497: Definitive materials filed under paragraph (a), (b), (c), (d), (e) or (f) of Securities Act Rule 497

BULL & BEAR GLOBAL INCOME FUND, INC.

1,576,468 SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF RIGHTS
TO SUBSCRIBE FOR SUCH SHARES

Bull & Bear Global Income Fund, Inc. (the "Fund") is issuing to its
shareholders of record ("Record Date Shareholders") as of the close of business
on May 20, 1998 (the "Record Date") non-transferable rights ("Rights") entitling
the holders thereof to subscribe for an aggregate of 1,576,468 shares ("Shares")
of the Fund's common stock, par value $0.01 per share (the "Offer"). Each Record
Date Shareholder is being issued one Right for each whole share of the Fund's
common stock ("Common Stock") owned on the Record Date. The Rights entitle the
Record Date Shareholder to acquire at the Subscription Price (as hereinafter
defined) one Share for every two Rights held (one for two). Shareholders who
fully exercise their Rights will be entitled to request to subscribe for
additional shares of Common Stock pursuant to an Over-Subscription Privilege, as
defined and described herein. Shares requested pursuant to the Over-Subscription
Privilege may be subject to allotment. The Fund may increase at its discretion
the number of shares of Common Stock subject to subscription by up to 25% of the
Shares, or 394,117 Shares, for an aggregate total of 1,970,585 Shares.
Fractional Shares will not be issued upon the exercise of Rights. Accordingly,
Shares may be purchased only pursuant to the exercise of Rights in integral
multiples of two. The Rights are non-transferable and will not be admitted for
trading on the American Stock Exchange or any other exchange. See "The Offer."
THE SUBSCRIPTION PRICE PER SHARE (THE "SUBSCRIPTION PRICE") WILL BE 93% OF THE
LOWER OF (i) THE AVERAGE OF THE LAST REPORTED SALES PRICE OF A SHARE OF THE
FUND'S COMMON STOCK ON THE AMERICAN STOCK EXCHANGE ON THE DATE OF THE EXPIRATION
OF THE OFFER (THE "PRICING DATE") AND ON THE FOUR PRECEDING BUSINESS DAYS
THEREOF AND (ii) THE NET ASSET VALUE PER SHARE AS OF THE CLOSE OF BUSINESS ON
THE PRICING DATE.

The Fund announced its intention to make the Offer after the close of
trading on the American Stock Exchange on April 30, 1998. Shares of the Common
Stock trade on that exchange under the symbol "BBZ." The last reported net asset
value per share of Common Stock at the close of business on April 24, 1998 (the
last trading date on which the Fund publicly reported its net asset value prior
to the announcement of the Offer) and May 1, 1998 (the last trading date on
which the Fund publicly reported its net asset value prior to the date of this
Prospectus) was $7.85 and $7.86, respectively, and the last reported sale price
of a share of the Fund's Common Stock on that exchange on those dates was $8.00
and $8.1875, respectively.

THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON JUNE 10, 1998 (THE "EXPIRATION DATE"),
UNLESS EXTENDED AS DESCRIBED HEREIN.

Upon the completion of the Offer, Record Date Shareholders who do not
fully exercise their Rights will own a smaller proportional interest in the Fund
than would otherwise be the case if the Offer had not been made. In addition,
because the Subscription Price per Share will be less than the current net asset
value per share, the Offer will result in dilution of net asset value per share
for all shareholders. If the Subscription Price per Share were to be
substantially less than the current net asset value per share, such dilution
would be substantial. Shareholders will have no right to rescind their
subscriptions after receipt of their payment for Shares by the Subscription
Agent. See "Risk Factors and Special Considerations--Certain Effects of the
Offer." (continued on the following page)

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

================================================================================
Estimated Estimated
Subscription Estimated Proceeds to
Price (1) Sales Load (2) The Fund (3)(4)
- --------------------------------------------------------------------------------
Per Share...... $7.31 $0.29 $7.02
- --------------------------------------------------------------------------------
Total Maximum (5).. $11,523,981 $457,176 $11,066,805
==============================================================================
(notes on following page)

FIRST ALBANY CORPORATION
The date of this Prospectus is May 6, 1998





(continued from previous page)

If you have questions or need further information about the Offer,
please call Corporate Investor Communications Inc., the Fund's information agent
for the Offer (the "Information Agent"), at 1-888-200-4398.

The primary investment objective of the Fund, a diversified, closed-end
management investment company, is to provide for its shareholders a high level
of income. This primary investment objective is fundamental and may not be
changed without shareholder approval. The Fund's secondary investment objective,
which may be changed by the Board of Directors of the Fund without shareholders'
approval, is capital appreciation. The Fund pursues its investment objectives by
investing primarily in a global portfolio of investment grade fixed income
securities. There can be no assurance that the Fund will achieve its investment
objectives. See "The Fund's Investment Program." The Fund uses financial
leverage from time to time to purchase or carry securities. Such financial
leverage is speculative and increases both investment opportunity and investment
risk. See "Risk Factors and Special Considerations." Bull & Bear Advisers, Inc.
serves as the Fund's investment manager. The address of the Fund is 11 Hanover
Square, New York, New York 10005, and the Fund's telephone number is (212)
785-0900.

This Prospectus sets forth information about the Fund that a
prospective investor ought to know before investing and should be retained for
future reference. A Statement of Additional Information dated May 5, 1998 (the
"SAI") containing additional information about the Fund has been filed with the
Securities and Exchange Commission (the "SEC" or the "Commission") and is
incorporated by reference in its entirety into this Prospectus. A copy of the
SAI, the table of contents of which appears on the last page of this Prospectus,
may be obtained without charge by contacting the Information Agent at 1-888-
200-4398 or by calling the Fund toll-free at 1-800-847-4200.


---------------------------


(notes from previous page)

(1) Estimated on the basis of 93% of the net asset value
per share on May 1, 1998. See "The
Offer-- Subscription Price."

(2) In connection with the Offer, First Albany
Corporation (the "Dealer Manager") and other
broker-dealers soliciting the exercise of Rights will
receive aggregate soliciting fees equal to 2.375% of
the Subscription Price per Share for each Share
issued upon exercise of the Rights and pursuant to
the Over-Subscription Privilege. The Fund has also
agreed to pay the Dealer Manager a fee for financial
advisory services and marketing assistance in
connection with the Offer equal to 1.625% of the
Subscription Price per Share for Shares issued upon
exercise of the Rights and pursuant to the
Over-Subscription Privilege. The Fund has agreed to
indemnify the Dealer Manager against certain
liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities
Act").

(3) Before deduction of offering expenses incurred by the
Fund, estimated at $300,000, including an aggregate
of up to $100,000 to be paid to the Dealer Manager as
partial reimbursement for its expenses.

(4) Funds received by check prior to the final due date
of this Offer will be deposited into a segregated
interest bearing account (which interest will be paid
to the Fund regardless of whether shares are issued
or not by the Fund) pending proration and
distribution of Shares.

(5) Assumes all Rights are exercised at the Estimated
Subscription Price. Pursuant to the Over- Subscription
Privilege, the Fund may at its discretion increase the
number of Shares subject to subscription by up to 25% of
the Shares offered hereby. If the Fund increases the
number of Shares subject to subscription by 25%, the
aggregate maximum Estimated Subscription
Price, Estimated Sales Load and Estimated Proceeds to the
Fund will be $14,404,976, $571,470 and $13,833,506,
respectively. The Sales Load and other offering expenses
will be charged against paid-in capital of the Fund.


2




PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information included elsewhere in this Prospectus and SAI.

PURPOSE OF THE OFFER

As a consideration to making the Offer (as defined below), the Fund's
Board of Directors has determined that it would be in the best interests of the
Fund and its shareholders to increase the assets of the Fund available for
investment, thereby allowing the Fund to more fully take advantage of available
investment opportunities and increase the diversification of its portfolio,
consistent with the Fund's investment objectives. The Rights Committee of the
Board of Directors has recommended to the Board, and the Board has approved, the
Offer. The Rights Committee of the Board of Directors consists of the two
Directors who are not "interested persons" of the Fund under the Investment
Company Act of 1940, as amended (the "1940 Act"). See "Officers and Directors"
in the SAI. In reaching a decision to approve the Offer, the Board of Directors
was advised by Bull & Bear Advisers, Inc. (the "Investment Manager") as to
opportunities provided to the Fund by the availability of new funds for future
income and capital appreciation by taking advantage of new investments without
having to liquidate current holdings. The Investment Manager also advised the
Board of Directors of its belief that increasing the total assets of the Fund
may permit the Fund to obtain better execution prices for certain portfolio
transactions.

In reaching such decision, the Board of Directors considered, among
other matters, advice by the Investment Manager that a well-subscribed rights
offering may reduce the Fund's expense ratio, which may be of long-term benefit
to shareholders. In addition, the Board of Directors considered that such a
rights offering could result in an improvement in the liquidity of the trading
market for shares of the Fund's common stock ("Common Stock") on the American
Stock Exchange, where the shares are listed and traded. The Board of Directors
also considered the proposed terms of the Offer, including the expenses of the
Offer, and its dilutive effect, including the effect on non-exercising
shareholders of the Fund. The Board of Directors also considered the impact of
the Offer on its current policy to distribute, subject to market conditions, an
amount equal to a percentage of the Fund's net asset value. For further
discussion of the impact of the Offer on the Fund's dividends, please see "Risk
Factors and Special Considerations--Dividends and Distributions; Return of
Capital."

In considering the Offer and its effect on the best interests of the
Fund and its shareholders, the Board of Directors retained the Dealer Manager to
provide the Fund with financial advisory and marketing services relating to the
Offer, including the structure, timing and terms of the Offer. In addition to
the foregoing, the Board of Directors considered, among other things, the
benefits and drawbacks of conducting a non-transferable versus a transferable
rights offering, the pricing structure of the Offer, the effect on the Fund if
the Offer is undersubscribed and the experience of the Dealer Manager in
conducting rights offerings.

Since the Investment Manager's fees are based on the Fund's net assets,
the Investment Manager will benefit from an increase in the Fund's assets
resulting from the Offer. See "The Offer--Certain Impact on Fees."

The Fund may, in the future and at its discretion, choose to make
additional rights offerings from time to time for a number of shares and on
terms which may or may not be similar to the Offer. Any such future rights
offering will be made in accordance with the 1940 Act.

TERMS OF THE OFFER

The Fund is issuing to its shareholders of record ("Record Date
Shareholders") as of the close of business on May 20, 1998 (the "Record Date")
non-transferable rights ("Rights") entitling the holders thereof to subscribe
for an aggregate of 1,576,468 shares ("Shares") of the Fund's Common Stock, par
value $0.01 per share (the "Offer"). Each Record Date Shareholder is being
issued one Right for each whole share of Common Stock owned on the Record Date.
The Rights entitle the Record Date Shareholder to acquire at the Subscription
Price (as hereinafter defined) one Share for every two Rights held (one for
two). Rights may be exercised at any time during the offering period (the
"Subscription Period"), which commences on May 20, 1998 and ends at 5:00 p.m.,
New York City time, on June 10, 1998 (the "Expiration Date"), unless extended by
the Fund until 5:00 p.m., New York City time, on a date no later than June 17,
1998. The right to acquire one Share for every two Rights held during the
Subscription Period at the Subscription Price is hereinafter referred to as the
"Primary Subscription."

Record Date Shareholders, where the context requires, shall also
include beneficial owners whose Shares are held of record by Cede & Co.
("Cede"), nominee for The Depository Trust Company, or by any other depository
or nominee. In the case of shares held of record by Cede or any other depository
or nominee, beneficial owners for whom Cede or any other depository or nominee
is the holder of record will be deemed to be the holders of the Rights that are
issued to Cede or such other depository or nominee on their behalf, including
for purposes of determining the maximum number of Shares a Record Date
Shareholder may acquire pursuant to the Offer.

The first regular monthly dividend to be paid on Shares acquired upon
exercise of Rights will be the first monthly dividend, the record date for which
occurs after the issuance of such Shares following the Expiration Date. It is
the Fund's present policy to pay dividends on the last business day of each
month to shareholders of record approximately fifteen days prior to the payment
date. Assuming the Subscription Period is not extended, it is expected that the
first dividend, if any, received by shareholders acquiring Shares in the Offer
would be paid on the last business day of July 1998.

3




OVER-SUBSCRIPTION PRIVILEGE

Any Record Date Shareholder who fully exercises all Rights issued to
such shareholder is entitled to request to subscribe for Shares which were not
otherwise subscribed for by others in the Primary Subscription (the
"Over-Subscription Privilege"). If sufficient Shares are not available to honor
all requests for over-subscriptions, the Fund may, at its discretion, issue
shares of Common Stock up to an additional 25% of the Shares available pursuant
to the Offer (up to 394,117 Shares) in order to satisfy such over-subscription
requests. Shares requested pursuant to the Over-Subscription Privilege may be
subject to allotment, which is more fully discussed under "The
Offer--Over-Subscription Privilege."

SUBSCRIPTION PRICE

The subscription price per Share (the "Subscription Price") will be 93%
of the lower of (i) the average of the last reported sales price of a share of
the Fund's Common Stock on the American Stock Exchange on the Expiration Date
(the "Pricing Date") and on the four preceding business days thereof and (ii)
the net asset value per share as of the close of business on the Pricing Date.
See "The Offer--Subscription Price."

NON-TRANSFERABILITY OF RIGHTS

The Rights are non-transferable and, therefore, may not be purchased or
sold. The Rights will not be admitted for trading on the American Stock Exchange
or any other exchange. However, the Shares to be issued pursuant to the Rights
will be admitted for trading on the American Stock Exchange.

METHOD OF EXERCISE OF RIGHTS

Rights will be evidenced by subscription certificates ("Subscription
Certificates") that will be mailed to Record Date Shareholders, or if shares are
held by Cede & Co. ("Cede"), the nominee for The Depository Trust Company, or
any other depository or nominee, to Cede or such other depository or nominee.
Rights may be exercised by completing and signing a Subscription Certificate and
delivering it, together with payment in full for the Shares (at the Estimated
Subscription Price shown on the cover of this Prospectus of $7.31 per share), by
check, to State Street Bank and Trust Company (the "Subscription Agent"). Rights
may also be exercised by contacting your broker, bank or trust company which can
arrange on your behalf to guarantee delivery of payment and of a properly
completed and executed Subscription Certificate (a "Notice of Guaranteed
Delivery"). Shareholders who exercise their Rights will have no right to rescind
their subscription after the Subscription Agent has received payment therefor.
See "The Offer--Subscription Agent" and "The Offer--Method of Exercise of
Rights."

FOREIGN RESTRICTIONS

Subscription Certificates will not be mailed to Record Date
Shareholders whose record addresses are outside the United States (for these
purposes the United States includes its territories and possessions and the
District of Columbia) ("Foreign Record Date Shareholders"). The Rights to which
such Subscription Certificates relate will be held by the Subscription Agent for
such Foreign Record Date Shareholder's accounts until instructions are received
to exercise the Rights. If no instructions are received prior to the Expiration
Date, such Rights will expire.

IMPORTANT DATES TO REMEMBER


- --------------------------------------------------------------------------------
EVENT DATE*
- --------------------------------------------------------------------------------
Record Date May 20, 1998
- --------------------------------------------------------------------------------
Subscription Period May 20, 1998 to June 10, 1998*
- --------------------------------------------------------------------------------
(i) Subscription Certificates and Payment
for Shares or (ii) Notice of Guaranteed Delivery Due June 10, 1998*
- --------------------------------------------------------------------------------
Expiration and Pricing Date June 10, 1998*
- -------------------------------------------------------------------------------
Subscription Certificates and Payment
for Guarantees of Delivery Due June 16, 1998*
- --------------------------------------------------------------------------------
Confirmation to Purchasers June 22, 1998*
- --------------------------------------------------------------------------------
Final Payment for Shares Due July 7, 1998*
- --------------------------------------------------------------------------------

* Unless the Offer is extended to a date not later than June 17, 1998.

INFORMATION AGENT

The Information Agent for the Offer (the "Information Agent") is:

CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
TOLL FREE: 1-888-200-4398

4




DISTRIBUTION ARRANGEMENTS

First Albany Corporation will act as the dealer manager for the Offer.
The Fund has agreed to pay the Dealer Manager a fee for its financial advisory
services and marketing assistance equal to 1.625% of the Subscription Price per
Share for Shares issued upon exercise of the Rights and pursuant to the
Over-Subscription Privilege, and to pay broker-dealers, including the Dealer
Manager, aggregate fees for their soliciting efforts equal to 2.375% of the
Subscription Price per Share for each Share issued upon exercise of the Rights
and the Over-Subscription Privilege. See "Distribution Arrangements."

INFORMATION REGARDING THE FUND

The primary investment objective of the Fund, a diversified, closed-end
management investment company, is to provide for its shareholders a high level
of income. This primary investment objective is fundamental and may not be
changed without shareholder approval. The Fund's secondary investment objective,
which may be changed by the Board of Directors of the Fund (the "Directors")
without shareholder approval, is capital appreciation. There can be no assurance
that the Fund will achieve its investment objectives.

The Fund pursues its investment objectives by investing primarily in a
global portfolio of investment grade fixed income securities. The Fund will
normally invest at least 65% of its net assets in investment grade fixed income
securities which are rated, at the time of purchase, BBB or better by Standard &
Poor's Ratings Group ("S&P"), Baa or better by Moody's Investors Service, Inc.
("Moody's") or, if unrated, are determined by the Investment Manager to be of
comparable quality. The Fund may also invest up to 35% of its assets in fixed
income securities rated BB, B, or CCC by S&P or Ba, B, or Caa by Moody's or, if
unrated, securities determined by the Investment Manager to be of comparable
quality and may invest in other securities (including common stocks, warrants,
options and securities convertible into common stock), when such investments are
consistent with its investment objectives or are acquired as part of a unit
consisting of a combination of fixed income securities and other securities. As
of March 31, 1998, the Fund had approximately 68.25% of its total assets
invested in fixed income securities with an actual or deemed investment grade
rating, approximately 26.38% of its total assets in fixed income securities with
an actual or deemed ratings below investment grade and approximately 5.37% of
its total assets in securities other than fixed income securities. The Fund
currently expects to invest predominately in the United States, Europe, Latin
America and the Pacific Rim. The Fund will normally invest in at least three
different countries, but may invest in fixed income securities of only one
country for temporary defensive purposes. The Fund may use leverage from time to
time to purchase or carry securities. Such leverage is speculative and increases
both investment opportunity and investment risk. See "The Fund's Investment
Program." As of March 31, 1998, the Fund held investments in 18 countries,
distributed as follows:


COUNTRY Distribution

Argentina 16.7%
Brazil 3.9%
Bulgaria 2.1%
Chile 2.6%
China 1.2%
Colombia 5.4%
Dominican Republic 1.4%
France 1.3%
Lithuania 5.4%
Japan 0.9%
Mexico 6.9%
Poland 2.4%
Qatar 1.4%
Russia 5.6%
Turkey 1.3%
United Kingdom 7.7%
United States 31.5%
Venezuela 2.3%


Bull & Bear Advisers, Inc. anticipates that investment of the net
proceeds of the Offer, in accordance with the Fund's investment objectives and
policies, will take approximately up to two months from their receipt by the
Fund, depending on market conditions and the availability of appropriate
securities. See "Use of Proceeds." The Common Stock is listed and traded on the
American Stock Exchange under the symbol "BBZ." As of March 31, 1998, the net
assets of the Fund were approximately $25 million.

The Fund commenced operations as a diversified, closed-end management
investment company on February 7, 1997. Prior to that date the Fund was a
diversified series of shares designated Bull & Bear Global Income Fund (and
prior to October 29, 1992 and since September 1, 1983, Bull & Bear High Yield
Fund) of Bull & Bear Funds II, Inc., an open-end management investment company
organized in 1974 and operating under the name Bull & Bear Incorporated until
October 29, 1993.


5




It is the Fund's present policy, which may be changed by the Board of
Directors, to pay dividends on a monthly basis to holders of Common Stock. The
Fund recently adopted a managed distribution policy to distribute on a monthly
basis 0.83% of the Fund's net asset value (10% on an annual basis). This policy
is intended to provide shareholders with a stable cash flow and to reduce any
market price discount to its net asset value. There can be no assurance that the
Fund will be able to maintain its current level of dividends, and the Board of
Directors may, in its sole discretion, change the Fund's current dividend policy
or its current level of dividends in response to market or other conditions.
From the commencement of the Fund's operations as a closed-end investment
company to the adoption of the managed distribution policy described above, the
Fund's shares generally traded in the market at a discount to net asset value.
Since the adoption of the managed distribution policy, the Fund's shares
generally have traded at or above net asset value.

THE INVESTMENT MANAGER

The Investment Manager of the Fund is Bull & Bear Advisers, Inc. (the
"Investment Manager"). The Fund's Portfolio Manager is Steven A. Landis. Mr.
Landis has been principally responsible for the Fund's portfolio investment
decisions since April 1995 and is also Senior Vice President and a member of the
Investment Policy Committee of the Investment Manager with overall
responsibility for the Bull & Bear fixed income funds. Mr. Landis was formerly
Associate Director - Proprietary Trading at Barclays De Zoete Wedd Securities
Inc. from 1993 to 1995 and was Director, Bond Arbitrage at WG Trading Company
from 1992 to 1993.

For its services, the Investment Manager receives an investment
management fee, payable monthly and based on the average weekly net assets of
the Fund, at the annual rate of 7/10 of 1% of the first $250 million, 5/8 of 1%
from $250 million to $500 million, and 1/2 of 1% over $500 million. From time to
time, the Investment Manger may reimburse all or part of this fee to improve the
Fund's yield and total return. The Investment Manager provides certain
administrative services to the Fund at cost.

Since the Investment Manager's fees are based on the Fund's net assets,
the Investment Manager will benefit from an increase in the Fund's assets
resulting from the Offer. See "The Offer--Certain Impact on Fees."

USE OF PROCEEDS

The Fund expects that, subject to market conditions, substantially all
of the net proceeds of the Offer will be invested in accordance with the Fund's
investment objectives and policies within approximately two months from the date
of their receipt by the Fund. Pending such investment, the proceeds will be
invested in short-term debt instruments. See "The Fund's Investment Program."

RISK FACTORS AND SPECIAL CONSIDERATIONS

The following summarizes certain matters that should be considered,
among others, in connection with an exercise of Rights and an additional
investment in the Fund. See "Risk Factors and Special Considerations."

Certain Effects of the Offer. Upon the completion of the Offer,
shareholders who do not fully exercise their Rights will own a smaller
proportional interest in the Fund than would be the case if the Offer had not
been made. In addition, an immediate dilution of the net asset value per share
will be experienced by all shareholders as a result of the Offer because the
Subscription Price will be less than the then current net asset value per share,
the Fund will bear the expenses of the Offer and the number of shares
outstanding after the Offer will have increased proportionately more than the
increase in the size of the Fund's net assets. Although it is not possible to
state precisely the amount of such a decrease in net asset value because it is
not known at this time how many Shares will be subscribed for or what the
Subscription Price will be, such dilution might be substantial. For example,
assuming all Rights are exercised by Record Date Shareholders at the Estimated
Subscription Price of $7.31 per share (which is 93% of the Fund's net asset
value per share at May 1, 1998 the Fund's net asset value per share (after
payment of the Dealer Manager and soliciting fees and estimated offering
expenses) would be reduced by approximately $0.38 per share or 4.8%. The
dilution in net asset value will disproportionately affect shareholders who do
not exercise their rights.

Foreign Investments. Investors should understand and consider carefully
the substantial risks involved in investing in foreign securities. Foreign
securities, which are generally denominated in foreign currencies, and
utilization of forward contracts on foreign currencies involve certain
considerations comprising both risk and opportunity not typically associated
with investing in U.S. securities. These considerations include: fluctuations in
currency exchange rates; restrictions on foreign investment and repatriation of
capital; costs of converting foreign currencies into U.S. dollars; greater price
volatility and trading illiquidity; less public information on issuers of
securities; difficulty in enforcing legal rights outside of the United States;
lack of uniform accounting, auditing, and financial reporting standards; the
possible imposition of foreign taxes, exchange controls, and currency
restrictions; and possible political, economic, and social instability of
developing as well as developed countries including without limitation
nationalization, expropriation of assets, and war. Furthermore, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, and balance of payments position.
Securities of many foreign companies may be less liquid and their prices more
volatile than securities issued by comparable U.S. issuers. Transactions in
foreign securities may be subject to less efficient settlement practices. These
risks are often heightened when the Fund's investments are concentrated in a
small number of countries. In addition, because transactional and custodial
expenses for foreign securities are generally higher than for domestic
securities, the expense ratio of the Fund can be expected to be higher than
investment companies investing exclusively in domestic

6




securities. Foreign securities trading practices, including those involving
securities settlement where Fund assets may be released prior to receipt of
payment, may expose the Fund to increased risk in the event of a failed trade or
insolvency of a foreign broker/dealer. Legal remedies for defaults and disputes
may have to be pursued in foreign courts, whose procedures differ substantially
from those of U.S. courts.

The Fund may invest in securities of issuers located in emerging market
countries. The risks of investing in foreign securities may be greater with
respect to securities of issuers in, or denominated in the currencies of,
emerging market countries. The economies of emerging market countries generally
are heavily dependent upon international trade and accordingly, have been and
may continue to be adversely affected by trade barriers, exchange controls,
managed adjustments in relative currency values and other protectionist measures
imposed or negotiated by the countries with which they trade. These economies
also have been and may continue to be adversely affected by economic conditions
in the countries with which they trade. The securities markets of emerging
market countries are substantially smaller, less developed, less liquid and more
volatile than the securities markets of the U.S. and other developed countries.
Disclosure and regulatory standards in many respects are less stringent in
emerging market countries than in the U.S. and other developed countries. There
also may be a lower level of monitoring and regulation of emerging markets and
the activities of investors in such markets, and enforcement of existing
regulations may be extremely limited. Investing in local markets, particularly
in emerging market countries, may require the Fund to adopt special procedures,
seek local government approvals or take other actions, each of which may involve
additional costs to the Fund. Emerging market countries may also restrict
investment opportunities in issuers in industries deemed important to national
interests.

Fixed Income Securities. The Fund will normally invest at least 65% of
its net assets in investment grade fixed income securities. Securities rated BBB
or better by S&P or Baa or better by Moody's are investment grade but Moody's
considers securities rated Baa to have speculative characteristics. Changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity for issuers of such securities to make principal and income payments
than is the case for higher-rated securities. The Fund also may invest up to 35%
of its assets in fixed income securities rated below investment grade but not
lower than CCC by S&P or Caa by Moody's. These securities are deemed by those
agencies to be in poor standing and predominantly speculative; the issuers may
be in default on such securities or deemed without capacity to make scheduled
payments of income or repay principal, involving major risk exposure to adverse
conditions. The Fund is also permitted to purchase fixed income securities that
are not rated by S&P or Moody's but that the Investment Manager determines to be
of comparable quality to that of rated securities in which the Fund may invest.
Such securities are included in percentage limitations applicable to the
comparable rated securities. The values of fixed income securities will change
as market interest rates fluctuate. During periods of falling interest rates,
the values of outstanding fixed income securities generally rise. Conversely,
during periods of rising interest rates, the values of such securities generally
decline. The magnitude of these fluctuations generally will be greater for
securities with longer maturities.

Lower rated fixed income securities generally offer a higher current
yield than that available on higher grade issues. However, lower rated
securities involve higher risks, in that they are especially subject to adverse
changes in general economic conditions and in the industries in which the
issuers are engaged, to changes in the financial condition of the issuers, and
to price fluctuations in response to changes in interest rates. During periods
of economic downturn or rising interest rates, highly leveraged issuers may
experience financial stress which could adversely affect their ability to make
payments of principal and income and increase the possibility of default. In
addition, such issuers may not have more traditional methods of financing
available to them, and may be unable to repay debt at maturity by refinancing.
The risk of loss due to default by such issuers is significantly greater because
such securities frequently are unsecured and subordinated to the prior payment
of senior indebtedness.

Reverse Repurchase Agreements. The Fund may enter into reverse
repurchase agreements. In such agreements, the Fund sells the underlying
security to a creditworthy securities dealer or bank and the Fund agrees to
repurchase it at an agreed-upon date and price reflecting a market rate of
interest. Such agreements are considered to be borrowings and involve leveraging
which is speculative and increases both investment opportunity and investment
risk. When the Fund enters into reverse repurchase agreements, its custodian
will set aside in a segregated account cash or liquid securities whose value is
marked to the market daily with a market value at least equal to the repurchase
price. If necessary, assets will be added to the account daily so that the value
of the account will not be less than the amount of the Fund's purchase
commitment. Such agreements are subject to the risk that the benefit of
purchasing a security with the proceeds of the sale by the Fund will be less
than the cost to the Fund of transacting the reverse repurchase agreement. Such
agreements will be entered into when, in the judgment of the Investment Manager,
the risk is justified by the potential advantage of greater total return to
shareholders.

Leverage. From time to time the Fund borrows money from banks
(including its custodian bank), engages in reverse repurchase agreements and
issues senior securities, including debt and preferred stock, to purchase and
carry securities and pays interest thereon. These practices are referred to as
leverage, are speculative, and increase both investment opportunity and
investment risk. If the investment income on securities purchased with leverage
exceeds the interest paid on the leverage, the Fund's income will be
correspondingly higher. If the investment income fails to cover the Fund's
costs, including interest on leverage, or if there are losses, the net asset
value of the Fund's shares will decrease faster than would otherwise be the
case. When the Fund is leveraged, the 1940 Act requires the Fund to have asset
coverage of at least 200% for preferred securities it has issued and 300% for
its borrowings or the debt securities it has issued. Interest on money borrowed
is an expense the Fund would not otherwise incur, and it may therefore have
little or no investment income during periods of substantial borrowings.


7




Use of leverage by the Fund would increase the Fund's total return to
shareholders if the Fund's returns on its investments out of the proceeds of
such leverage exceed the cost of such leverage. Although there can be no
assurance that the use of leverage will be successful, the Investment Manager
believes that the ability to employ leverage may potentially increase yields and
total returns.

The Fund has a committed bank line of credit and the interest rate is
equal to the Federal Reserve Funds Rate plus 1.00 percentage points. At December
31, 1997, there was no balance outstanding. For the six months ended December
31, 1997, the weighted average interest rate was 6.40% based on the balances
outstanding from the line of credit and reverse repurchase agreements during the
period and the weighted average amount outstanding was $7,679,271 or 20.9% of
the Fund's weighted average total assets.

Illiquid Securities. The Fund may invest without limit in illiquid
securities, including securities with legal or contractual conditions or
restrictions on resale. Investing in such securities entails certain risks. The
primary risk is that the Fund may not be able to dispose of a security at the
desired price at the time it wishes to make such disposition. In addition, such
securities often sell at a discount from liquid and freely tradable securities
of the same class or type, although they are also usually purchased at an
equivalent discount which enhances yield while the securities are held by the
Fund. Such securities may also be more difficult to price accurately.

Dividends and Distributions; Return of Capital. It is the Fund's
present policy, which may be changed by the Board of Directors, to pay dividends
on a monthly basis to holders of Common Stock. The Fund recently adopted a
managed distribution policy to distribute on a monthly basis 0.83% of the Fund's
net asset value (10% on an annual basis). This policy is intended to provide
shareholders with a stable cash flow and to reduce any market price discount to
its net asset value. There can be no assurance that the Fund will be able to
maintain its current level of dividends, and the Board of Directors may, in its
sole discretion, change the Fund's current dividend policy or its current level
of dividends in response to market or other conditions. The Fund's ability to
maintain this distribution policy is a function of the yield generated by the
Fund's investments and the Fund's ability to realize capital gains, which
depends on market conditions at the time those investments are made and on the
performance of those investments. To the extent that the Fund's portfolio
investments generate returns exceeding that which is required to pay any target
level of dividends set by the Board of Directors, the Fund may decide to retain
and accumulate that portion of the Fund's return which exceeds such dividend
level and may pay applicable taxes thereon, including any federal income or
excise taxes. Alternatively, to the extent that the Fund's current return is not
sufficient to pay a target level of dividends set by the Board of Directors, the
Fund may distribute to holders of its Common Stock all or a portion of any
retained earnings or make a return of capital to maintain such target level.
Based upon current market conditions, the Investment Manager believes that the
net proceeds of the Offer may be invested in securities producing a rate of
return equal to or above the rate of return that the Fund is currently earning
on its portfolio. Accordingly, the Investment Manager believes that earnings
from new investments derived from the net proceeds of the Offer will better
enable the Fund to maintain its current level of dividends. The Investment
Manager also believes that the increase in total net assets of the Fund
resulting from a well-subscribed rights offering may result in certain economies
of scale and, accordingly, a lower expense ratio for the Fund. Based upon
information provided by the Investment Manager and current market conditions,
the Board of Directors has determined that the Offer will not result in any
material adverse change to the Fund's current dividend policy or its ability to
maintain its current level of dividends. Should the Fund's annual total return
(on a net asset value basis), inclusive of earned income and capital
appreciation, be less than 10%, however, the current level of dividends per
share paid pursuant to the managed 10% distribution policy described above, may
decline. Whether the Offer is subscribed for or not, however, there can be no
assurance that the Fund can or will maintain its current dividend policy or
current level of dividends.

Market Value and Net Asset Value. Shares of closed-end investment
companies frequently trade at a discount to net asset value. This characteristic
of shares of a closed-end fund is a risk separate and distinct from the risk
that the Fund's net asset value may decrease. The Fund cannot predict whether
its shares will trade at, below or above net asset value. In addition, changes
in market yields will affect the Fund's net asset value since prices of
fixed-income securities generally increase when interest rates decline and
decrease when interest rates rise. Since the commencement of the Fund's
operations as a closed-end investment company until the adoption of the managed
distribution policy described above the Fund's shares generally traded in the
market at a discount to net asset value. Since the adoption of the managed
distribution policy, the Fund's shares generally have traded at or above net
asset value. See "Net Asset Value" and "Common Stock."

Year 2000 Risks. Like other investment companies and financial and
business organizations around the world, the Fund will be adversely affected if
the computer systems used by Bull & Bear Advisers, Inc. and the Fund's other
service providers do not properly process and calculate date-related information
and data from and after January 1, 2000. This is commonly known as the "Year
2000 Problem." The Fund is taking steps that it believes are reasonably designed
to address the Year 2000 Problem with respect to the computer systems it uses
and to obtain satisfactory assurances that comparable steps are being taken by
each of the Fund's major service providers. The Fund does not expect to incur
any significant costs in order to address the Year 2000 Problem. However, at
this time there can be no assurances that these steps will be sufficient to
avoid any adverse impact on the Fund.


8




FEE TABLE

The following table sets forth certain fees and expenses of the Fund.


SHAREHOLDER TRANSACTION EXPENSES
Sales Load (as a percentage of the
Subscription Price per Share) (1)................................ 4.00%

ANNUAL EXPENSES (as a percentage of net assets)
Management Fees................................................... 0.70%
Interest Payments on Borrowed Funds............................... 1.99%
Other Expenses (2)................................................ 0.66%
-----------

TOTAL ANNUAL EXPENSES (2)........................................... 3.35%
===========



EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ------ ------- ------- --------

You would pay the following
expenses on a $1,000 investment $74 $144 $217 $407
assuming a 5% annual return (3).......

(1) The Dealer Manager and the other broker-dealers soliciting the exercise
of Rights will receive aggregate soliciting fees equal to 2.375% of the
Subscription Price per Share for each Share issued upon exercise of the
Rights and pursuant to the Over-Subscription Privilege. The Fund has
also agreed to pay the Dealer Manager a fee for financial advisory and
marketing services in connection with the Offer equal to 1.625% of the
Subscription Price per Share for Shares issued upon exercise of the
Rights and pursuant to the Over-Subscription Privilege. These fees will
be borne by the Fund and indirectly by all of the Fund's shareholders,
including those shareholders who do not exercise their Rights.

(2) Based upon annualized expenses for the six month period ended December
31, 1997 as a percentage of average net assets and on the net assets of
the Fund after giving effect to the anticipated net proceeds of the
Offer, including proceeds from the issuance of up to 25% of the Shares
pursuant to the Over-Subscription Privilege. Does not include offering
expenses of the Fund incurred in connection with the Offer, estimated
at $300,000. Such offering expenses will be charged against paid-in
capital of the Fund.

(3) The example reflects the Sales Load and other expenses of the Fund
incurred in connection with the Offer and assumes
that all of the Rights are exercised.

THE PURPOSE OF THE FOREGOING TABLE AND EXAMPLE IS TO ASSIST
SHAREHOLDERS IN UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT AN INVESTOR IN
THE FUND BEARS, DIRECTLY OR INDIRECTLY, BUT SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR RATE OF RETURN. THE ACTUAL EXPENSES
OF THE FUND MAY BE GREATER OR LESS THAN THOSE SHOWN.
For more complete descriptions of certain of the Fund's costs and expenses, see
"The Investment Manager" below and "The Investment Management Agreement" in the
SAI.

9






FINANCIAL HIGHLIGHTS

The table below sets forth selected financial data for a share of
Common Stock outstanding throughout each period presented. The per share
operating performance and ratios for each of the periods, other than the six
month period ended December 31, 1997 (which is unaudited), have been audited by
Tait, Weller & Baker, the Fund's independent accountants, as stated in their
report which is incorporated by reference into the SAI. The following
information should be read in conjunction with the Financial Statements and
Notes thereto, which are incorporated by reference into the SAI.