<PAGE>
January 1, 2001
FUND PROFILE
T. ROWE PRICE
Capital Opportunity Fund
An aggressively managed stock fund seeking superior capital appreciation
through a flexible investment strategy.
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by calling
1-800-638-5660, or by visiting our Web site at www.troweprice.com.
TROWEPRICELOGO
<PAGE>
<PAGE>
1
FUND PROFILE
---------------------------------------------------------
What is the fund's objective?
The fund seeks superior capital appreciation over time by investing primarily
in U.S. common stocks.
What is the fund's principal investment strategy?
We will invest primarily in the common stocks of U.S. companies that appear
to offer the best opportunities for capital appreciation at any given time,
based on the proprietary research of T. Rowe Price. The managers will pursue
a flexible strategy in the selection of stocks, not limited by any particular
investment style, industry, or company size. For example, the fund may pursue
a growth or value approach in selecting investments, or a combination of
both.
Drawing on T. Rowe Price research, the fund will generally seek to invest in
companies:
. expected to achieve accelerating earnings growth, perhaps due to strong
demand for their products or services;
. whose securities appear undervalued based on various measures such as
earnings, and book value, etc.;
. undergoing financial restructuring;
. involved in takeover or arbitrage situations;
. expected to benefit from evolving market cycles or changing economic
conditions; or
. that represent special situations, such as changes in management or
favorable regulatory developments, which are expected to lead to higher
earnings and share prices.
While most assets will be invested in U.S. common stocks, other securities
may also be purchased, including foreign stocks, futures, and options, in
keeping with fund objectives.
The fund may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of either of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
As with all equity funds, this fund's share price can fall because of
weakness in the broad market, a particular industry, or specific holdings.
The market as a whole can decline for many reasons, including adverse
political or eco-
<PAGE>
2
2
FUND PROFILE
---------------------------------------------------------
nomic developments here or abroad, changes in investor psychology, or heavy
institutional selling. The prospects for an industry or company may
deteriorate because of a variety of factors, including disappointing earnings
or changes in the competitive environment. In addition, our assessment of
companies held in the fund may prove incorrect, resulting in losses or poor
performance even in a rising market. Finally, the fund's investment approach
could fall out of favor with the investing public, resulting in lagging
performance versus other types of stock funds.
The fund's potential investments in growth stocks could result in greater
volatility because of the generally higher valuations of these stocks. The
fund's potential use of the value approach carries the risk that the market
will not recognize a security's intrinsic value for a long time, or that a
stock judged to be undervalued may actually be appropriately priced. Small
and medium-sized companies held by the fund should generally be more volatile
than larger companies. There is no guarantee that the fund's flexible
investment approach will succeed.
Foreign stock holdings are subject to the risk that some holdings may lose
value because of declining foreign currencies or adverse political or
economic events overseas. Investments in futures and options, if any, are
subject to additional volatility and potential losses.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
. The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance level for risk. If you can accept the greater risk of
investing in an aggressively managed fund in an effort to achieve superior
capital appreciation, the fund may be an appropriate part of your overall
investment strategy. The fund should not represent your complete investment
program or be used for short-term trading purposes.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
. Equity investors should have a long-term investment horizon and be willing
to wait out bear markets.
<PAGE>
3
FUND PROFILE
---------------------------------------------------------
How has the fund performed in the past?
The bar chart showing calendar year returns and the average annual total
return table indicate risk by illustrating how much returns can differ from
one year to the next and over time. Fund past performance is no guarantee of
future returns.
The fund can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns during the years depicted in the
chart.
LOGO
<TABLE>
<CAPTION>
Calendar Year Total Returns
"95" "96" "97" "98" "99"
---------------------------------------------
<S> <C> <C> <C> <C>
46.51 16.76 15.87 14.70 11.50
---------------------------------------------
</TABLE>
Quarter ended Total return
Best quarter 12/31/98 21.97%
Worst quarter 9/30/98 -18.00%
<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended 12/31/2000
Since inception
1 year 5 years (11/30/1994)
------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital Opportunity Fund -6.32% 10.14% 16.07%
S&P 500 Stock Index -9.11 18.33 21.31
Lipper Multi-Cap Core Funds -2.96 15.92 18.25
Average
------------------------------------------------------------------------------
</TABLE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
<PAGE>
4
4
FUND PROFILE
---------------------------------------------------------
What fees or expenses will I pay?
The fund is 100% no load. There are no fees or charges to buy or sell fund
shares, reinvest dividends, or exchange into other T. Rowe Price funds. There
are no 12b-1 fees.
<TABLE>
Table 2 Fees and Expenses of the Fund
<CAPTION>
Annual fund operating expenses
(expenses that are deducted from fund assets)
-------------------------------------------------------------------------------------
<S> <C>
Management fee 0.67%/ // /
Other expenses 0.59%
Total annual fund operating 1.26%/ // /
expenses
-------------------------------------------------------------------------------------
</TABLE>
Example. The following table gives you a rough idea of how expense ratios
may translate into dollars and helps you to compare the cost of investing in
this fund with that of other funds. Although your actual costs may be higher
or lower, the table shows how much you would pay if operating expenses remain
the same, you invest $10,000, earn a 5% annual return, and hold the
investment for the following periods:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
----------------------------------------------------
<S> <C> <C> <C>
$128 $400 $692 $1,523
----------------------------------------------------
</TABLE>
Who manages the fund?
The fund is managed by T. Rowe Price Associates, Inc. Founded in 1937, T.
Rowe Price and its affiliates manage investments for individual and
institutional accounts. The company offers a comprehensive array of stock,
bond, and money market funds directly to the investing public.
The fund has an Investment Advisory Committee with the following members:
William J. Stromberg, Chairman, John F. Wakeman, and Richard T. Whitney.
Day-to-day responsibility for managing the fund's investments is shared by
the Advisory Committee and a group of T. Rowe Price equity research analysts.
Note: The following questions and answers about buying and selling shares and
services do not apply to employer-sponsored retirement plans. If you are a
participant in one of these plans, please call your plan's toll-free number for
additional information.
How can I purchase shares?
Fill out the New Account Form and return it with your check in the postpaid
envelope. The minimum initial purchase is $2,500 ($1,000 for IRAs and gifts
or transfers to minors). The minimum subsequent investment is $100 ($50
<PAGE>
5
FUND PROFILE
---------------------------------------------------------
for IRAs, gifts or transfers to minors, or Automatic Asset Builder). You can
also open an account by bank wire, by exchanging from another T. Rowe Price
fund, or by transferring assets from another financial institution.
How can I sell shares?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access /(R)/ or our Web site. We offer convenient exchange among our
entire family of domestic and international funds. Restrictions may apply in
special circumstances, and some redemption requests need a signature
guarantee. A $5 fee is charged for wire redemptions under $5,000.
When will I receive income and capital gain distributions?
The fund distributes income and net capital gains, if any, at year-end. For
regular accounts, income and short-term gains are taxable at ordinary income
rates, and long-term gains are taxable at the capital gains rate.
Distributions are reinvested automatically in additional shares unless you
choose another option, such as receiving a check. Distributions paid to IRAs
and employer-sponsored retirement plans are automatically reinvested.
What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. brokerage services; and
. asset manager accounts.
<PAGE>
FUND PROFILE
---------------------------------------------------------
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
www.troweprice.com
LOGO
RPS F08-035
T. Rowe Price Investment Services, Inc., Distributor
<PAGE>