COMMON-STOCK> 9,416,743
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<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,980,146)
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</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of Preferred Income Management Fund Incorporated:
In planning and performing our audit of the financial statements and
financial highlights of Preferred Income Management Fund Incorporated
for the year ended November 30, 1996 we considered its internal control
structure, including procedures for safeguarding securities, in order
to determine our auditing procedures for the purpose of expressing an
opinion on the financial statements and financial highlights and to
comply with the requirements of Form N-SAR, not to provide assurance
on the internal control structure.
The management of Preferred Income Management Fund Incorporated is
responsible for establishing and maintaining an internal control
structure. In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected benefits and related
costs of internal control structure policies and procedures. Two of the
objectives of an internal control structure are to provide management
with reasonable, but not absolute, assurance that assets are safeguarded
against loss from unauthorized use or disposition and that transactions
are executed in accordance with management's authorization and recorded
properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and not be detected. Also,
projection of any evaluation of the structure 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 operations
may deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
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 the
specific internal control structure elements does not reduce to a
relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements and
financial highlights 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
the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses, as defined
above, as of November 30, 1996.
This report is intended solely for the information and use of
management of Preferred Income Management Fund Incorporated and
the Securities and Exchange Commission.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
January 3, 1997
