MERRILL LYNCH
READY ASSETS
TRUST
FUND LOGO
Annual Report
December 31, 1995
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Trust unless
accompanied or preceded by the Trust's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance, which will fluctuate. The
Trust seeks to maintain a consistent $1.00 net asset value per
share, although this cannot be assured. An investment in the Trust
is neither insured nor guaranteed by the US Government. Statements
and other information herein are as dated and are subject to change.
<PAGE>
Printed on Recycled Paper
Merrill Lynch
Ready Assets Trust
Box 9011
Princeton, NJ
08543-9011
DEAR SHAREHOLDER
For the year ended December 31, 1995, Merrill Lynch Ready Assets
Trust paid shareholders a net annualized dividend of 5.54%*. For the
six-month period ended December 31, 1995, the Trust's net annualized
yield was 5.41%*. The Trust's 7-day yield as of December 31, 1995
was 5.21%.
The average portfolio maturity for Merrill Lynch Ready Assets Trust
at December 31, 1995 was 85 days, compared to 75 days at June 30,
1995.
<PAGE>
The Environment
The direction of the US economy changed during the six months ended
December 31, 1995. There was strong evidence of a slowing economy by
mid-year, a trend that was quickly reversed as gross domestic
product growth rebounded to a 4.2% pace during the third calendar
quarter of 1995. However, recent economic releases suggest that this
rate of expansion has not been sustained, and that US economic
growth slowed as 1995 drew to a close.
A number of key measures of economic growth indicate evidence of
slowing momentum. Retail sales for November were soft, a trend that
continued throughout the all-important holiday season, reflecting
ongoing caution on the part of debt-burdened consumers. At the same
time, there has been an increase in initial unemployment claims,
along with weak job and income growth. As labor costs continue to
decelerate and commodity price pressures remain subdued,
inflationary pressures continue to be well under control.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Strong investor demand flattened the front of the yield curve, while
compressing quality spreads. Against this backdrop, we maintained a
constructive approach to the fixed-income market, emphasizing longer
dated Treasury and agency securities and six-month money market
instruments.
The Federal Reserve Board eased monetary policy slightly at the
December 19, 1995 Federal Open Market Committee meeting. However,
the Clinton Administration and Congress have yet to reach an
agreement in their current Federal budget deliberations. While the
probable direction of economic activity will continue to be the
primary focus of investors in the weeks ahead, a credible plan for
reducing the Federal budget deficit will also be an important factor
in the investment outlook.
The portfolio's composition at the end of the December period and as
of our last report is detailed below:
12/31/95 6/30/95
Bank Notes 1.5% 3.3%
Certificates of Deposit--European 5.9 1.0
Certificates of Deposit--Yankee* 1.0 5.2
Commercial Paper 45.2 44.5
Corporate Notes 7.0 2.0
Master Notes 3.1 3.1
Repurchase Agreements 5.0 3.7
US Government, Agency &
Instrumentality--Discount 9.7 17.7
US Government, Agency &
Instrumentality--Non-Discount 23.4 20.3
Other Liabilities--Net (1.8) (0.8)
------ ------
Total 100.0% 100.0%
====== ======
[FN]
*US branches of foreign banks.
<PAGE>
In Conclusion
We thank you for your support of Merrill Lynch Ready Assets Trust,
and we look forward to serving your investment needs in the months
and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(John Ng)
John Ng
Vice President and Portfolio Manager
January 29, 1996
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>
Bank Notes--1.5%
Banc One, $ 56,000 5.42% 9/18/96 $ 55,969
Columbus
Banc One, 26,000 5.45 8/28/96 25,993
Milwaukee
Society National 25,000 5.52 3/20/96 25,001
Bank of
Cleveland, Ohio
<PAGE>
Total Bank Notes
(Cost--$106,963) 106,963
Certificates of Deposit--European--5.9%
ABN-Amro Bank 50,000 5.80 1/10/96 49,999
75,000 5.73 4/23/96 75,036
Bayerische 50,000 5.81 1/18/96 49,999
Hypotheken-und
Wechsel-Bank
Chemical Bank, NY 75,000 5.81 4/04/96 75,042
Deutsche Bank AG 50,000 5.79 1/12/96 49,999
50,000 5.80 2/01/96 50,000
Dresdner Bank 70,000 5.76 2/29/96 69,982
Total Certificates of Deposit--European
(Cost--$419,992) 420,057
Certificates of Deposit--Yankee--1.0%
Svenska 21,000 5.84 1/23/96 21,000
Handelsbanken
Swiss Bank Corp., NY 50,000 5.77 1/30/96 49,994
Total Certificates of Deposit--Yankee
(Cost--$71,000) 70,994
Commercial Paper--Discount--45.2%
ABN-Amro 20,000 5.62 1/24/96 19,916
North America 100,000 5.61 4/25/96 98,204
Finance PLC
Abbey National N.A. 150,000 5.60 3/06/96 148,442
Corp. 50,000 5.44 5/30/96 48,857
Allomon 5,037 5.82 1/26/96 5,014
Funding Corp.
<PAGE>
Alpine 41,000 5.75 2/05/96 40,753
Securitization Corp.
American Express 75,000 5.62 3/01/96 74,278
Credit Corp. 25,000 5.60 4/12/96 24,600
50,000 5.60 4/26/96 49,094
15,726 5.50 5/23/96 15,383
100,000 5.42 5/31/96 97,699
Associates Corp. 50,000 5.45 6/13/96 48,759
of North America
Bear Stearns 45,000 5.65 2/29/96 44,566
Companies, 50,000 5.60 3/22/96 49,358
Inc. (The)
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>
Commercial Paper--Discount (continued)
Bellsouth $ 40,000 5.85% 1/19/96 $ 39,863
Telecommunications
Corp.
Beta Finance Inc. 19,000 5.67 2/08/96 18,877
21,000 5.66 2/27/96 20,801
25,000 5.57 4/23/96 24,559
25,000 5.61 4/23/96 24,559
11,000 5.59 4/29/96 10,796
CSW Credit, Inc. 53,500 5.70 2/09/96 53,144
CXC Inc. 25,000 5.65 2/07/96 24,842
Canadian Wheat 50,000 5.59 4/29/96 49,071
Board 50,000 5.59 4/30/96 49,064
Daimler-Benz North 20,000 5.70 1/22/96 19,923
America Corp. 50,000 5.50 3/29/96 49,305
du Pont (E.I.) de 50,000 5.57 4/29/96 49,071
Nemours & Co.
<PAGE>
Eureka Securitization 27,100 5.82 1/31/96 26,955
Inc. 30,000 5.60 3/08/96 29,679
Ford Motor Credit Co. 50,000 5.60 1/29/96 49,751
General Electric 50,000 5.67 2/09/96 49,667
Capital Corp. 25,000 5.53 3/08/96 24,733
General Motors 150,000 5.76 2/02/96 149,169
Acceptance Corp. 20,800 5.76 2/05/96 20,675
50,000 5.75 2/12/96 49,644
100,000 5.75 2/14/96 99,253
Goldman Sachs 60,000 5.55 2/28/96 59,431
Group, L.P. 100,000 5.53 3/22/96 98,717
Hanson Finance 15,000 5.70 2/02/96 14,917
(UK) PLC 53,700 5.67 2/09/96 53,343
17,000 5.70 2/09/96 16,887
Internationale 15,000 5.56 2/26/96 14,860
Nederlanden (US) 50,000 5.60 2/28/96 49,526
Funding Corp.
KFW International 15,000 5.70 1/18/96 14,952
Finance, Inc. 13,000 5.70 1/22/96 12,950
Knight-Ridder, Inc. 30,000 5.59 5/01/96 29,444
Korea Development 50,000 5.72 1/25/96 49,783
Bank
McKenna Triangle 50,000 5.71 1/22/96 49,807
National Corp. 25,000 5.65 2/08/96 24,838
25,000 5.65 2/09/96 24,834
35,000 5.65 2/14/96 34,739
Morgan Stanley 20,000 5.66 2/08/96 19,870
Group, Inc.
National Fleet 50,000 5.77 1/18/96 49,840
Funding Corp. 30,000 5.77 1/19/96 29,899
New Center 75,000 5.71 2/02/96 74,584
Asset Trust
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>
Commercial Paper--Discount (concluded)
New South Wales $ 25,000 5.54 % 3/14/96 $ 24,710
Treasury Corp.
Nomura Holding 20,000 5.80 2/01/96 19,890
America, Inc. 30,000 5.80 2/02/96 29,831
Oesterreichische 100,000 5.58 3/27/96 98,640
Kontrollbank AG
Ontario Hydro 66,000 5.61 4/09/96 64,975
Queensland Treasury 25,000 5.65 3/11/96 24,721
Corp.
Sheffield 69,000 5.72 2/01/96 68,628
Receivables Corp. 25,754 5.67 2/16/96 25,553
Southwestern 25,000 5.50 3/21/96 24,683
Bell Capital Corp.
Svenska 78,134 5.70 1/17/96 77,896
Handelsbanken, Inc.
Sweden, Kingdom of 11,000 5.62 1/16/96 10,968
50,000 5.65 1/16/96 49,855
25,000 5.62 2/15/96 24,809
45,500 5.66 2/15/96 45,153
50,000 5.61 3/01/96 49,519
50,000 5.66 3/25/96 49,335
22,605 5.61 4/04/96 22,272
19,000 5.50 5/01/96 18,648
Vattenfall 31,000 5.64 3/20/96 30,612
Treasury Inc.
WCP Funding Inc. 20,000 5.65 2/29/96 19,807
Total Commercial Paper--Discount
(Cost--$3,201,672) 3,202,050
<PAGE>
Corporate Notes--7.0%
Abbey National 60,000 7.05 3/01/96 60,128
Treasury
Services PLC
Bear Stearns 17,500 5.875 1/15/96 17,497
Companies, Inc. 25,000 6.0843 2/05/96 25,008
(The)
CIT Group 50,000 5.80 9/20/96 49,963
Holdings, Inc. 50,000 5.80 12/23/96 49,953
(The)++
First Bank 20,000 5.8775 11/20/96 19,995
Systems, Inc.
Ford Motor Credit Co. 21,835 5.15 3/15/96 21,809
20,000 5.00 3/25/96 19,970
PHH Corp.++ 50,000 5.8233 12/13/96 49,981
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>
Corporate Notes (concluded)
SMM Trust $ 57,000 5.77++ % 6/14/96 $ 57,000
Certificate (1995-K)++
SMM Trust 100,000 5.9375++ 1/08/97 100,000
Certificate (1995-Q)++
Toyota Motor 24,000 5.8473 9/13/96 23,988
Credit Corp.++
Total Corporate Notes
(Cost--$495,141) 495,292
Master Notes--3.1%
<PAGE>
Goldman Sachs 150,000 5.85 2/14/96 150,000
Group L.P. 26,000 5.82 8/09/96 26,000
Smith Barney, Inc. 41,000 5.83 3/07/96 41,000
Total Master Notes
(Cost--$217,000) 217,000
US Government, Agency & Instrumentality
Obligations--Discount--9.7%
Federal Farm 18,000 5.14 6/04/96 17,596
Credit Bank 9,500 5.14 6/07/96 9,283
14,000 5.14 6/11/96 13,672
Federal Home 17,330 5.97 1/16/96 17,282
Loan Bank 25,000 7.13 2/09/96 25,027
11,270 5.23 5/02/96 11,066
10,120 5.20 5/21/96 9,909
17,220 5.14 6/18/96 16,800
12,000 5.41 7/12/96 11,667
55,000 5.42 1/02/97 55,069
Federal Home Loan 25,000 5.53 2/27/96 24,771
Mortgage Corporation 25,200 5.25 2/14/97 25,127
15,000 6.08++ 5/13/98 15,000
Federal National 17,400 5.46 1/05/96 17,381
Mortgage Association 21,145 5.51 2/20/96 20,972
25,000 5.55 2/29/96 24,765
50,000 5.14 6/24/96 48,737
10,000 5.13 9/05/96 9,646
14,265 5.11 9/18/96 13,734
40,000 5.14 9/18/96 38,510
13,340 5.12 10/24/96 12,778
75,000 5.11 10/30/96 71,774
36,000 6.18 11/04/96 35,928
International Bank 25,000 5.52 3/12/96 24,725
for Reconstruction 24,840 5.52 3/13/96 24,563
and Development
US Treasury Bills 60,000 6.02 4/04/96 59,200
31,000 5.54 7/25/96 30,105
Total US Government, Agency & Instrumentality
Obligations--Discount (Cost--$684,329) 685,087
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>
US Government, Agency & Instrumentality
Obligations--Non-Discount--23.4%
Federal Home $ 73,000 6.21++ % 6/17/96 $ 73,000
Loan Bank 29,000 6.21++ 6/21/96 29,000
30,000 5.983++ 12/01/97 30,009
27,000 6.017++ 12/01/97 27,013
60,000 6.20++ 10/11/00 60,000
Federal Home Loan 16,000 5.83++ 5/06/96 16,000
Mortgage Corporation
Federal National 8,000 6.12++ 1/26/96 8,000
Mortgage 25,000 5.15++ 2/07/96 25,000
Association 95,000 6.08++ 5/13/96 95,000
70,000 6.08++ 5/24/96 70,000
40,000 5.81++ 7/08/96 39,982
50,000 5.37++ 8/08/96 49,982
110,000 5.4675++ 10/11/96 110,000
60,000 5.72++ 10/15/96 59,972
100,000 5.27++ 2/21/97 100,000
70,000 6.20++ 5/19/97 70,000
65,000 6.25++ 5/14/98 65,000
Student Loan 43,500 5.40++ 3/20/96 43,499
Marketing 10,000 5.27++ 4/16/96 10,003
Association 5,000 5.68++ 5/14/96 5,000
25,650 5.20++ 7/19/96 25,653
125,000 5.4675++ 9/20/96 125,000
69,000 5.97++ 10/04/96 68,979
23,000 5.425++ 11/27/96 23,036
60,000 5.41++ 1/14/97 60,000
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>
US Government, Agency & Instrumentality
Obligations--Non-Discount (concluded)
US Treasury $ 4,000 9.375% 4/15/96 $ 4,047
Notes 50,000 7.375 5/15/96 50,406
50,000 6.125 7/31/96 50,250
50,000 6.875 3/31/97 50,984
30,000 5.625 6/30/97 30,178
30,000 5.625 10/31/97 30,216
50,000 5.375 11/30/97 50,141
100,000 5.25 12/31/97 100,109
Total US Government, Agency & Instrumentality
Obligations--Non-Discount (Cost--$1,654,573) 1,655,459
Face
Amount Issue
Repurchase Agreements**--5.0%
$150,000 Fuji Securities, Inc., purchased on
12/29/1995 to yield 5.97%
to 1/02/1996 150,000
204,258 Lehman Brothers, Inc., purchased on
12/29/1995 to yield 5.95% to
1/02/1996 204,258
Total Repurchase Agreements
(Cost--$354,258) 354,258
Total Investments (Cost--$7,204,928)--101.8% 7,207,160
Liabilities in Excess of Other Assets--(1.8%) (127,805)
----------
Net Assets--100.0% $7,079,355
==========
<FN>
*Commercial Paper and certain US Government, Agency &
Instrumentality Obligations are traded on a discount basis; the
interest rates shown are the discount rates paid at the time of
purchase by the Trust. Other securities bear interest at the rates
shown, payable at fixed dates or upon maturity. Interest rates on
variable rate securities are adjusted periodically based upon
appropriate indexes; the interest rates shown are the rates in
effect at December 31, 1995.
**Repurchase Agreements are fully collateralized by US Government
Obligations.
++Variable Rate Notes.
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of December 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$7,204,928,407*) (Note 1a) $ 7,207,160,284
Receivables:
Interest $ 29,557,498
Beneficial interest sold 3,957,111 33,514,609
---------------
Prepaid registration fees and other assets (Note 1d) 170,476
---------------
Total assets 7,240,845,369
---------------
Liabilities: Payables:
Securities purchased 100,017,547
Beneficial interest redeemed 55,697,776
Distributor (Note 2) 2,127,632
Investment adviser (Note 2) 2,061,272 159,904,227
---------------
Accrued expenses and other liabilities 1,586,437
---------------
Total liabilities 161,490,664
---------------
Net Assets: Net assets $ 7,079,354,705
===============
Net Assets Shares of beneficial interest, $.10 par value, unlimited number of
Consist of: shares authorized $ 707,712,283
Paid-in capital in excess of par 6,369,410,545
Unrealized appreciation on investments--net 2,231,877
---------------
Net Assets--Equivalent to $1.00 per share based on 7,077,122,828
shares of beneficial interest outstanding $ 7,079,354,705
===============
<FN>
*Cost for Federal income tax purposes. As of December 31, 1995, net
unrealized appreciation for Federal income tax purposes amounted to
$2,231,877, of which $2,406,926 related to appreciated securities
and $175,049 related to depreciated securities.
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
December 31, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium discount earned $ 415,847,197
(Note 1c):
Expenses: Investment advisory fees (Note 2) $ 24,584,276
Transfer agent fees (Note 2) 11,927,793
Distribution fees (Note 2) 7,712,779
Accounting services (Note 2) 426,505
Registration fees (Note 1d) 294,585
Printing and shareholder reports 290,632
Custodian fees 217,580
Trustees' fees and expenses 135,687
Professional fees 104,346
Other 40,571
---------------
Total expenses 45,734,754
---------------
Investment income--net 370,112,443
---------------
Realized & Realized gain on investments--net 995,794
Unrealized Change in unrealized appreciation/depreciation on
Gain on investments--net 9,723,823
Investments ---------------
- --Net Net Increase in Net Assets Resulting from Operations $ 380,832,060
(Note 1c): ===============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended December 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 370,112,443 $ 239,470,922
Realized gain on investments--net 995,794 287,014
Change in unrealized appreciation/depreciation on
investments--net 9,723,823 (7,986,580)
--------------- ---------------
Net increase in net assets resulting from operations 380,832,060 231,771,356
--------------- ---------------
Dividends & Investment income--net (370,112,443) (239,470,922)
Distributions to Realized gain on investments--net (995,794) (287,014)
Shareholders --------------- ---------------
(Note 1e): Net decrease in net assets resulting from dividends and
distributions to shareholders (371,108,237) (239,757,936)
--------------- ---------------
Beneficial Interest Net proceeds from sale of shares 14,615,042,905 12,651,358,878
Transactions Net asset value of shares issued to shareholders in
(Note 3): reinvestment of dividends and distributions (Note 1e) 369,564,239 238,784,788
--------------- ---------------
14,984,607,144 12,890,143,666
Cost of shares redeemed (14,155,972,930) (13,164,347,398)
--------------- ---------------
Net increase (decrease) in net assets derived from beneficial
interest transactions 828,634,214 (274,203,732)
--------------- ---------------
Net Assets: Total increase (decrease) in net assets 838,358,037 (282,190,312)
Beginning of year 6,240,996,668 6,523,186,980
--------------- ---------------
End of year $ 7,079,354,705 $ 6,240,996,668
=============== ===============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended December 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income--net .0538 .0366 .0272 .0332 .0556
Realized and unrealized gain (loss)
on investments--net .0016 (.0012) .0003 .0009 .0029
---------- ---------- ---------- ---------- ----------
Total from investment operations .0554 .0354 .0275 .0341 .0585
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.0538) (.0366) (.0272) (.0332) (.0556)
Realized gain on investments--net (.0001) (.0000)++ (.0005) (.0007) (.0029)*
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.0539) (.0366) (.0277) (.0339) (.0585)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total investment return 5.54% 3.74% 2.81% 3.44% 6.02%
========== ========== ========== ========== ==========
Ratios to Expenses, excluding distribution
Average fees .55% .53% .53% .52% .50%
Net Assets: ========== ========== ========== ========== ==========
Expenses .67% .65% .65% .64% .62%
========== ========== ========== ========== ==========
Investment income and realized gain
(loss) on investments--net 5.40% 3.67% 2.78% 3.48% 5.87%*
========== ========== ========== ========== ==========
Supplemental Net assets, end of year
Data: (in thousands) $7,079,355 $6,240,997 $6,523,187 $7,465,869 $9,077,226
========== ========== ========== ========== ==========
<FN>
++Amount is less than $.0001 per share.
*Includes unrealized gain (loss).
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Ready Assets Trust (the "Trust") is registered under
the Investment Company Act of 1940 as a diversified, open-end
management investment company. The following is a summary of
significant accounting policies followed by the Trust.
(a) Valuation of investments--Investments maturing more than sixty
days after the valuation date are valued at the most recent bid
price or yield equivalent as obtained from dealers that make markets
in such securities. When such securities are valued with sixty days
or less to maturity, the difference between the valuation existing
on the sixty-first day before maturity and maturity value is
amortized on a straight-line basis to maturity. Investments maturing
within sixty days from their date of acquisition are valued at
amortized cost, which approximates market value. For purposes of
valuation, the maturity of a variable rate security is deemed to be
the next coupon date on which the interest rate is to be adjusted.
Assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the
direction of the Board of Trustees.
(b) Income taxes--It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no Federal income tax provision is
required.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
discount) is recognized on the accrual basis. Realized gains and
losses on security transactions are determined on the identified
cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends and distributions to shareholders--The Trust declares
dividends daily and reinvests daily such dividends (net of non-
resident alien tax and back-up withholding tax) in additional shares
of beneficial interest at net asset value. Dividends are declared
from net investment income and distributions from net realized gain
or loss on investments.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Trust has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The Trust has also entered into a Distribution
Agreement and a Distribution Plan with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
<PAGE>
MLAM provides the Trust with investment management, research,
statistical, and advisory services, and pays certain other expenses
of the Trust. For such services, the Trust pays a monthly fee based
upon the average daily value of the Trust's net assets at the
following annual rates:
Portion of average daily value of net assets: Rate
Not exceeding $500 million 0.500%
In excess of $500 million but not exceeding $1 billion 0.400
In excess of $1 billion but not exceeding $5 billion 0.350
In excess of $5 billion but not exceeding $10 billion 0.325
In excess of $10 billion but not exceeding $15 billion 0.300
In excess of $15 billion but not exceeding $20 billion 0.275
In excess of $20 billion 0.250
The most restrictive annual expense limitation requires that MLAM
reimburse the Trust to the extent the Trust's expenses (excluding
interest, taxes, distribution fees, brokerage fees and commissions,
and extraordinary items) exceed 2.5% of the Trust's first $30
million of average daily net assets, 2.0% of the next $70 million of
average daily net assets, and 1.5% of the average daily net assets
in excess thereof. The obligation of MLAM to reimburse the Trust
under this limitation is not limited to the amount of the management
fee.
NOTES TO FINANCIAL STATEMENTS (concluded)
The Trust has adopted a Shareholder Servicing Plan and Agreement in
accordance with Rule 12b-1 under the Investment Company Act of 1940,
pursuant to which Merrill Lynch, Pierce, Fenner and Smith Inc.
("MLPF&S"), a wholly-owned subsidiary of ML & Co., receives a fee
each month from the Trust at the annual rate of 0.125% of average
daily net assets of the accounts of Trust shareholders who maintain
their Trust accounts through MLPF&S. This fee is to compensate
MLPF&S financial consultants and other directly involved branch
office personnel for providing direct personal services to
shareholders. The fee is not compensation for administrative
services.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Trust's transfer agent.
<PAGE>
Accounting services are provided to the Trust by MLAM at cost.
Certain officers and/or trustees of the Trust are officers and/or
directors of MLAM, MLFDS, PSI, MLFD, MLPF&S, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the years ended
December 31, 1995 and December 31, 1994, corresponds to the amounts
included in the Statements of Changes in Net Assets for net proceeds
from sale of shares and cost of shares redeemed, respectively, since
shares are recorded at $1.00 per share.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
Merrill Lynch Ready Assets Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Ready Assets Trust as of December 31, 1995, the related statements
of operations for the year then ended, and changes in net assets for
each of the years in the two-year period then ended and the
financial highlights for each of the years in the five-year period
then ended. These financial statements and the financial highlights
are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at December
31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Ready Assets Trust as of December 31, 1995, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
<PAGE>
Deloitte & Touche LLP
Princeton, New Jersey
January 31, 1996
</AUDIT-REPORT>
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Donald Cecil, Trustee
M. Colyer Crum, Trustee
Edward H. Meyer, Trustee
Jack B. Sunderland, Trustee
J. Thomas Touchton, Trustee
Terry K. Glenn, Executive Vice President
Joseph T. Monagle, Jr., Executive Vice President
Donald C. Burke, Vice President
John Ng, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Bank of New York
1 Wall Street
New York, New York 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 221-7210
