N-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS

OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-06495

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

(Exact name of registrant as specified in charter)

301 E. Colorado Boulevard, Suite 720

Pasadena, CA 91101

(Address of principal executive offices) (Zip code)

R. Eric Chadwick

Flaherty & Crumrine Incorporated

301 E. Colorado Boulevard, Suite 720

Pasadena, CA 91101

(Name and address of agent for service)

Registrant’s telephone number, including area code: 626-795-7300

Date of fiscal year end: November 30

Date of reporting period: August 31, 2015

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Schedule of Investments.

The Schedule(s) of Investments is attached herewith.

FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY FUND

To the Shareholders of Flaherty & Crumrine Preferred Income Opportunity Fund (“PFO”):

In many markets, investors experienced a bumpy, downhill ride during the third fiscal quarter¹. However, the preferred securities market was better behaved, with only modest negative performance for the quarter. Total return² on net asset value (“NAV”) for your Fund was -0.7% for the quarter and 2.4% for the first nine months of fiscal 2015. Market price of Fund shares didn’t fare as well, as Fund shares went from trading at a premium over NAV to a discount. Total return on market price of Fund shares over the same periods were -12.5% and -6.5%, respectively.

The world is always an uncertain place, and a handful of those uncertainties attracted investor focus late in the quarter. Forecasts for slower economic growth in China and a policy decision in mid-August to devalue the Chinese currency were unwelcome surprises. The action sharpened market focus on what slower growth in China could mean for economies around the world. Simultaneously, European economic growth slipped, after improving in late 2014 and early 2015. Equity markets sold off sharply: better-performing markets “merely” gave up 2015 year-to-date gains and many markets, especially in Asia, traded materially lower. Credit markets (including preferred securities) outperformed equities, but they were still generally in negative territory.

Lower prices for oil and other commodities, a strong U.S. dollar, and an unpredictable (if entertaining) 2016 presidential campaign also contributed to higher volatility in equity markets and, to a lesser extent, credit markets.

U.S. monetary policy added to market uncertainty when the Federal Reserve indicated it was nearing “lift-off” for monetary policy—and then demurred. Having just passed its September meeting, we now know the Federal Open Market Committee (“FOMC”) delayed an initial rate hike for at least another month or three—possibly even until 2016. Monetary policy in the U.S. moved into uncharted territory many years ago with multiple rounds of Quantitative Easing (“QE”). As we move into the next phase of removing monetary accommodation, markets are understandably worried about policy mistakes—moving too fast, or not moving fast enough. Meanwhile, monetary policy in many other areas of the world continues to be very accommodative, and all signs point to continued global easing over the near-term (mostly in the form of QE). Whenever it decides to raise U.S. rates, we expect the FOMC to move slowly in light of global headwinds to growth.

Despite this sea of uncertainty, the preferred securities market experienced comparatively smooth sailing. Prices drifted a bit lower in general, but high income offset much of that price weakness to keep total returns on preferred securities only slightly negative overall. A steady stream of high income, over time, can offset price weakness, which is why long-term creditworthiness is a focus of the Fund.

¹  June 1, 2015—August 31, 2015

²  Following the methodology required by the Securities and Exchange Commission, total return assumes dividend reinvestment.

Credit quality remains healthy, with only modest impacts from many of the broader issues discussed above. The preferred securities market (absent some energy issuers) has limited direct exposure to oil or other commodity markets. Even banks that lend to the energy sector have limited exposure, which makes it unlikely that this would be an issue for creditworthiness of the broader banking system. The preferred securities market has no direct credit exposure to China, although the impact of an economic slowdown in China may be felt in the U.S. over time. Supply in the domestic preferred securities market trended lower during the quarter, which is supportive of spreads, and yields continue to be attractive when compared to fixed-income alternatives.

Many of the uncertainties we discussed will persist for the foreseeable future, but we believe their impact on the preferred securities market will remain muted. The market is always subject to weakening in sympathy with other markets, but we believe preferreds continue to be an attractive asset class that will hold their own as events unfold over coming months and years.

As always, we encourage you to visit the Fund’s website, www.preferredincome.com for timely and important information.

Sincerely,

The Flaherty & Crumrine Portfolio Management Team:

R. Eric Chadwick

Donald F. Crumrine

Bradford S. Stone

September 22, 2015

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Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

PORTFOLIO OVERVIEW

August 31, 2015 (Unaudited)

Fund Statistics
Net Asset Value	$	11.19
Market Price	$	10.34
Discount		7.60	%
Yield on Market Price		8.47	%
Common Stock Shares Outstanding		12,376,412

Moody’s Ratings* % of Net Assets†

A	1.9%
BBB	66.6%
BB	20.9%
Below “BB”	1.5%
Not Rated**	7.9%
Below Investment Grade***	24.1%

* Ratings are from Moody’s Investors Service, Inc. “Not Rated” securities are those with no ratings available from Moody’s.

** Does not include net other assets and liabilities of 1.2%.

*** Below investment grade by all of Moody’s, S&P, and Fitch.

Industry Categories % of Net Assets†

Top 10 Holdings by Issuer	% of Net Assets†
JPMorgan Chase		4.8%
Liberty Mutual Group		4.6%
HSBC PLC		4.5%
MetLife		4.5%
Wells Fargo & Company		4.0%
Fifth Third Bancorp		3.6%
M&T Bank Corporation		3.3%
Enbridge Energy Partners		3.0%
Morgan Stanley		2.9%
PNC Financial Services Group		2.8%

% of Net Assets****†
Holdings Generating Qualified Dividend Income (QDI) for Individuals	60%
Holdings Generating Income Eligible for the Corporate Dividends Received Deduction (DRD)	48%

**** This does not reflect year-end results or actual tax categorization of Fund distributions. These percentages can, and do, change, perhaps significantly, depending on market conditions. Investors should consult their tax advisor regarding their personal situation.

† Net Assets includes assets attributable to the use of leverage.

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Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

PORTFOLIO OF INVESTMENTS

August 31, 2015 (Unaudited)

Shares/$ Par			Value
	Preferred Securities — 94.0%
		Banking — 47.0%
	16,773	Astoria Financial Corp., 6.50%, Series C	$	426,579	*
		Bank of America Corporation:
$	2,540,000	8.00%, Series K		2,676,525	*
$	920,000	8.125%, Series M		972,900	*(1)
		Barclays Bank PLC:
	56,000	7.10%, Series 3		1,437,520	**(3)
	4,700	7.75%, Series 4		121,448	**(3)
	78,300	8.125%, Series 5		2,028,753	**(1)(3)
$	2,100,000	BNP Paribas, 7.375%, 144A****		2,153,025	**(3)
	6,333	Capital One Financial Corporation, 6.70%, Series D		168,531	*
		Citigroup, Inc.:
	81,200	6.875%, Series K		2,172,303	*(1)
	74,694	7.125%, Series J		2,063,160	*
$	299,000	8.40%, Series E		338,991	*
	26,716	City National Corporation, 6.75%, Series D		760,337	*
		CoBank ACB:
	18,100	6.125%, Series G, 144A****		1,706,492	*
	9,000	6.20%, Series H, 144A****		904,500	*
	10,000	6.25%, Series F, 144A****		1,045,625	*(1)
$	4,500,000	Colonial BancGroup, 7.114%, 144A****		6,750	(4)(5)††
	13,300	Cullen/Frost Bankers, Inc., 5.375%, Series A		335,313	*
	274,600	Fifth Third Bancorp, 6.625%, Series I		7,568,662	*(1)
		First Horizon National Corporation:
	750	First Tennessee Bank, Adj. Rate, 3.75%(6), 144A****		540,727	*(1)
	1	FT Real Estate Securities Company, 9.50%, 144A****		1,302,500
	104,000	First Niagara Financial Group, Inc., 8.625%, Series B		2,743,676	*(1)
	29,050	First Republic Bank, 6.70%, Series A		758,830	*(1)
		Goldman Sachs Group:
$	195,000	5.70%, Series L		196,462	*
	50,000	6.375%, Series K		1,303,500	*
		HSBC PLC:
$	800,000	HSBC Capital Funding LP, 10.176%, 144A****		1,202,000	(1)(3)
	150,000	HSBC Holdings PLC, 8.00%, Series 2		3,835,875	**(1)(3)
	130,000	HSBC USA, Inc., 6.50%, Series H		3,314,025	*(1)
		ING Groep NV:
	30,000	7.05%		770,745	**(3)
	21,700	7.20%		558,612	**(3)

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Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

PORTFOLIO OF INVESTMENTS (Continued)

August 31, 2015 (Unaudited)

Shares/$ Par			Value
	Preferred Securities — (Continued)
		Banking — (Continued)
		JPMorgan Chase & Company:
$	300,000	6.00%, Series R	$	297,750	*
	56,450	6.70%, Series T		1,489,151	*(1)
$	4,167,000	6.75%, Series S		4,401,394	*(1)
$	3,750,000	7.90%, Series I		3,942,188	*(1)
		M&T Bank Corporation:
$	2,240,000	6.450%, Series E		2,396,800	*(1)
$	4,393,000	6.875%, Series D, 144A****		4,447,913	*(1)
		Morgan Stanley:
	148,000	6.875%, Series F		4,009,320	*(1)
	77,200	7.125%, Series E		2,147,125	*(1)
	216,500	PNC Financial Services Group, Inc., 6.125%, Series P		5,977,890	*(1)
$	1,775,000	RaboBank Nederland, 11.00%, 144A****		2,215,821	(1)(3)
	35,000	Regions Financial Corporation, 6.375%, Series B		907,288	*
		Royal Bank of Scotland Group PLC:
	7,500	6.40%, Series M		189,450	**(3)
	15,000	6.60%, Series S		378,900	**(3)
	99,500	7.25%, Series T		2,538,245	**(1)(3)
		Sovereign Bancorp:
	2,600	Sovereign REIT, 12.00%, Series A, 144A****		3,441,750
	83,700	State Street Corporation, 5.90%, Series D		2,193,903	*(1)
	10,000	Texas Capital Bancshares Inc., 6.50%, Series A		255,415	*
	35,000	US Bancorp, 6.50%, Series F		1,006,338	*
	59,300	Webster Financial Corporation, 6.40%, Series E		1,483,241	*
		Wells Fargo & Company:
	56,200	5.85%, Series Q		1,446,166	*
$	1,750,000	5.875%, Series U		1,793,750	*(1)(2)
	34,400	6.625%, Series R		948,752	*
$	1,139,000	7.98%, Series K		1,217,306	*
	104,500	8.00%, Series J		2,958,656	*(1)
		Zions Bancorporation:
$	1,000,000	7.20%, Series J		1,047,500	*(1)
	85,200	7.90%, Series F		2,308,920	*(1)
				98,855,298

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Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

PORTFOLIO OF INVESTMENTS (Continued)

August 31, 2015 (Unaudited)

Shares/$ Par			Value
	Preferred Securities — (Continued)
		Financial Services — 0.9%
$	650,000	General Electric Capital Corp., 7.125%, Series A	$	750,717	*(1)
		HSBC PLC:
	46,081	HSBC Finance Corporation, 6.36%, Series B		1,155,366	*(1)
				1,906,083
		Insurance — 22.4%
		Ace Ltd.:
$	1,200,000	Ace Capital Trust II, 9.70% 04/01/30		1,776,000	(1)(2)(3)
	80,000	Allstate Corp., 6.625%, Series E		2,121,000	*(1)
$	375,000	Aon Corporation, 8.205% 01/01/27		480,000	(1)(2)
	105,000	Arch Capital Group Ltd., 6.75%, Series C		2,810,063	**(1)(3)
		AXA SA:
$	1,453,000	6.379%,144A****		1,549,261	**(1)(2)(3)
$	500,000	8.60%12/15/30		672,500	(3)
	187,000	Axis Capital Holdings Ltd., 6.875%, Series C		5,041,801	**(1)(3)
	95,000	Delphi Financial Group, 7.376%, 05/15/37		2,380,937	(1)(2)
	27,250	Endurance Specialty Holdings, 7.50%, Series B		702,546	**(3)
$	2,305,000	Everest Re Holdings, 6.60%, 05/15/37		2,235,850	(1)(2)
	10,000	Hartford Financial Services Group, Inc., 7.875%		312,215
$	4,943,000	Liberty Mutual Group, 10.75% 06/15/58, 144A****		7,439,215	(1)(2)
		MetLife:
$	2,704,000	MetLife, Inc., 10.75% 08/01/39		4,287,192	(1)(2)
$	350,000	MetLife Capital Trust IV, 7.875% 12/15/37, 144A****		437,500	(1)(2)
$	3,350,000	MetLife Capital Trust X, 9.25% 04/08/38, 144A****		4,648,125	(1)(2)
	24,000	PartnerRe Ltd., 7.25%, Series E		657,396	**(1)(3)
$	241,000	Prudential Financial, Inc., 5.625% 06/15/43		247,989
		QBE Insurance:
$	1,990,000	QBE Capital Funding III Ltd., 7.25% 05/24/41, 144A****		2,198,453	(1)(3)
	7,565	RenaissanceRe Holdings Ltd., 6.08%, Series C		188,822	**(3)
		Unum Group:
$	2,750,000	Provident Financing Trust I, 7.405% 03/15/38		3,190,000	(1)(2)
		XL Group PLC:
$	4,750,000	XL Capital Ltd., 6.50%, Series E		3,752,500	(1)(3)
				47,129,365

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Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

PORTFOLIO OF INVESTMENTS (Continued)

August 31, 2015 (Unaudited)

Shares/$ Par			Value
	Preferred Securities — (Continued)
		Utilities — 14.0%
		Baltimore Gas & Electric Company:
	6,579	6.70%, Series1993	$	667,768	*(1)
	2,500	7.125%, Series1993		254,063	*
		Commonwealth Edison:
$	2,350,000	COMED Financing III, 6.35% 03/15/33		2,459,766	(1)(2)
$	2,700,000	Dominion Resources, Inc., 7.50% 06/30/66		2,413,125	(1)(2)
	22,500	Entergy Louisiana, Inc., 6.95%		2,252,812	*
	80,000	Entergy Mississippi, Inc., 6.25%		2,015,000	*
	16,937	Georgia Power Company, 6.50%, Series 2007A		1,779,974	*(1)
	15,035	Gulf Power Company, 6.00%, Series 1		1,500,310	*(1)
	24,000	Indianapolis Power & Light Company, 5.65%		2,481,751	*(1)
	48,000	Integrys Energy Group, Inc., 6.00%		1,287,000	(1)(2)
		Nextera Energy:
$	1,600,000	FPL Group Capital, Inc., 6.65% 06/15/67, Series C		1,332,000	(1)(2)
$	750,000	FPL Group Capital, Inc., 7.30% 09/01/67, Series D		747,563	(1)(2)
		PECO Energy:
$	1,500,000	PECO Energy Capital Trust III, 7.38% 04/06/28, Series D		1,719,632	(1)(2)
		PPL Corp:
	35,000	PPL Capital Funding, Inc., 5.90%, Series B		897,102	(1)
$	1,250,000	PPL Capital Funding, Inc., 6.70% 03/30/67, Series A		1,065,996	(1)(2)
$	3,350,000	Puget Sound Energy, Inc., 6.974% 06/01/67, Series A		2,939,625	(1)(2)
	31,000	Southern California Edison, 6.50%, Series D		3,243,375	*(1)
	3,000	Wisconsin Public Service Corporation, 6.88%		305,063	*
				29,361,925
		Energy — 3.2%
$	6,295,000	Enbridge Energy Partners LP, 8.05% 10/01/37		6,310,737	(1)(2)
$	400,000	Enterprise Products Operating L.P., 8.375% 08/01/66, Series A		393,000
				6,703,737
		Real Estate Investment Trust (REIT) — 3.6%
	30,206	Kimco Realty Corporation, 6.90%, Series H		766,326
		National Retail Properties, Inc.:
	40,000	5.70%, Series E		986,500	(1)(2)
	19,460	6.625%, Series D		509,511

7

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

PORTFOLIO OF INVESTMENTS (Continued)

August 31, 2015 (Unaudited)

Shares/$ Par			Value
	Preferred Securities — (Continued)
		Real Estate Investment Trust (REIT) — (Continued)
		PS Business Parks, Inc.:
	8,243	5.70%, Series V	$	199,493
	40,000	6.45%, Series S		1,044,100	(1)(2)
	7,500	6.875%, Series R		190,500
	13,000	Public Storage, 6.375%, Series Y		347,912
	100,629	Realty Income Corporation, 6.625%, Series F		2,674,719	(1)(2)
	36,685	Regency Centers Corporation, 6.625%, Series 6		953,902
				7,672,963
		Miscellaneous Industries — 2.9%
$	3,150,000	Land O’ Lakes, Inc., 8.00%, 144A****		3,227,963	*
	32,700	Ocean Spray Cranberries, Inc., 6.25%, 144A****		2,954,242	*
				6,182,205
		Total Preferred Securities (Cost $191,808,310)		197,811,576
	Corporate Debt Securities — 4.9%
		Banking — 2.7%
$	2,500,000	Regions Financial Corporation, 7.375% 12/10/37, Sub Notes		3,133,928	(1)(2)
	75,000	Texas Capital Bancshares Inc., 6.50% 09/21/42, Sub Notes		1,882,035	(1)(2)
	20,000	Zions Bancorporation, 6.95% 09/15/28, Sub Notes		561,030
				5,576,993
		Financial Services — 0.3%
	20,082	Affiliated Managers Group, Inc., 6.375% 08/15/42		533,207
	5,048	Raymond James Financial, 6.90% 03/15/42		134,239
				667,446
		Insurance — 1.1%
$	1,850,000	Liberty Mutual Insurance, 7.697% 10/15/97, 144A****		2,327,616	(1)(2)
				2,327,616
		Energy — 0.5%
$	904,000	Energy Transfer Partners LP, 8.25% 11/15/29		1,082,332	(1)(2)
				1,082,332

8

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

PORTFOLIO OF INVESTMENTS (Continued)

August 31, 2015 (Unaudited)

Shares/$ Par			Value
	Corporate Debt Securities — (Continued)
		Communication — 0.3%
	24,200	Qwest Corporation, 7.375% 06/01/51	$	627,324
				627,324
		Total Corporate Debt Securities (Cost $8,610,776)		10,281,711
	Common Stock — 0.0%
		Insurance — 0.0%
	17,993	WMI Holdings Corporation, 144A****		41,384	*†
				41,384
		Total Common Stock (Cost $900,000)		41,384
	Money Market Fund — 0.1%
		BlackRock Liquidity Funds:
	210,090	T-Fund, Institutional Class		210,090
		Total Money Market Fund (Cost $210,090)		210,090

Total Investments (Cost $201,529,176***)	99.0%			208,344,761
Other Assets And Liabilities (Net)	1.0%			2,093,379
Total Managed Assets	100.0%	‡	$	210,438,140
Loan Principal Balance				(72,000,000	)
Total Net Assets Available To Common Stock			$	138,438,140

9

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

PORTFOLIO OF INVESTMENTS (Continued)

August 31, 2015 (Unaudited)

* Securities eligible for the Dividends Received Deduction and distributing Qualified Dividend Income.

** Securities distributing Qualified Dividend Income only.

*** Aggregate cost of securities held.

**** Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional buyers. At August 31, 2015, these securities amounted to $43,790,862 or 20.8% of total managed assets.

⁽¹⁾  All or a portion of this security is pledged as collateral for the Fund’s loan. The total value of such securities was $133,974,534 at August 31, 2015.

⁽²⁾  All or a portion of this security has been rehypothecated. The total value of such securities was $53,356,428 at August 31, 2015.

⁽³⁾  Foreign Issuer.

⁽⁴⁾  Illiquid security (designation is unaudited).

⁽⁵⁾  Valued at fair value as determined in good faith by or under the direction of the Board of Directors as of August 31, 2015.

⁽⁶⁾  Represents the rate in effect as of the reporting date.

† Non-income producing.

†† The issuer has filed for bankruptcy protection. As a result, the Fund may not be able to recover the principal invested and also does not expect to receive income on this security going forward.

‡ The percentage shown for each investment category is the total value of that category as a percentage of total managed assets.

10

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE TO COMMON STOCK⁽¹⁾

For the period from December 1, 2014 through August 31, 2015 (Unaudited)

	Value
OPERATIONS:
Net investment income	$	8,220,743
Net realized gain/(loss) on investments sold during the period		1,234,488
Change in net unrealized appreciation/(depreciation) of investments		(6,185,369	)
Net increase in net assets resulting from operations		3,269,862
DISTRIBUTIONS:
Dividends paid from net investment income to Common Stock Shareholders(2)		(8,121,085	)
Total Distributions to Common Stock Shareholders		(8,121,085	)
FUND SHARE TRANSACTIONS:
Increase from shares issued under the Dividend Reinvestment and Cash Purchase Plan		552,022
Net increase in net assets available to Common Stock resulting from Fund share transactions		552,022
NET DECREASE IN NET ASSETS AVAILABLE TO COMMON STOCK
FOR THE PERIOD	$	(4,299,201	)
NET ASSETS AVAILABLE TO COMMON STOCK:
Beginning of period	$	142,737,341
Net decrease in net assets during the period		(4,299,201	)
End of period	$	138,438,140

⁽¹⁾  These tables summarize the nine months ended August 31, 2015 and should be read in conjunction with the Fund’s audited financial statements, including notes to financial statements, in its Annual Report dated November 30, 2014.

⁽²⁾  May include income earned, but not paid out, in prior fiscal year.

11

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

FINANCIAL HIGHLIGHTS⁽¹⁾

For the period from December 1, 2014 through August 31, 2015 (Unaudited)

For a Common Stock share outstanding throughout the period

PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period	$	11.58
INVESTMENT OPERATIONS:
Net investment income		0.67
Net realized and unrealized gain/(loss) on investments		(0.40	)
Total from investment operations		0.27
DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS:
From net investment income		(0.66	)
Total distributions to Common Stock Shareholders		(0.66	)
Net asset value, end of period	$	11.19
Market value, end of period	$	10.34
Common Stock shares outstanding, end of period		12,376,412
RATIOS TO AVERAGE NET ASSETS AVAILABLE TO COMMON STOCK SHAREHOLDERS:
Net investment income†		7.71	%*
Operating expenses including interest expense		1.87	%*
Operating expenses excluding interest expense		1.36	%*
SUPPLEMENTAL DATA: ††
Portfolio turnover rate		5	%**
Total managed assets, end of period (in 000’s)	$	210,438
Ratio of operating expenses including interest expense to total managed assets		1.25	%*
Ratio of operating expenses excluding interest expenseto total managed assets		0.90	%*

⁽¹⁾  These tables summarize the nine months ended August 31, 2015 and should be read in conjunction with the Fund’s audited financial statements, including notes to financial statements, in its Annual Report dated November 30, 2014.

* Annualized.

** Not Annualized.

† The net investment income ratios reflect income net of operating expenses, including interest expense.

†† Information presented under heading Supplemental Data includes loan principal balance.

12

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

FINANCIAL HIGHLIGHTS (Continued)

Per Share of Common Stock (Unaudited)

	Total Dividends Paid		Net Asset Value		NYSE Closing Price		Dividend Reinvestment Price(1)
December 31, 2014	$	0.0730	$	11.54	$	11.55	$	11.54
January 30, 2015		0.0730		11.64		12.26		11.65
February 27, 2015		0.0730		11.63		12.30		11.69
March 31, 2015		0.0730		11.71		12.41		11.79
April 30, 2015		0.0730		11.59		12.55		11.92
May 29, 2015		0.0730		11.50		12.07		11.50
June 30, 2015		0.0730		11.28		10.63		10.74
July 31, 2015		0.0730		11.33		10.40		10.42
August 31, 2015		0.0730		11.19		10.34		10.33

⁽¹⁾ Whenever the net asset value per share of the Fund’s Common Stock is less than or equal to the market price per share on the reinvestment date, new shares issued will be valued at the higher of net asset value or 95% of the then current market price. Otherwise, the reinvestment shares of Common Stock will be purchased in the open market.

13

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

NOTES TO FINANCIAL STATEMENTS (Unaudited)

1. Aggregate Information for Federal Income Tax Purposes

At August 31, 2015, the aggregate cost of securities for federal income tax purposes was $206,080,609, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $13,608,925 and the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $11,344,773.

2. Additional Accounting Standards

Fair Value Measurements: The Fund has analyzed all existing investments to determine the significance and character of all inputs to their fair value determination. The levels of fair value inputs used to measure the Fund’s investments are characterized into a fair value hierarchy. Where inputs for an asset or liability fall into more than one level in the fair value hierarchy, the investment is classified in its entirety based on the lowest level input that is significant to that investment’s valuation. The three levels of the fair value hierarchy are described below:

•	Level 1 –	quoted prices in active markets for identical securities
•	Level 2 –	other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•	Level 3 –	significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Transfers in and out of levels are recognized at market value at the end of the period.

14

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

A summary of the inputs used to value the Fund’s investments as of August 31, 2015 is as follows:

	Total Value at August 31, 2015		Level 1 Quoted Price		Level 2 Significant Observable Inputs		Level 3 Significant Unobservable Inputs
Preferred Securities
Banking	$	98,855,298	$	80,654,729	$	18,193,819	$	6,750
Financial Services		1,906,083		1,906,083		—		—
Insurance		47,129,365		25,207,149		21,922,216		—
Utilities		29,361,925		7,742,786		21,619,139		—
Energy		6,703,737		6,703,737		—		—
Real Estate Investment Trust (REIT),		7,672,963		7,672,963		—		—
Miscellaneous Industries		6,182,205		—		6,182,205		—
Corporate Debt Securities
Banking		5,576,993		2,443,065		3,133,928		—
Financial Services		667,446		667,446		—		—
Insurance		2,327,616		—		2,327,616		—
Energy		1,082,332		—		1,082,332		—
Communication		627,324		627,324		—		—
Common Stock
Insurance		41,384		41,384		—		—
Money Market Fund		210,090		210,090		—		—
Total Investments	$	208,344,761	$	133,876,756	$	74,461,255	$	6,750

During the reporting period, securities with an aggregate market value of $7,439,215 were transferred into Level 2 from Level 1. The securities were transferred due to a decrease in the quantity and quality of the information related to trading activity or broker quotes for these securities. During the reporting period, there were no transfers into Level 1 from Level 2.

The fair values of the Fund’s investments are generally based on market information and quotes received from brokers or independent pricing services that are approved by the Board of Directors and are unaffiliated with the Adviser. To assess the continuing appropriateness of security valuations, management, in consultation with the Adviser, regularly compares current prices to prior prices, prices across comparable securities, actual sale prices for securities in the Fund’s portfolio, and market information obtained by the Adviser as a function of being an active market participant.

Securities with quotes that are based on actual trades or actionable bids and offers with a sufficient level of activity on or near the measurement date are classified as Level 1. Securities that are priced using quotes derived from implied values, indicative bids and offers, or a limited number of actual trades—or the same information for securities that are similar in many respects to those being valued—are classified as Level 2. If market information is not available for securities being valued, or materially-comparable securities, then those securities are classified as Level 3. In considering market information, management evaluates changes in liquidity, willingness of a broker to execute at the quoted price, the depth and consistency of prices from pricing services, and the existence of observable trades in the market.

15

Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

			Preferred Securities
	Total Investments		Banking
Balance as of 11/30/14	$	6,750	$	6,750
Accrued discounts/premiums		—		—
Realized gain/(loss)		—		—
Change in unrealized appreciation/(depreciation)		—		—
Purchases		—		—
Sales		—		—
Transfer in		—		—
Transfer out		—		—
Balance as of 08/31/15	$	6,750	$	6,750

For the nine months ended August 31, 2015, total change in unrealized gain/(loss) on Level 3 securities still held at period-end and included in the change in net assets was $0.

The following table summarizes the valuation techniques used and unobservable inputs developed to determine the fair value of Level 3 investments:

Category	Fair Value at 08/31/15		Valuation Technique		Unobservable Input	Input Range (Wgt Avg)
Preferred Securities
Banking	$	6,750		Bankruptcy recovery	Credit/Structure-specific recovery	0.00% - 0.50% (0.15%)

The significant unobservable inputs used in the fair value measurement technique for bankruptcy recovery are based on recovery analysis that is specific to the security being valued, including the level of subordination and structural features of the security, and the current status of any bankruptcy or liquidation proceedings. Observable market trades in bankruptcy claims are utilized by management, when available, to assess the appropriateness of valuations, although the frequency of trading depends on the specific credit and seniority of the claim. Expected recoveries in bankruptcy by security type and industry do not tend to deviate much from historical recovery rates, which are very low (sometimes zero) for preferred securities and more moderate for senior debt. Significant changes in these inputs would result in a significantly higher or lower fair value measurement.

16

Directors

Donald F. Crumrine, CFA

Chairman of the Board

David Gale

Morgan Gust

Karen H. Hogan

Robert F. Wulf, CFA

Officers

R. Eric Chadwick, CFA

Chief Executive Officer and

President

Chad C. Conwell

Chief Compliance Officer,

Vice President and Secretary

Bradford S. Stone

Chief Financial Officer,

Vice President and Treasurer

Roger Ko

Assistant Treasurer

Laurie C. Lodolo

Assistant Compliance Officer,

Assistant Treasurer and

Assistant Secretary

Linda M. Puchalski

Assistant Treasurer

Investment Adviser

Flaherty & Crumrine Incorporated e-mail: flaherty@pfdincome.com

Questions concerning your shares of Flaherty & Crumrine Preferred Income Opportunity Fund?

• If your shares are held in a Brokerage Account, contact your Broker.

• If you have physical possession of your shares in certificate form, contact the Fund’s Transfer Agent & Shareholder Servicing Agent —

BNY Mellon c/o Computershare

P.O. Box 30170

College Station, TX 77842-3170

1-866-351-7446

This report is sent to shareholders of Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated for their information. It is not a Prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in this report.

    

Quarterly

Report

August 31, 2015

www.preferredincome.com

Item 2. Controls and Procedures.

(a) The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

By (Signature and Title)*	/s/ R. Eric Chadwick
	R. Eric Chadwick, Chief Executive Officer and President
	(principal executive officer)

Date October 26, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)*	/s/ R. Eric Chadwick
	R. Eric Chadwick, Chief Executive Officer and President
	(principal executive officer)

Date October 26, 2015

By (Signature and Title)*	/s/ Bradford S. Stone
	Bradford S. Stone, Chief Financial Officer, Treasurer and Vice President
	(principal financial officer)

Date October 26, 2015

* Print the name and title of each signing officer under his or her signature.

EX-99.CERT

Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act

I, R. Eric Chadwick, certify that:

1. I have reviewed this report on Form N-Q of Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 26, 2015	/s/ R. Eric Chadwick
	R. Eric Chadwick, Chief Executive Officer and President
	(principal executive officer)

Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act

I, Bradford S. Stone, certify that:

1. I have reviewed this report on Form N-Q of Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 26, 2015	/s/ Bradford S. Stone
	Bradford S. Stone, Chief Financial Officer,
	Treasurer and Vice President
	(principal financial officer)