EX-99.77B ACCT LTTR

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Flaherty & Crumrine Preferred Income Opportunity Fund
Incorporated

In planning and performing our audit of the financial
statements of Flaherty & Crumrine Preferred Income
Opportunity Fund Incorporated (the Fund) as of and for the
year ended November 30, 2007, in accordance with the
standards of the Public Company Accounting Oversight Board
(United States), we considered the Fund's internal control
over financial reporting, including controls over
safeguarding securities, as a basis for designing our
auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the
requirements of Form N-SAR, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's
internal control over financial reporting. Accordingly, we
express no such opinion.

Management of the Fund is responsible for establishing and
maintaining effective internal control over financial
reporting. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected
benefits and related costs of controls. A company's
internal control over financial reporting is a process
designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance
with generally accepted accounting principles. A company's
internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit
preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in
accordance with authorizations of management and directors
of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets
that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

A deficiency in internal control over financial reporting
exists when the design or operation of a control does not
allow management or employees, in the normal course of
performing their assigned functions, to prevent or detect
misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a
reasonable possibility that a material misstatement of the
Fund's annual or interim financial statements will not be
prevented or detected on a timely basis.

Our consideration of the Fund's internal control over
financial reporting was for the limited purpose described
in the first paragraph and would not necessarily disclose
all deficiencies in internal control that might be material
weaknesses under standards established by the Public
Company Accounting Oversight Board (United States).
However, we noted no deficiencies in the Fund's internal
control over financial reporting and its operation,
including controls over safeguarding securities, that we
consider to be a material weakness as defined above as of
November 30, 2007.

This report is intended solely for the information and use
of management and the Board of Directors of Flaherty &
Crumrine Preferred Income Opportunity Fund Incorporated and
the Securities and Exchange Commission and is not intended
to be and should not be used by anyone other than these
specified parties.

/s/ KPMG LLP

Boston, Massachusetts
January 18, 2008

EX-99.77D POLICIES

EXHIBIT 77D

FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY FUND INCORPORATED
(the "Fund")


     The investment policies of the Fund have been changed effective
July 17, 2007 to allow the Fund to invest in:


INVESTMENT COMPANY SECURITIES.   The Fund may invest in
shares of other investment companies subject to the
limitations of the Investment Company Act of 1940, as
amended, the rules and regulations thereunder and in
certain circumstances Securities and Exchange Commission
exemptive orders.  To the extent that investment advisory
or brokerage expenses of an investment company are
reflected in the price of its shares held in the Fund's
portfolio, there will be a duplication of such expenses.

EX-99.77Q1 OTHR EXHB

EXHIBIT 77Q(1)(b)

FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY FUND INCORPORATED
(the "Fund")

     The following resolution was adopted by the Board of Directors
of the Fund on July 17, 2007 in connection with a modification to a
non-fundamental investment policy:


WHEREAS, 	The Securities and Exchange
Commission ("SEC") has adopted new
rules under the Investment Company
Act of 1940, as amended (the "1940
Act") that increase the ability of
investment companies to invest in
the shares of other investment
companies; and

WHEREAS, 	Rule 12d1-1 of the 1940 Act ("Rule
12d1-1") exempts investments in
money market mutual funds from
certain prohibitions relating to
investments in other investment
companies under Section
12(d)(1)(A) of the 1940 Act; and

WHEREAS, 	In light of the provisions of Rule
12d1-1, the Board of Directors
desires to modify the Fund's
current non-fundamental investment
policy regarding investments in
Investment Company Securities.

NOW THEREFORE BE IT

RESOLVED:	That the Board of Directors hereby
approves the modification of the
Fund's current non-fundamental
investment policy regarding
Investment Company Securities as
follows:

INVESTMENT COMPANY SECURITIES.
The Fund may invest in shares
of other investment companies
subject to the limitations of the
1940 Act, the rules and
regulations thereunder and in
certain circumstances SEC
exemptive orders.  To the extent
that investment advisory or
brokerage expenses of an
investment company are reflected
in the price of its shares held in
the Fund's portfolio, there will
be a duplication of such expenses.