MERRILL LYNCH READY ASSETS TRUST, 485BPOS, 1999-04-26

MERRILL LYNCH READY ASSETS TRUST
485BPOS, 1999-04-26

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 26, 1999

SECURITIES ACT FILE NO. 2-52711
INVESTMENT COMPANY ACT FILE NO. 811-2556
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 34 [X]
AND/OR

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 23 [X]
(CHECK APPROPRIATE BOX OR BOXES)
------------------------

MERRILL LYNCH READY ASSETS TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
------------------------
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(609) 282-2800
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
------------------------

TERRY K. GLENN

MERRILL LYNCH READY ASSETS TRUST
800 SCUDDERS MILL ROAD, PLAINSBORO, NEW JERSEY

MAILING ADDRESS:
P.O. BOX 9011, PRINCETON, NEW JERSEY 08543-9011

(NAME AND ADDRESS OF AGENT FOR SERVICE)
------------------------
COPIES TO:

<TABLE>
<S> <C>
COUNSEL FOR THE FUND: MICHAEL J. HENNEWINKEL, ESQ.
BROWN & WOOD LLP MERRILL LYNCH ASSET MANAGEMENT
ONE WORLD TRADE CENTER P.O. BOX 9011
NEW YORK, NEW YORK 10048-0557 PRINCETON, NEW JERSEY
ATTENTION: THOMAS R. SMITH, JR., ESQ. 08543-9011
</TABLE>

THOMAS D. JONES, III, ESQ.
MERRILL LYNCH ASSET MANAGEMENT
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
------------------------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)

[X] immediately upon filing pursuant to paragraph (b)

[ ] on (date) pursuant to paragraph (b)

[ ] 60 days after filing pursuant to paragraph (a)(1)

[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.

IF APPROPRIATE, CHECK THE FOLLOWING BOX:

[ ] This post-effective amendment designates a new
effective date for a
previously filed post-effective amendment.
------------------------
TITLE OF SECURITIES BEING REGISTERED: SHARES OF BENEFICIAL INTEREST, PAR VALUE
$.10 PER SHARE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

Prospectus

[MERRILL LYNCH LOGO]

Merrill Lynch Ready Assets Trust

[MERRILL LYNCH ARTWORK]

April 26, 1999

This Prospectus contains information you should know before
investing, including information about risks. Please read
it before you invest and keep it for future reference.

The Securities and Exchange Commission has not approved or
disapproved these securities or passed upon the adequacy of
this Prospectus. Any representation to the contrary is a
criminal offense.
<PAGE> 3

Table of Contents

<TABLE>
<CAPTION>
PAGE
<S> <C>
[KEY FACTS ICON]
KEY FACTS
- -----------------------------------------------------------------
The Merrill Lynch Ready Assets Trust at a Glance............ 3
Risk/Return Bar Chart....................................... 4
Fees and Expenses........................................... 5

[DETAILS ABOUT THE TRUST ICON]
DETAILS ABOUT THE TRUST
- -----------------------------------------------------------------
How the Trust Invests....................................... 6
Investment Risks............................................ 8

[YOUR ACCOUNT ICON]
YOUR ACCOUNT
- -----------------------------------------------------------------
How to Buy, Sell and Transfer Shares........................ 11
How Shares are Priced....................................... 15
Dividends and Taxes......................................... 15

[MANAGEMENT OF THE TRUST ICON]
MANAGEMENT OF THE TRUST
- -----------------------------------------------------------------
Merrill Lynch Asset Management.............................. 17
Financial Highlights........................................ 18

[FOR MORE INFORMATION ICON]
FOR MORE INFORMATION
- -----------------------------------------------------------------
Shareholder Reports....................................Back Cover
Statement of Additional Information....................Back Cover
</TABLE>

MERRILL LYNCH READY ASSETS TRUST
<PAGE> 4
Key Facts [KEY FACTS ICON]

IN AN EFFORT TO HELP YOU BETTER UNDERSTAND THE MANY CONCEPTS INVOLVED IN MAKING
AN INVESTMENT DECISION, WE HAVE DEFINED THE HIGHLIGHTED TERMS IN THIS PROSPECTUS
IN THE SIDEBAR.

U.S. GOVERNMENT SECURITIES -- debt securities issued or guaranteed as to
principal and interest by the U.S. Government that are supported by the full
faith and credit of the United States.

U.S. GOVERNMENT AGENCY SECURITIES -- debt securities issued or guaranteed as to
principal and interest by U.S. Government agencies, U.S. Government enterprises
and U.S. Government instrumentalities that are not direct obligations of the
United States.

THE MERRILL LYNCH READY ASSETS TRUST AT A GLANCE
- --------------------------------------------------------------------------------

WHAT ARE THE TRUST'S INVESTMENT OBJECTIVES?

The investment objectives of the Trust are to seek preservation of capital,
liquidity and the highest possible current income consistent with these
objectives available from investing in a diversified portfolio of short-term
money market securities.

WHAT ARE THE TRUST'S MAIN INVESTMENT STRATEGIES?

The Trust tries to achieve its goals by investing in a diversified portfolio of
short-term money market securities. These securities are generally debt
securities and other instruments that mature within 13 months (25 months if the
U.S. Government or a government agency has issued or guaranteed the debt). Other
than U.S. GOVERNMENT and certain U.S. GOVERNMENT AGENCY SECURITIES, the Trust
only invests in money market instruments of issuers with one of the two highest
short-term ratings from a nationally recognized credit rating organization or
unrated instruments which, in the opinion of Trust management, are of similar
credit quality.

Trust management decides on which securities to buy and sell based on its
assessment of the relative values of different securities and future interest
rates. Trust management seeks to improve the Trust's yield by taking advantage
of yield differentials that regularly occur between securities of a similar
kind. We cannot guarantee that the Trust will achieve its goals.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE TRUST?

An investment in the Trust is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Trust seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Trust.

WHO SHOULD INVEST?

The Trust may be an appropriate investment for you if you:

- Are looking for preservation of capital.

- Are looking for current income and liquidity.

- Are investing with short term goals, such as for cash reserves.

MERRILL LYNCH READY ASSETS TRUST 3
<PAGE> 5
[KEY FACTS ICON] Key Facts

YIELD -- the income generated by an investment in the Trust.

RISK/RETURN BAR CHART
- --------------------------------------------------------------------------------

The bar chart and table shown below provide an indication of the risks of
investing in the Trust. The bar chart shows changes in the Trust's performance
for the past ten calendar years. The table shows the average annual total
returns of the Trust for the periods shown. How the Trust performed in the past
is not necessarily an indication of how the Trust will perform in the future.

[BAR CHART]

During the ten year period shown in the bar chart, the highest return for a
quarter was 2.35% (quarter ended June 30, 1989) and the lowest return for a
quarter was 0.66% (quarter ended December 31, 1993). The Trust's year-to-date
return as of March 31, 1999 was 1.05%.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(AS OF THE
CALENDAR YEAR ENDED PAST PAST PAST
DECEMBER 31, 1998) ONE YEAR FIVE YEARS TEN YEARS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Merrill Lynch
Ready Assets Trust 5.11% 4.91% 5.38%
- -------------------------------------------------------------------------------
</TABLE>

YIELD INFORMATION

The YIELD on Trust shares normally will go up and down on a daily basis.
Therefore, yields for any given past periods are not an indication or
representation of future yields. The Trust's yield is affected by changes in
interest rates, average portfolio maturity and operating expenses. Current yield
information may not provide the basis for a comparison with bank deposits or
other investments, which pay a fixed yield over a stated period of time. To
obtain the Trust's current 7-day yield, call 1-800-221-7210.

4 MERRILL LYNCH READY ASSETS TRUST
<PAGE> 6
UNDERSTANDING EXPENSES

Trust investors pay various fees and expenses, either directly or indirectly.
Listed below are some of the main types of expenses, which all mutual funds may
charge:

EXPENSES PAID INDIRECTLY BY THE SHAREHOLDER.

ANNUAL FUND OPERATING EXPENSES -- expenses that cover the costs of operating the
Trust.

MANAGEMENT FEE -- a fee paid to the Manager for managing the Trust.

DISTRIBUTION FEES -- fees used to support the Trust's marketing and distribution
efforts, such as compensating Financial Consultants, advertising and promotion.

FEES AND EXPENSES
- --------------------------------------------------------------------------------
This table shows the different fees and expenses that you may pay if you buy and
hold shares of the Trust. Future expenses may be greater or less than those
indicated below.

<TABLE>
<CAPTION>
ANNUAL TRUST OPERATING EXPENSES (EXPENSES
THAT ARE DEDUCTED FROM TRUST ASSETS)
- ----------------------------------------------------------------------
<S> <C>
MANAGEMENT FEE 0.36%
- ----------------------------------------------------------------------
DISTRIBUTION (12b-1) FEES(a) 0.13%
- ----------------------------------------------------------------------
Other Expenses (including transfer agency fees)(b) 0.16%
- ----------------------------------------------------------------------
Total Annual Trust Operating Expenses 0.65%
- ----------------------------------------------------------------------
</TABLE>

(a) The Trust is authorized to pay Merrill Lynch distribution fees of 0.125%
each year under a distribution plan that the Fund has adopted under rule
12b-1. For the fiscal year ended December 31, 1998, $8,410,874 was paid to
Merrill Lynch pursuant to the distribution plan.

(b) The Trust pays the Transfer Agent $15.00 for each shareholder account and
reimburses the Transfer Agent's out-of-pocket expenses. For the fiscal year
ended December 31, 1998, the Fund paid the Transfer Agent fees totaling
$10,787,605. The Manager provides accounting services to the Trust at its
cost. For the fiscal year ended December 31, 1998, the Trust reimbursed the
Manager $390,549 for these services.

EXAMPLE:

This example is intended to help you compare the cost of investing in the Trust
with the cost of investing in other money market funds.

This example assumes that you invest $10,000 in the Trust for the time periods
indicated, that your investment has a 5% return each year and that the Trust's
operating expenses remain the same. This assumption is not meant to indicate you
will receive a 5% annual rate of return. Your annual return may be more or less
than the 5% used in this example. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------
<S> <C> <C> <C>
$66 $208 $362 $810
- -----------------------------------------
</TABLE>

MERRILL LYNCH READY ASSETS TRUST 5
<PAGE> 7

Details About the Trust [DETAILS ABOUT THE TRUST ICON]

MATURITY -- the time at which the full principal amount of a fixed income
security is scheduled to be repaid.

U.S. GOVERNMENT AGENCIES -- entities that are part of or sponsored by the
federal government, such as the Government National Mortgage Administration, the
Tennessee Valley Authority or the Federal Housing Administration.

HOW THE TRUST INVESTS
- --------------------------------------------------------------------------------

The Trust's goals are to seek current income, preservation of capital and
liquidity available from investing in a diversified portfolio of short term
money market securities. These instruments are generally debt securities that
MATURE or reset to a new interest rate within 13 months (25 months if the U.S.
Government or a Government agency has issued or guaranteed the debt). Other than
U.S. Government and Government agency securities, the Trust only invests in
money market instruments of issuers with one of the two highest short term
ratings from a nationally recognized credit rating organization or unrated
instruments which, in the opinion of the Trust's management, are of similar
credit quality.

These securities principally consist of short term U.S. Government and U.S.
Government agency securities, bank money instruments, corporate debt
instruments, including commercial paper and variable amount master demand notes
and repurchase and reverse repurchase agreements.

In seeking to achieve the Trust's objectives, Trust management varies the kinds
of money market securities in the portfolio and the average maturity of the
portfolio. Trust management makes decisions on which securities to buy and sell
based on its assessment of the relative values of different securities and
future interest rates. Trust management also seeks to improve the Trust's yield
by taking advantage of yield differentials that regularly occur between
securities of a similar kind. For example, market conditions frequently result
in similar securities trading at different prices. Trust management seeks to
improve the Trust's yield by buying and selling securities based on these yield
differences.

The money market securities in which the Trust may invest include:

U.S. GOVERNMENT SECURITIES -- Debt securities issued or guaranteed as to
principal and interest by the U.S. Government that are supported by the full
faith and credit of the United States.

U.S. GOVERNMENT AGENCY SECURITIES -- Debt securities issued or guaranteed as to
principal and interest by U.S. GOVERNMENT AGENCIES, U.S. GOVERNMENT-SPONSORED
ENTERPRISES, U.S. GOVERNMENT INSTRUMENTALITIES and certain international
institutions that are not direct obligations of the United States but involve
U.S. Government sponsorship or guarantees by U.S. government agencies or
enterprises. The U.S. Government may not be obligated to provide financial
support to these instrumentalities.

6 MERRILL LYNCH READY ASSETS TRUST
<PAGE> 8

U.S. GOVERNMENT-SPONSORED ENTERPRISES -- private corporations sponsored by the
federal government which have the legal status of government agencies, such as
the Federal Home Loan Mortgage Corporation, the Student Loan Marketing
Association or the Federal National Mortgage Association.

U.S. GOVERNMENT INSTRUMENTALITIES -- supranational entities sponsored by the
U.S. and other governments, such as the World Bank or the Inter-American
Development Bank.

ABOUT THE PORTFOLIO MANAGER

Donaldo S. Benito is a Vice President and the portfolio manager of the Trust.
Mr. Benito has been a Vice President of Merrill Lynch Asset Management since
1985.

ABOUT THE MANAGER

The Trust is managed by Merrill Lynch Asset Management.

BANK MONEY INSTRUMENTS -- Obligations of commercial banks or other depository
institutions, such as (but not limited to) certificates of deposit, time
deposits, bank notes and bankers' acceptances. The Trust will not invest more
than 25% of its total assets (taken at market value at the time of each
investment) in obligations of foreign depository institutions and their foreign
branches and subsidiaries or in obligations of foreign branches or subsidiaries
of U.S. depository institutions that are not backed by the U.S. parent. The
Trust treats bank money instruments issued by U.S. branches or subsidiaries of
foreign banks as obligations issued by domestic banks (and not subject to the
25% limitation) if the branch or subsidiary is subject to the same bank
regulation as U.S. banks.

COMMERCIAL PAPER -- Obligations, usually of nine months or less, issued by
corporations and other businesses for short term funding.

OTHER SHORT-TERM OBLIGATIONS -- Obligations issued by trusts, corporations,
partnerships or other entities, including mortgage or asset backed instruments.

FOREIGN SHORT-TERM DEBT INSTRUMENTS -- U.S. dollar-denominated commercial paper
and other short term obligations issued by foreign entities.

FLOATING RATE OBLIGATIONS -- Obligations of government agencies, corporations,
depository institutions or other issuers which periodically or automatically
reset their interest rate to reflect a current market rate, such as the federal
funds rate or a bank's prime rate, or the level of an interest rate index, such
as LIBOR (a well-known short term interest rate index).

INSURANCE COMPANY OBLIGATIONS -- Short term funding agreements and guaranteed
insurance contracts with fixed or floating interest rates.

MASTER NOTES -- Variable principal amount demand instruments issued by corporate
issuers.

OTHER ELIGIBLE INVESTMENTS -- Other money market instruments permitted by
Securities and Exchange Commission rules governing money market funds.

REPURCHASE AGREEMENTS -- In a repurchase agreement the Trust buys a security
from another party, which agrees to buy it back at an agreed upon time and
price. The Trust may invest in repurchase agreements involving the money market
securities described above.

REVERSE REPURCHASE AGREEMENTS -- In a reverse repurchase agreement the Trust
sells a security to another party and agrees to buy it back at a specific

MERRILL LYNCH READY ASSETS TRUST 7
<PAGE> 9
[DETAILS ABOUT THE TRUST ICON] Details About the Trust

EURODOLLAR -- obligations issued by foreign branches or subsidiaries of U.S.
banks.

YANKEEDOLLAR -- obligations issued by U.S. branches or subsidiaries of foreign
banks.

time and price. The Trust may invest in reverse repurchase agreements involving
the money market securities described above.

FORWARD COMMITMENTS -- The Trust may buy or sell money market securities on a
forward commitment basis. In these transactions, the Trust buys the securities
at an established price with payment and delivery taking place in the future.
The value of the security on the delivery date may be more or less than its
purchase price.

SECURITIES LENDING -- The Trust may lend portfolio securities to brokers,
dealers and financial institutions. The Trust may not lend securities with a
value in excess of 20% of its total assets.

The Trust may invest in obligations of foreign issuers, including both
EURODOLLAR and YANKEEDOLLAR obligations.

INVESTMENT RISKS
- --------------------------------------------------------------------------------

This section contains a summary discussion of the general risks of investing in
the Trust. As with any mutual fund, there can be no guarantee that the Trust
will meet its goals or that the Trust's performance will be positive for any
period of time.

CREDIT RISK -- Credit risk is the risk that the issuer of a security owned by
the Trust will be unable to pay the interest or principal when due. The degree
of credit risk depends on both the financial condition of the issuer and the
terms of the obligation. While the Trust invests only in money-market securities
of highly rated issuers, those issuers may still default on their obligations.

SELECTION RISK -- Selection risk is the risk that the securities that Trust
management selects will underperform other funds with similar investment
objectives and investment strategies.

INTEREST RATE RISK -- Interest rate risk is the risk that prices of money market
securities generally increase when interest rates decline and decrease when
interest rates increase.

SHARE REDUCTION RISK -- In order to maintain a constant net asset value of $1.00
per share, the Trust may reduce the number of shares held by its shareholders.

8 MERRILL LYNCH READY ASSETS TRUST
<PAGE> 10

BORROWING RISK -- The Fund may borrow only to meet redemptions. Borrowing may
exaggerate changes in the net asset value of Fund shares and in the yield on the
Fund's portfolio. Borrowing will cost the Fund interest expense and other fees.
The cost of borrowing money may reduce the Fund's return.

REPURCHASE AGREEMENT RISK -- If the party with whom the Trust has entered into a
repurchase agreement defaults on its obligation under the agreement, the Trust
may suffer delays and incur costs or even lose money in exercising its rights
under the agreement.

REVERSE REPURCHASE AGREEMENT RISK -- The Trust may lose money if the other party
defaults and the Trust has to buy the securities elsewhere at more than the
agreed-upon price. In addition, in a declining market, the Trust may be unable
to sell securities that are the subject of a reverse repurchase agreement until
it repurchases them, which may result in the Trust receiving a lower sale price
than it otherwise would have.

SECURITIES LENDING RISK -- The Trust may lend securities to financial
institutions which provide government securities as collateral. Securities
lending involves the risk that the borrower may fail to return the securities in
a timely manner or at all. As a result, the Trust may lose money and there may
be a delay in recovering the loaned securities. The Trust could also lose money
if it does not recover the securities and the value of the collateral falls.
These events could trigger adverse tax consequences to the Trust.

FOREIGN MARKET RISK -- The Trust may invest in U.S. dollar denominated money
market instruments and other short-term debt obligations issued by foreign banks
and other foreign entities. Although the Trust will invest in these securities
only if Trust management determines they are of comparable quality to the
Trust's U.S. investments, investing in securities of foreign issuers involves
some additional risks. These risks include the higher costs of foreign
investing, and the possibility of adverse political, economic or other
developments.

EUROPEAN ECONOMIC AND MONETARY UNION ("EMU") -- A number of European countries
have entered into EMU in an effort to reduce trade barriers between themselves
and eliminate fluctuations in their currencies. EMU has established a single
European currency (the euro), which was introduced on January 1, 1999 and is
expected to replace the existing national currencies of all initial EMU
participants by July 1, 2002. Certain securities (beginning with government and
corporate bonds) were

MERRILL LYNCH READY ASSETS TRUST 9
<PAGE> 11
[DETAILS ABOUT THE TRUST ICON] Details About the Trust

redenominated in the euro. These securities trade and make dividend and other
payments only in euros. Like other investment companies and business
organizations, including the companies in which the Fund invests, the Fund could
be adversely affected if the transition to the euro, or EMU as a whole, does not
proceed as planned.

STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

If you would like further information about the Fund, including how it invests,
please see the Statement of Additional Information.

10 MERRILL LYNCH READY ASSETS TRUST
<PAGE> 12
Your Account [YOUR ACCOUNT ICON]

HOW TO BUY, SELL AND TRANSFER SHARES
- --------------------------------------------------------------------------------

The chart below summarizes how to buy, sell and transfer shares through Merrill
Lynch or other securities dealers. You may also buy shares through the Transfer
Agent. To learn more about buying shares through the Transfer Agent, call
1-800-221-7210. Because the selection of a mutual fund involves many
considerations, your Merrill Lynch Financial Consultant may help you with this
decision.

The Trust reserves the right to redeem shares of your account if you do not
maintain a total investment value of at least $1,000. You will be notified if
your account is less than $1,000 and will be allowed two months to make
additions before the redemption is processed.

MERRILL LYNCH READY ASSETS TRUST 11
<PAGE> 13
[YOUR ACCOUNT ICON] Your Account

<TABLE>
<CAPTION>
IF YOU WANT TO YOUR CHOICES INFORMATION IMPORTANT FOR YOU TO KNOW
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Buy Shares Determine the amount of your The minimum initial investment for the Trust is $5,000 for
investment all accounts except:
- $300 for accounts advised by banks and registered
investment advisers
- $100 for retirement plans
(The minimums for initial investments may be waived under
certain circumstances.)
-------------------------------------------------------------------------------------------------------
Have your Merrill Lynch Financial Share purchase orders are effective on the date Federal
Consultant or securities dealer Funds become available to the Fund. Generally, purchase
submit your purchase order orders placed through Merrill Lynch will be effective on the
day following the day the order is placed.
Investors who wish same-day effectiveness should purchase by
wire as described below.
-------------------------------------------------------------------------------------------------------
Purchase by Wire You may purchase shares of the Trust by wiring Federal Funds
to First Union National Bank of Florida. You should give
your financial institution the following wire instructions:
ABA#063000021, DDA#2112600061186, Financial Data Services,
Inc. The wire should be identified as a payment to Merrill
Lynch Ready Assets Trust and should include the
shareholder's name and account number.
-------------------------------------------------------------------------------------------------------
Or contact the Transfer Agent To purchase shares directly, call the Transfer Agent at
1-800-MER-FUND and request a purchase application. Mail the
completed purchase application to the Transfer Agent at the
address on the inside back cover of this prospectus.
- --------------------------------------------------------------------------------------------------------------------------------
Add to Your Purchase additional shares The minimum investment for additional purchases is $1,000
Investment for all accounts except:
- $100 for accounts advised by banks and registered
investment advisers
- $1 for retirement plans
(The minimums for additional purchases may be waived under
certain circumstances.)
-------------------------------------------------------------------------------------------------------
Acquire additional shares through the All dividends are automatically reinvested without a sales
automatic dividend reinvestment plan charge. If you want to receive your dividends in cash you
may enroll in the Accrued Monthly Payout Plan.
-------------------------------------------------------------------------------------------------------
Participate in the automatic You may invest a specific amount ($50 minimum) on a periodic
investment plan basis through certain Merrill Lynch investment or central
asset accounts.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

12 MERRILL LYNCH READY ASSETS TRUST
<PAGE> 14

<TABLE>
<CAPTION>
IF YOU WANT TO YOUR CHOICES INFORMATION IMPORTANT FOR YOU TO KNOW
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Transfer Shares to Transfer to a participating You may transfer your Trust shares only to another
Another Securities securities dealer securities dealer that has entered into an agreement with
Dealer Merrill Lynch. All shareholder services will be available
for the transferred shares. You may only purchase additional
shares of funds previously owned before the transfer. All
future trading of these assets must be coordinated by the
receiving firm.
-------------------------------------------------------------------------------------------------------
Transfer to a non-participating You must either:
securities dealer - Transfer your shares to an account with the Transfer
Agent; or
- Sell your shares.
- --------------------------------------------------------------------------------------------------------------------------------
Sell Your Shares Have your Merrill Lynch Financial To ensure that your redemption request will be priced at the
Consultant or securities dealer net asset value on the day of your request, you must submit
submit your sales order your request to your dealer prior to the determination of
net asset value of the Trust (generally 4:00 p.m. Eastern
time). Any redemption request received from a dealer after
that time will be priced at the net asset value at the close
of business on the next business day.
Securities dealers, including Merrill Lynch, may charge a
fee to process a redemption of shares.
The Trust may reject an order to sell shares under certain
circumstances.
-------------------------------------------------------------------------------------------------------
Sell through the Transfer Agent You may sell shares held at the Transfer Agent by writing to
the Transfer Agent at the address on the inside back cover
of this prospectus. All shareholders on the account must
sign the letter and signatures must be guaranteed. The
Transfer Agent will normally mail redemption proceeds within
seven days following receipt of a properly completed
request. If you make a redemption request before the Trust
has collected payment for the purchase of shares, the Trust
or the Transfer Agent may delay mailing your proceeds. This
delay will usually not exceed ten days.
Check with the Transfer Agent or your Merrill Lynch
Financial Consultant for details.
-------------------------------------------------------------------------------------------------------
Redemption by check You may redeem shares by check in an amount not less than
$500. You may request checks from the Transfer Agent. These
checks can be made payable to any person, except that they
may not be used to buy securities in transactions with
Merrill Lynch. The person to whom the check is made payable
may cash or deposit it like any check, drawn on any bank.
You will continue to earn daily dividends until the check
clears. You will be subject to the rules and regulations
governing such checking accounts including the right of the
Transfer Agent not to honor checks exceeding the value of
your account. The Fund or the Transfer Agent may modify or
terminate the redemption by check privilege on 30 days'
notice.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

MERRILL LYNCH READY ASSETS TRUST 13
<PAGE> 15
[YOUR ACCOUNT ICON] Your Account

14 MERRILL LYNCH READY ASSETS TRUST
<PAGE> 16
[YOUR ACCOUNT ICON] Your Account

NET ASSET VALUE -- the market value of the Trust's total assets after deducting
liabilities, divided by the number of shares outstanding.

DIVIDENDS -- ordinary income and capital gains paid to shareholders. Dividends
may be reinvested in additional Fund shares as they are paid.

HOW SHARES ARE PRICED
- --------------------------------------------------------------------------------

When you buy shares, you pay the NET ASSET VALUE (normally $1.00 per share)
without a sales charge. The "penny-rounding" method is used in calculating net
asset value, meaning that the calculation is rounded to the nearest whole cent.
This is the offering price. Shares are also redeemed at their net asset value.
The Trust calculates its net asset value each business day as of the close of
business on the New York Stock Exchange (generally, 4:00 p.m. Eastern time) or,
on days when the New York Stock Exchange is closed but New York banks are open,
at 4:00 p.m., Eastern time. The net asset value used in determining your price
is the one calculated after your purchase or redemption order becomes effective.
Share purchase orders are effective on the date Federal Funds become available
to the Trust.

DIVIDENDS AND TAXES
- --------------------------------------------------------------------------------

DIVIDENDS are declared and reinvested daily in the form of additional shares at
net asset value. You will begin accruing dividends on the day following the date
your purchase becomes effective. Shareholders will receive statements monthly as
to such reinvestments. Shareholders redeeming their holdings will receive all
dividends declared and reinvested through the date of redemption. The Trust
intends to make distributions most of which will be taxed as ordinary income
although the Trust may distribute capital gains as well.

You will pay tax on ordinary income dividends and any capital gain dividends
from the Trust whether you receive them in cash or additional shares. If you
redeem Trust shares, any gain on the transaction may be subject to tax. Capital
gain dividends are generally taxed at different rates than ordinary income
dividends.

If the value of assets held by the Trust declines, the Trustees may authorize a
reduction in the number of outstanding shares in shareholders' accounts so as to
preserve a net asset value of $1.00 per share. After such a reduction, the basis
of your eliminated shares would be added to the basis of your remaining Trust
shares, and you could recognize a capital loss if you disposed of your shares at
that time. Dividends from the Trust, including dividends reinvested in
additional shares of the Trust, will nonetheless be

MERRILL LYNCH READY ASSETS TRUST 15
<PAGE> 17
[YOUR ACCOUNT ICON] Your Account

"BUYING A DIVIDEND"

Unless your investment is in a tax deferred account, you may want to avoid
buying shares shortly before the Fund pays a dividend. The reason? If you buy
shares when a fund has realized but not yet distributed income or capital gains,
you will pay the full price for the shares and then receive a portion of the
price back in the form of a taxable dividend. Before investing you may want to
consult your tax adviser.

fully taxable, even if the number of shares in your account has been reduced as
described above.

If you are neither a lawful permanent resident nor a citizen of the U.S. or if
you are a foreign entity, the Trust's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies.

By law, the Trust must withhold 31% of your dividends and proceeds if you have
not provided a taxpayer identification number or social security number.

This section summarizes some of the consequences under current Federal tax law
of an investment in the Trust. It is not a substitute for personal tax advice.
Consult your personal tax adviser about the potential tax consequences of an
investment in the Trust under all applicable tax laws.

16 MERRILL LYNCH READY ASSETS TRUST
<PAGE> 18

Management of the Trust [MANAGEMENT OF THE TRUST ICON]

MERRILL LYNCH ASSET MANAGEMENT
- --------------------------------------------------------------------------------

Merrill Lynch Asset Management, the Trust's Manager, manages the Trust's
investments and its business operations under the overall supervision of the
Trust's Board of Trustees. The Manager has the responsibility for making all
investment decisions for the Trust. The Trust pays the Manager a fee at the
annual rate of 0.500% of the Trust's average daily net assets not exceeding $500
million; 0.400% of the average daily net assets exceeding $500 million but not
exceeding $1 billion; 0.350% of the average daily net assets exceeding $1
billion but not exceeding $5 billion; 0.325% of the average daily net assets
exceeding $5 billion but not exceeding $10 billion; 0.300% of the average daily
net assets exceeding $10 billion but not exceeding $15 billion; 0.275% of the
average daily net assets exceeding $15 billion but not exceeding $20 billion;
and 0.250% of the average daily net assets exceeding $20 billion.

Merrill Lynch Asset Management is part of Merrill Lynch Asset Management Group,
which had approximately $515 billion in investment company and other portfolio
assets under management as of March 1999. This amount includes assets managed
for Merrill Lynch affiliates.

A NOTE ABOUT YEAR 2000

Many computer systems were designed using only two digits to designate years.
These systems may not be able to distinguish the Year 2000 from the Year 1900
(commonly known as the "Year 2000 Problem"). The Trust could be adversely
affected if the computer systems used by the Trust's management or other Trust
service providers do not properly address this problem before January 1, 2000.
The Trust's management expects to have addressed this problem before then, and
does not anticipate that the services it provides will be adversely affected.
The Trust's other service providers have told the Trust management that they
also expect to resolve the Year 2000 Problem, and the Trust management will
continue to monitor the situation as the Year 2000 approaches. However, if the
problem has not been fully addressed, the Trust could be negatively affected.
The Year 2000 Problem could also have a negative impact on the issuers in which
the Trust invests, and this could hurt the Trust's investment returns.

MERRILL LYNCH READY ASSETS TRUST 17
<PAGE> 19

FINANCIAL HIGHLIGHTS

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

The Financial Highlights table is intended to help you understand the Trust's
financial performance for the past five years. Certain information reflects
financial results for a single Trust share. The total returns in the table
represent the rate an investor would have earned on an investment in the Trust
(assuming reinvestment of all dividends). This information has been audited by
Deloitte & Touche LLP, whose report, along with the Trust's financial
statements, are included in the Trust's annual report to shareholders, which is
available upon request.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
-----------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1998 1997
<S> <C> <C>
- -----------------------------------------------------------------------------
Per Share Operating Performance:
- -----------------------------------------------------------------------------
Net asset value, beginning of year $ 1.00 $ 1.00
- -----------------------------------------------------------------------------
Investment income -- net .0497 .0503
- -----------------------------------------------------------------------------
Realized and unrealized gain (loss) on
investments -- net .0003 .0001
- -----------------------------------------------------------------------------
Total from investment operations .0500 .0504
- -----------------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net (.0497) (.0503)
Realized gain on investments -- net (.0002) --+
- -----------------------------------------------------------------------------
Total dividends and distributions (.0499) (.0503)
- -----------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00
- -----------------------------------------------------------------------------
Total Investment Return 5.11% 5.16%
- -----------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- -----------------------------------------------------------------------------
Expenses .65% .65%
- -----------------------------------------------------------------------------
Investment income and realized gain on
investments -- net 5.01% 5.03%
- -----------------------------------------------------------------------------
Supplemental Data:
- -----------------------------------------------------------------------------
Net assets, end of year (in thousands) $7,173,713 $6,946,667
- -----------------------------------------------------------------------------

<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
------------------------------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1996 1995 1994
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Per Share Operating Performance:
- -----------------------------------------------------------------------------------------
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------
Investment income -- net .0491 .0538 .0366
- -----------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on
investments -- net (.0003) .0016 (.0012)
- -----------------------------------------------------------------------------------------
Total from investment operations .0488 .0554 .0354
- -----------------------------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net (.0491) (.0538) (.0366)
Realized gain on investments -- net (.0001) (.0001) --+
- -----------------------------------------------------------------------------------------
Total dividends and distributions (.0492) (.0539) (.0366)
- -----------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------
Total Investment Return 5.05% 5.53% 3.73%
- -----------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- -----------------------------------------------------------------------------------------
Expenses .64% .67% .65%
- -----------------------------------------------------------------------------------------
Investment income and realized gain on
investments -- net 4.88% 5.40% 3.67%
- -----------------------------------------------------------------------------------------
Supplemental Data:
- -----------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $7,096,260 $7,079,355 $6,240,997
- -----------------------------------------------------------------------------------------
</TABLE>

+ Amount is less than $.0001 per share.

18 MERRILL LYNCH READY ASSETS TRUST
<PAGE> 20
[INVESTOR CHART]

<TABLE>
<S> <C>
POTENTIAL
INVESTORS

Open an account (two options).
1 2

MERRILL LYNCH TRANSFER AGENT
FINANCIAL CONSULTANT
OR SECURITIES DEALER FINANCIAL DATA SERVICES, INC.
P.O. Box 45289
Advises shareholders on their Trust investments. Jacksonville, Florida 32232-5290
1-800-221-7210
Performs recordkeeping and reporting services.

DISTRIBUTOR

MERRILL LYNCH FUNDS DISTRIBUTOR,
A DIVISION OF PRINCETON FUNDS DISTRIBUTOR, INC.
P.O. Box 9081
Princeton, New Jersey 08543-9081

Arranges for the sale of Trust shares.

COUNSEL THE TRUST CUSTODIAN

BROWN & WOOD LLP The Board of Trustees THE BANK OF NEW YORK
One World Trade Center oversees the Trust. 90 Washington Street
New York, New York 10048-0557 12th Floor
New York, New York 10286

Provides legal advice to the Trust. Holds the Trust's assets for safekeeping.

INDEPENDENT AUDITORS INVESTMENT ADVISER

DELOITTE & TOUCHE LLP MERRILL LYNCH ASSET MANAGEMENT, L.P.
117 Campus Drive
Princeton, New Jersey 08540-6400 ADMINISTRATIVE OFFICES
800 Scudders Mill Road
Audits the financial Plainsboro, New Jersey 08536
statements of the Trust on behalf of
the shareholders. MAILING ADDRESS
P.O. Box 9011
Princeton, New Jersey 08543-9011

TELEPHONE NUMBER
1-800-221-7210

Manages the Trust's day-to-day activities.

</TABLE>
MERRILL LYNCH READY ASSETS TRUST

<PAGE> 21

For More Information [FOR MORE INFORMATION ICON]

SHAREHOLDER REPORTS

Additional information about the Trust's investments is available in the Trust's
annual and semi-annual reports to shareholders. You may obtain these reports at
no cost by calling 1-800-MER-FUND.

The Trust will send you one copy of each shareholder report and certain other
mailings, regardless of the number of Trust accounts you have. To receive
separate shareholder reports for each account, call your Merrill Lynch Financial
Consultant or write to the Transfer Agent at its mailing address. Include your
name, address, tax identification number and Merrill Lynch brokerage or mutual
fund account number. If you have any questions, please call your Merrill Lynch
Financial Consultant or the Transfer Agent at 1-800-221-7210.

STATEMENT OF ADDITIONAL INFORMATION

The Trust's Statement of Additional Information contains further information
about the Trust and is incorporated by reference (legally considered to be part
of this prospectus). You may request a free copy by writing the Trust at
Financial Data Services, Inc., P.O. Box 45289, Jacksonville, Florida 32232-5289
or by calling 1-800-MER-FUND.

Contact your Merrill Lynch Financial Consultant or the Trust, at the telephone
number or address indicated above, if you have any questions.

Information about the Trust (including the Statement of Additional Information)
can be reviewed and copied at the SEC's Public Reference Room in Washington,
D.C. Call 1-800-SEC-0330 for information on the operation of the Public
Reference Room. This information is also available on the SEC's Internet site at
http://www.sec.gov and copies may be obtained upon payment of a duplicating fee
by writing the Public Reference Section of the SEC, Washington, D.C. 20549-6009.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. NO ONE IS
AUTHORIZED TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM INFORMATION
CONTAINED IN THIS PROSPECTUS.

Investment Company Act file #811-2556

Code #10053-0499

Prospectus

[MERRILL LYNCH LOGO]

Merrill Lynch
Ready Assets Trust

[MERRILL LYNCH ARTWORK]

April 26, 1999

<PAGE> 22

STATEMENT OF ADDITIONAL INFORMATION

MERRILL LYNCH READY ASSETS TRUST

P.O. Box 9011, Princeton, New Jersey 08543-9011 - Phone No. (609) 282-2800

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

Merrill Lynch Ready Assets Trust (the "Trust") is a no-load money market
fund, organized as a Massachusetts business trust that seeks current income,
preservation of capital and liquidity available from investing in a diversified
portfolio of short-term money market securities. Portfolio securities
principally consist of short-term U.S. Government securities, U.S. Government
agency securities, bank money instruments, corporate debt instruments, including
commercial paper and variable amount master demand notes, and repurchase and
reverse repurchase agreements. The Trust shares common goals with those
investors who seek to put reserve assets to work in an income producing and
prudent manner and to make those assets readily available without penalty. There
can be no assurance that the investment objectives of the Trust will be
realized. The Trust pays Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") a distribution fee for providing certain services in
connection with the distribution of Trust shares. See "Purchase of Shares."

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

This Statement of Additional Information of the Trust is not a prospectus
and should be read in conjunction with the Prospectus of the Trust, dated April
26, 1999 (the "Prospectus"), which has been filed with the Securities and
Exchange Commission (the "Commission") and can be obtained, without charge, by
calling (800) 637-3863 or by writing the Trust at the above address. The
Prospectus is incorporated by reference into this Statement of Additional
Information, and this Statement of Additional Information is incorporated by
reference into the Prospectus. The Trust's audited financial statements are
incorporated in this Statement of Additional Information by reference to its
1998 annual report to shareholders. You may request a copy of the annual report
at no charge by calling (800) 456-4587 ext. 789 between 8:00 a.m. and 8:00 p.m.
on any business day.

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

MERRILL LYNCH ASSET MANAGEMENT -- MANAGER
MERRILL LYNCH FUNDS DISTRIBUTOR -- DISTRIBUTOR

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

The date of this Statement of Additional Information is April 26, 1999.

<PAGE> 23

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objectives and Policies.......................... 2
Management of the Trust..................................... 7
Trustees and Officers..................................... 7
Compensation of Trustees.................................. 8
Management and Advisory Arrangements...................... 9
Code of Ethics............................................ 11
Purchase of Shares.......................................... 11
Methods of Payment........................................ 12
Distribution Plan......................................... 13
Redemption of Shares........................................ 13
Methods of Redemption..................................... 14
Determination of Net Asset Value............................ 16
Yield Information........................................... 17
Portfolio Transactions...................................... 17
Shareholder Services........................................ 18
Investment Account........................................ 18
Fee-Based Programs........................................ 19
Automatic Investment Plan................................. 19
Accrued Monthly Payout Plan............................... 19
Systematic Withdrawal Plan................................ 19
Retirement Plans.......................................... 20
Dividends and Taxes......................................... 20
Dividends................................................. 20
Taxes..................................................... 20
General Information......................................... 22
Description of Shares..................................... 22
Independent Auditors...................................... 22
Custodian................................................. 23
Transfer Agent............................................ 23
Legal Counsel............................................. 23
Reports to Shareholders................................... 23
Shareholder Inquiries..................................... 23
Additional Information.................................... 23
Financial Statements........................................ 23
</TABLE>
<PAGE> 24

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives of the Trust are to seek current income,
preservation of capital and liquidity available from investing in a diversified
portfolio of short-term money market securities. The investment objectives are
fundamental policies of the Trust that may not be changed without a vote of the
majority of the outstanding shares of the Trust.

The Trust's investments in short-term "Government Securities" (as defined
in Commission regulations) will be in instruments with a remaining maturity of
762 days (25 months) or less. The Trust's other investments will be in
instruments with a remaining maturity of 397 days (13 months) or less that have
received a short-term rating, or that have been issued by issuers that have
received a short-term rating with respect to a class of debt obligations that
are comparable in priority and security with the instruments, from the requisite
nationally recognized statistical rating organizations ("NRSROs") in one of the
two highest short-term rating categories or, if neither the instrument nor its
issuer is so rated, will be of comparable quality as determined by the Trustees
of the Trust (or by Merrill Lynch Asset Management, L.P. (the "Manager" or
"MLAM") pursuant to delegated authority). Currently, there are five NRSROs: Duff
& Phelps Inc., Fitch, IBCA Inc., Thomson Bankwatch, Moody's Investors Service,
Inc. and Standard & Poor's. The Trust will determine the remaining maturity of
its investments in accordance with Commission regulations. The dollar-weighted
average maturity of the Trust's portfolio will not exceed 90 days. During the
Trust's fiscal year ended December 31, 1998, the average maturity of its
portfolio ranged from 64 days to 85 days.

Investment in Trust shares offers several potential benefits. The Trust
seeks to provide as high a yield potential as is available through investment in
short-term money market securities utilizing professional money market
management, block purchases of securities and yield improvement techniques. It
provides high liquidity because of its redemption features and seeks the reduced
risk that generally results from diversification of assets. There can be no
assurance that the investment objectives of the Trust will be realized. Certain
expenses are borne by investors, including advisory and management fees,
administrative costs and operational costs.

In managing the Trust, the Manager will employ a number of professional
money management techniques, including varying the composition of investments
and the average maturity of the portfolio based on its assessment of the
relative values of the various securities and future interest rate patterns.
These assessments will respond to changing economic and money market conditions
and to shifts in fiscal and monetary policy. The Manager also will seek to
improve yield by taking advantage of yield disparities that regularly occur in
the money market. For example, market conditions frequently result in similar
securities trading at different prices. Also, there frequently are differences
in yields between the various types of money market securities. The Trust seeks
to enhance yield by purchasing and selling securities based on these yield
disparities.

The following is a description of some of the types of money market
securities in which the Trust may invest:

U.S. Government Securities. Marketable securities issued by or guaranteed
as to principal and interest by the U.S. Government and supported by the full
faith and credit of the United States.

U.S. Government Agency Securities. Debt securities issued by U.S.
Government-sponsored enterprises, Federal agencies and certain international
institutions that are not direct obligations of the United States but involve
U.S. Government sponsorship or guarantees by U.S. Government agencies or
enterprises. The U.S. Government is not obligated to provide financial support
to these instrumentalities.

Bank Money Instruments. The Trust may invest in U.S. dollar-denominated
obligations of U.S. and foreign depository institutions, including commercial
and savings banks, savings and loan associations, and other institutions. Such
obligations include but are not limited to certificates of deposit, bankers'
acceptances, time deposits, bank notes and deposit notes. For example, the
obligations may be issued by U.S. or foreign depository institutions, foreign
branches or subsidiaries of U.S. depository institutions ("Eurodollar"
obligations), U.S. branches or subsidiaries of foreign depository institutions
("Yankeedollar" obligations) or foreign branches or subsidiaries of foreign
depository institutions. Eurodollar and Yankeedollar obligations and
2
<PAGE> 25

obligations of branches or subsidiaries of foreign depository institutions may
be general obligations of the parent bank or may be limited to the issuing
branch or subsidiary by the terms of the specific obligations or by government
regulation. Investments in obligations of foreign depository institutions and
their foreign branches and subsidiaries will only be made if determined to be of
comparable quality to other investments permissible for the Trust. The Trust
will not invest more than 25% of its total assets (taken at market value at the
time of each investment) in obligations of foreign depository institutions and
their foreign branches and subsidiaries or in obligations of foreign branches or
subsidiaries of U.S. depository institutions that are not backed by the U.S.
parent. The Trust treats bank money instruments issued by U.S. branches or
subsidiaries of foreign banks as obligations issued by domestic banks (not
subject to the 25% limitation) if the branch or subsidiary is subject to the
same bank regulation as U.S. banks.

Obligations of foreign depository institutions, their branches and
subsidiaries, and Eurodollar and Yankeedollar obligations may involve investment
risks additional to the risks of obligations of U.S. institutions. Such
investment risks include adverse political and economic developments, the
possible imposition of withholding taxes on interest income payable on such
obligations, the possible seizure or nationalization of foreign deposits and the
possible establishment of exchange controls or other foreign governmental laws
or restrictions that might adversely affect the payment of principal and the
payment of interest. Generally, the issuers of such obligations are subject to
fewer regulatory requirements than are applicable to U.S. banks. Foreign
depository institutions, their branches or subsidiaries, and foreign branches or
subsidiaries of U.S. banks may be subject to less stringent reserve requirements
than U.S. banks. U.S. branches or subsidiaries of foreign banks are subject to
the reserve requirements of the state in which they are located. There may be
less publicly available information about a foreign bank or a branch or
subsidiary of a foreign bank than about a U.S. institution, and such branches or
subsidiaries may not be subject to the same accounting, auditing and financial
record keeping standards and requirements as U.S. banks. Evidence of ownership
of foreign depository and Eurodollar obligations may be held outside of the
United States and the Trust may be subject to the risks associated with the
holding of such property overseas. Foreign depository and Eurodollar obligations
of the Trust held overseas will be held by foreign branches of the Custodian for
the Trust's portfolio securities or by other U.S. or foreign banks under
subcustodian arrangements complying with the requirements of the Investment
Company Act of 1940, as amended (the "Investment Company Act"). The Trust's
manager, Merrill Lynch Asset Management, L.P. (the "Manager" or "MLAM"), will
consider the above factors in making investments in foreign depository,
Eurodollar and Yankeedollar obligations and will not knowingly purchase
obligations which, at the time of purchase, are subject to exchange controls or
withholding taxes. Generally, the Trust will limit its foreign depository and
Yankeedollar investments to obligations of banks organized in Canada, France,
Germany, Japan, the Netherlands, Switzerland, the United Kingdom and other
industrialized nations. As discussed in the Prospectus, the Trust may also
invest in U.S. dollar-denominated commercial paper and other short-term
obligations issued by foreign entities. Such investments are subject to quality
standards similar to those applicable to investments in comparable obligations
of domestic issuers. Investments in foreign entities generally involve the same
risks as those described above in connection with investments in Eurodollar and
Yankeedollar obligations and obligations of foreign depository institutions and
their foreign branches and subsidiaries.

Bank money instruments in which the Trust invests must be issued by
depository institutions with total assets of at least $1 billion, except that up
to 10% of the Trust's total assets (taken at market value) may be invested in
certificates of deposit of smaller institutions if such certificates of deposit
are Federally insured.

Commercial Paper and Other Short-term Obligations. Commercial paper
(including variable amount master demand notes and funding agreements), which
refers to short-term, unsecured promissory notes issued by corporations,
partnerships, trusts, and other entities to finance short-term credit needs, and
non-convertible debt securities (e.g., bonds and debentures) with no more than
397 days (13 months) remaining to maturity at the date of purchase. Short-term
obligations issued by trusts, corporations, partnerships or other entities
include, but are not limited to, mortgage- or asset-backed instruments, such as
pass-through certificates representing participations in, or bonds and notes
backed by, pools of mortgages; automobile, manufactured housing or other types
of consumer loans; credit card or trade receivables; or pools of mortgage- or
asset-backed securities.

3
<PAGE> 26

Foreign Short-term Debt Instruments. The Trust may also invest in U.S.
dollar-denominated commercial paper and other short-term obligations issued by
foreign entities. Such investments are subject to quality standards similar to
those applicable to investments in comparable obligations of domestic issuers.
Investments in foreign entities in general involve the same risks as those
described above in connection with investments in Eurodollar and Yankeedollar
obligations and obligations of foreign depository institutions and their foreign
branches and subsidiaries.

The following is a description of other types of investments or investment
practices in which the Trust may invest or engage:

Repurchase Agreements; Purchase and Sale Contracts. The Trust may invest
in repurchase agreements or purchase and sale contracts involving the money
market securities described above. Under such agreements, the counterparty
agrees, on entering into the contract, to repurchase the security at a mutually
agreed-upon time and price, thereby determining the yield during the term of the
agreement. This results in a fixed rate of return insulated from market
fluctuations during such period. Such agreements usually cover short periods,
such as under one week. Repurchase agreements may be construed to be
collateralized loans by the purchaser to the seller secured by the securities
transferred to the purchaser. In the case of a repurchase agreement, the Trust
will require the seller to provide additional collateral if the market value of
the securities falls below the repurchase price at any time during the term of
the repurchase agreement; the Trust does not have the right to seek additional
collateral in the case of purchase and sale contracts. In the event of default
by the seller under a repurchase agreement construed to be a collateralized
loan, the underlying securities are not owned by the Trust but only constitute
collateral for the seller's obligation to pay the repurchase price. Therefore,
the Trust may suffer time delays and incur costs or possible losses in
connection with the disposition of the collateral. A purchase and sale contract
differs from a repurchase agreement in that the contract arrangements stipulate
that the securities are owned by the Trust. In the event of a default under such
a repurchase agreement or under a purchase and sale contract, instead of the
contractual fixed rate of return, the rate of return to the Trust shall be
dependent on intervening fluctuations of the market value of such security and
the accrued interest on the security. In such event, the Trust would have rights
against the seller for breach of contract with respect to any losses arising
from market fluctuations following the failure of the seller to perform.

Reverse Repurchase Agreements. The Trust may enter into reverse repurchase
agreements which involve the sale of money market securities held by the Trust,
with an agreement to repurchase the securities at an agreed-upon price, date and
interest payment. During the time a reverse repurchase agreement is outstanding,
the Trust will maintain a segregated custodial account containing U.S.
Government or other appropriate high-grade debt securities having a value equal
to the repurchase price.

Lending of Portfolio Securities. The Trust may lend securities with a
value not exceeding 20% of its total assets. In return, the Trust receives
collateral in an amount equal to at least 100% of the current market value of
the loaned securities in cash or securities issued or guaranteed by the U.S.
Government. [This limitation is a fundamental policy and it may not be changed
without the approval of the holders of a majority of the Trust's outstanding
voting securities, as defined in the Investment Company Act of 1940.] The Trust
receives securities as collateral for the loaned securities and the Trust and
the borrower negotiate a rate for the loan premium to be received by the Trust
for the loaned securities, which increases the Trust's yield. The Trust may
receive a flat fee for its loans. The loans are terminable at any time and the
borrower, after notice, is required to return borrowed securities within five
business days. The Trust may pay reasonable finder's, administrative and
custodial fees in connection with its loans. In the event that the borrower
defaults on its obligation to return borrowed securities because of insolvency
or for any other reason, the Trust could experience delays and costs in gaining
access to the collateral and could suffer a loss to the extent the value of the
collateral falls below the market value of the borrowed securities.

Forward Commitments. The Trust may purchase or sell money market
securities on a forward commitment basis at fixed purchase terms. The purchase
or sale will be recorded on the date the Trust enters into the commitment, and
the value of the security will thereafter be reflected in the calculation of the
Trust's net asset value. The value of the security on the delivery date may be
more or less than its purchase price. A

4
<PAGE> 27

separate account of the Trust will be established with its custodian consisting
of cash or liquid money market securities having a market value at all times at
least equal to the amount of the forward purchase commitment. Although the Trust
generally will enter into forward commitments with the intention of acquiring
securities for its portfolio, the Trust may dispose of a commitment prior to
settlement if the Manager deems it appropriate to do so.

There can be no assurance that a security purchased or sold through a
forward commitment will be delivered. The value of securities in these
transactions on the delivery date may be more or less than the Trust's purchase
price. The Trust may bear the risk of a decline in the value of the security in
these transactions and may not benefit from an appreciation in the value of the
security during the commitment period.
------------------------

Preservation of capital is a prime investment objective of the Trust, and
while the types of money market securities in which the Trust invests generally
are considered to have low principal risk, such securities are not completely
risk free. There is a risk of the failure of issuers to meet their principal and
interest obligations. With respect to repurchase agreements, purchase and sale
contracts, reverse repurchase agreements and the lending of portfolio securities
by the Trust, there is also the risk of the failure of the parties involved to
repurchase at the agreed-upon price or to return the securities involved in such
transactions, in which event the Trust may suffer time delays and incur costs or
possible losses in connection with such transactions.

A Commission regulation ordinarily limits investments by the Trust in
securities issued by any one issuer (other than the U.S. Government, its
agencies or instrumentalities) to not more than 5% of its total assets, or in
the event that such securities do not have the highest rating, not more than 1%
of its total assets. In addition, such regulation requires that not more than 5%
of the Trust's total assets be invested in securities that do not have the
highest rating.

Investment Restrictions. The Trust has adopted a number of restrictions
and policies relating to the investment of its assets and its activities, which
are fundamental policies and may not be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities as defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act").
Among the more significant restrictions, the Trust may not:

(1) purchase any securities other than (i) money market securities
and (ii) other securities described under "Investment Objectives and
Policies";

(2) invest more than 25% of its total assets (taken at market value
at the time of each investment) in the securities of issuers in any
particular industry (other than U.S. Government securities, U.S. Government
agency securities or bank money instruments);

(3) (i) invest more than 5% of its total assets (taken at market
value at the time of each investment) in the securities (other than U.S.
Government or U.S. Government agency securities) of any one issuer
(including repurchase agreements and purchase and sale contracts with any
one bank) except that up to 25% of the value of the Trust's total assets
may be invested without regard to such 5% limitation but shall instead be
subject to a 10% limitation, or (ii) purchase more than 10% of the
outstanding securities of an issuer except that this restriction shall not
apply to U.S. Government or U.S. Government agency securities, bank money
instruments, repurchase agreements and purchase and sale contracts;

(4) enter into repurchase agreements or purchase and sale contracts
if, as a result, more than 10% of the Trust's net assets (taken at market
value at the time of each investment) would be subject to repurchase
agreements or purchase and sale contracts maturing in more than seven days;
and

(5) borrow amounts in excess of 20% of its total assets, taken at
market value, and then only from banks as a temporary measure for
extraordinary or emergency purposes (usually only "leveraged" investment
companies may borrow in excess of 5% of their assets; however, the Trust
will not borrow to increase income but only to meet redemption requests
which might otherwise require untimely

5
<PAGE> 28

dispositions of portfolio securities; interest paid on such borrowings will
reduce net income). The Trust will not purchase securities while borrowings
described in investment restriction (5) are outstanding except to honor
prior commitments.

In addition, the Trust has adopted the following restrictions and policies
relating to the investment of its assets and its activities, which are
fundamental policies and may not be changed without the approval of the holders
of a majority of the Fund's outstanding voting securities (which for this
purpose means the lesser of (i) 67% of the shares represented at a meeting at
which more than 50% of the outstanding shares are represented or (ii) more than
50% of the outstanding shares). The Fund may not:

(1) make investments for the purpose of exercising control or
management;

(2) purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;

(3) purchase or sell real estate (other than money market securities
secured by real estate or interests therein or money market securities
issued by companies which invest in real estate, or interests therein),
commodities or commodity contracts, interests in oil, gas or other mineral
exploration or development programs;

(4) purchase any securities on margin, except for use of short-term
credit necessary for clearance of purchases and sales of portfolio
securities;

(5) make short sales of securities or maintain a short position or
write, purchase or sell puts, calls, straddles, spreads or combinations
thereof;

(6) make loans to other persons, provided that the Trust may purchase
money market securities or enter into repurchase agreements or purchase and
sale contracts and lend securities owned or held by it pursuant to (7)
below;

(7) lend its portfolio securities in excess of 20% of its total
assets, taken at market value, provided that such loans are made according
to the guidelines of the Securities and Exchange Commission and the Trust's
Board of Trustees, including maintaining collateral from the borrower equal
at all times to the current market value of the securities loaned;

(8) borrow amounts in excess of 20% of its total assets, taken at
market value, and then only from banks as a temporary measure for
extraordinary or emergency purposes (the borrowing provisions shall not
apply to reverse repurchase agreements with respect to which see (12)
below) (usually only "leveraged" investment companies may borrow in excess
of 5% of their assets; however, the Trust will not borrow to increase
income but only to meet redemption requests which might otherwise require
untimely dispositions of portfolio securities; interest paid on such
borrowings will reduce net income);

(9) mortgage, pledge, hypothecate or in any manner transfer (except
as provided in (7) above), as security for indebtedness any securities
owned or held by the Trust except as may be necessary in connection with
borrowings mentioned in (8) above, and then such mortgaging, pledging or
hypothecating may not exceed 25% of the Trust's total assets, taken at
market value (although the Trust has the authority to mortgage, pledge or
hypothecate up to 25% of total assets under this investment restriction
(9), as a matter of operating policy, it will not mortgage, pledge or
hypothecate in excess of 10% of net assets in order to comply with the
requirements of certain state securities commissions);

(10) invest in securities (except for repurchase agreements, purchase
and sale contracts or variable amount master demand notes) with legal or
contractual restrictions on resale or for which no readily available market
exists or in securities of issuers (other than issuers of U.S. Government
agency securities) having a record, together with predecessors, of less
than three years of continuous operation if, regarding all such securities,
more than 5% of its total assets, taken at market value, would be invested
in such securities;

(11) act as an underwriter of securities issued by other persons;

6
<PAGE> 29

(12) enter into reverse repurchase agreements if, as a result
thereof, the Trust's obligations with respect to reverse repurchase
agreements would exceed one-third of the Trust's net assets (defined to be
total assets, taken at market value, less liabilities other than reverse
repurchase agreements); and

(13) issue senior securities to the extent such issuance would
violate applicable law.

The Trust will not purchase securities while borrowings described in
investment restriction (8) are outstanding except to honor prior commitments.

Subject to the supervision of the Board of Trustees, the Manager is
responsible for the actual management of the Trust's portfolio and constantly
reviews the Trust's holdings in light of its own research analysis and that from
other relevant sources. The responsibility for making decisions to buy, sell or
hold a particular security rests with the Manager. The Manager performs certain
of the other administrative services and provides all of the office space,
facilities, equipment and necessary personnel for portfolio management of the
Fund.

MANAGEMENT OF THE TRUST

TRUSTEES AND OFFICERS

The Board of Trustees of the Trust consists of seven individuals, six of
whom are not "interested persons" of the Trust as defined in the Investment
Company Act (the "non-interested Trustees"). The Trustees are responsible for
the overall supervision of the operations of the Trust and perform the various
duties imposed on the directors of investment companies by the Investment
Company Act.

Information about the Trustees, executive officers and the portfolio
manager of the Trust, including their ages and their principal occupations for
at least the last five years, is set forth below. Unless otherwise noted, the
address of each Trustee, executive officer and the portfolio manager is P.O. Box
9011, Princeton, New Jersey 08543-9011.

TERRY K. GLENN (58) -- President and Trustee (1)(2) -- Executive Vice
President of the Manager and Fund Asset Management, L.P. ("FAM")(which terms as
used herein include their corporate predecessors) since 1983; Executive Vice
President and Director of Princeton Services, Inc. ("Princeton Services") since
1993; President of Princeton Funds Distributor, Inc. ("PFD") since 1986 and
Director thereof since 1991; President of Princeton Administrators, L.P. since
1988.

DONALD CECIL (72) -- Trustee (2)(3) -- 1114 Avenue of the Americas, New
York, New York 10036. Special Limited Partner of Cumberland Associates (an
investment partnership) since 1982; Member of Institute of Chartered Financial
Analysts; Member and Chairman of Westchester County (N.Y.) Board of
Transportation.

M. COLYER CRUM (66) -- Trustee (2)(3) -- 104 Westcliff Road, Weston,
Massachusetts 02193. Currently James R. Williston Professor of Investment
Management Emeritus, Harvard Business School; James R. Williston Professor of
Investment Management, Harvard Business School, from 1971 to 1996; Director of
Cambridge Bancorp, Copley Properties, Inc. and Sun Life Assurance Company of
Canada.

EDWARD H. MEYER (72) -- Trustee (2)(3) -- 777 Third Avenue, New York, New
York 10017. President of Grey Advertising, Inc., since 1968, Chief Executive
Officer since 1970 and Chairman of the Board of Directors since 1972; Director
of The May Department Stores Company, Bowne & Co., Inc. (financial printers),
Harman International Industries, Inc. (stereo and audio equipment manufacturers)
and Ethan Allen Interiors, Inc.

JACK B. SUNDERLAND (70) -- Trustee (2)(3) -- P.O. Box 7, West Cornwall,
Connecticut 06796. President and Director of American Independent Oil Company,
Inc. (an energy company) since 1987; Member of Council on Foreign Relations
since 1971.

J. THOMAS TOUCHTON (60) -- Trustee (2)(3) -- Suite 3405, One Tampa City
Center, 201 North Franklin Street, Tampa, Florida 33062. Managing Partner of The
Witt Touchton Company and its
7
<PAGE> 30

predecessor, The Witt Co. (a private investment partnership), since 1972;
Trustee Emeritus of Washington and Lee University; Director of TECO Energy, Inc.
(an electric utility holding company).

FRED G. WEISS (57) -- Trustee (2)(3) -- 16410 Maddalena Place, Del Ray
Beach, Florida 33446. Managing Director of FGW Associates since 1997; Vice
President, Planning Investment, and Development of Warner Lambert Co. from 1979
to 1997.

ARTHUR ZEIKEL (66) -- Trustee (1)(2) -- Chairman of the Manager and FAM
from 1997 to 1999 and President thereof from 1977 to 1997; Chairman of Princeton
Services from 1997 to 1999, Director thereof from 1993 to 1999 and President
thereof from 1993 to 1997; Executive Vice President of Merrill Lynch & Co., Inc.
("ML & Co.") from 1990 to 1999.

KEVIN J. MCKENNA (41) -- Senior Vice President (1)(2) -- First Vice
President of the Manager since 1997; Vice President of the Manager from 1985 to
1997.

JOSEPH T. MONAGLE, JR. (50) -- Senior Vice President (1)(2) -- Senior Vice
President of the Manager and FAM since 1990; Department Head of the Global Fixed
Income Division of the Manager and FAM since 1997; Senior Vice President of
Princeton Services since 1993.

DONALDO S. BENITO (53) -- Vice President and Portfolio Manager
(1)(2) -- Vice President of the Manager since 1985.

DONALD C. BURKE (38) -- Vice President and Treasurer (1)(2) -- Senior Vice
President and Treasurer of the Manager and FAM since 1999; Senior Vice President
and Treasurer of Princeton Services since 1999; Vice President of PFD since
1999; First Vice President of the Manager from 1997 to 1999; Vice President of
the Manager from 1990 to 1997; Director of Taxation of the Manager since 1990.

THOMAS D. JONES, III (33) -- Secretary (1)(2) -- Vice President of the
Manager since 1998; Attorney with the Manager and FAM since 1992.

- ---------------
(1) Interested person, as defined in the Investment Company Act, of the Trust.
(2) Such Trustee or officer is a director, trustee or officer of certain other
investment companies for which MLAM or FAM acts as the investment adviser or
manager.
(3) Members of the Fund's Audit Committee, which is responsible for the
selection of the independent auditors and the selection of non-interested
Trustees.

As of the date of April 1, 1999, the Trustees and officers of the Trust as
a group (13 persons) owned an aggregate of less than 1% of the outstanding
shares of the Trust. At such date, Mr. Zeikel, a Trustee of the Trust, Mr.
Glenn, a Trustee and officer of the Trust, and the other officers of the Trust
owned an aggregate of less than 1% of the outstanding shares of Common Stock of
ML & Co.

COMPENSATION OF TRUSTEES

The Fund pays each non-interested Trustee a fee of $14,000 per year plus
$2,000 per meeting attended. The Fund also compensates members of its Audit and
Nominating Committee (the "Committee"), which consists of all the non-interested
Trustees, a fee of $5,000 per year. The Fund pays the Chairman of the Committee
an additional fee of $2,500 per year. The Fund reimburses each non-interested
Trustee for his out-of-pocket expenses relating to attendance at Board and
Committee meetings.

The following table shows the compensation earned by the non-interested
Trustees for the fiscal year ended December 31, 1998 and also the aggregate
compensation paid to them from all registered investment

8
<PAGE> 31

companies advised by the Manager and its affiliate, FAM ("MLAM/FAM-advised
funds"), for the calendar year ended December 31, 1998.

<TABLE>
<CAPTION>
AGGREGATE
PENSION OR ESTIMATED COMPENSATION FROM
POSITION RETIREMENT BENEFITS ANNUAL FUND AND OTHER
WITH COMPENSATION ACCRUED AS PART OF BENEFITS UPON MLAM/FAM-
NAME TRUST FROM TRUST TRUST EXPENSE RETIREMENT ADVISED FUNDS(1)
---- --------- ------------ ------------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Donald Cecil................ Trustee $29,500 None None $277,808
M. Colyer Crum.............. Trustee $27,000 None None $116,600
Edward H. Meyer............. Trustee $27,000 None None $214,558
Jack B. Sunderland.......... Trustee $27,000 None None $133,600
J. Thomas Touchton.......... Trustee $27,000 None None $133,600
Fred G. Weiss............... Trustee $25,417 None None $140,842
</TABLE>

- ---------------
(1) The Trustees serve on the boards of MLAM/FAM-advised funds as follows: Mr.
Cecil (34 registered investment companies consisting of 34 portfolios); Mr.
Crum (15 registered investment companies consisting of 15 portfolios); Mr.
Meyer (34 registered investment companies consisting of 34 portfolios); Mr.
Sunderland (18 registered investment companies consisting of 30 portfolios);
Mr. Touchton (18 registered investment companies consisting of 30
portfolios); and Mr. Weiss (15 registered investment companies consisting of
15 portfolios).

Trustees of the Trust, members of the Boards of other MLAM-advised
investment companies, ML & Co. and its subsidiaries (the term "subsidiaries,"
when used herein with respect to ML & Co., includes MLAM, FAM and certain other
entities directly or indirectly wholly owned and controlled by ML & Co.) and
their trustees/directors and employees, and any trust, pension, profit-sharing
or other benefit plan for such persons, may purchase shares of the Trust at net
asset value. The Trust realizes economies of scale and reduction of
sales-related expenses by virtue of the familiarity of these persons with the
Trust. Employees and directors or trustees wishing to purchase shares of the
Trust must satisfy the Trust's suitability standards.

MANAGEMENT AND ADVISORY ARRANGEMENTS

Management Services. The Manager provides the Trust with investment
advisory and management services. Subject to the supervision of the Board of
Trustees, the Manager is responsible for the actual management of the Trust's
portfolio and constantly reviews the Trust's holdings in light of its own
research analysis and that from other relevant sources. The responsibility for
making decisions to buy, sell or hold a particular security rests with the
Manager. The Manager performs certain of the other administrative services and
provides all the office space, facilities, equipment and necessary personnel for
management of the Trust.

Securities held by the Trust also may be held by, or be appropriate
investments for, other funds or clients (collectively referred to as "clients")
for which the Manager or FAM acts as an adviser or by investment advisory
clients of the Manager. Because of different objectives or other factors, a
particular security may be bought for one or more clients when one or more
clients are selling the same security. If purchases or sales of securities for
the Trust or other advisory clients arise for consideration at or about the same
time, transactions in such securities will be made, insofar as feasible, for the
respective funds and clients in a manner deemed equitable to all. To the extent
that transactions on behalf of more than one client of the Manager or its
subsidiary during the same period may increase the demand for securities being
purchased or the supply of securities being sold, there may be an adverse effect
on price.

Management Fee. The Trust has entered into a management agreement with the
Manager (the "Management Agreement"), pursuant to which the Manager receives for
its services to the Trust monthly compensation at the following annual rates:

9
<PAGE> 32

Portion of average daily value of net assets:

<TABLE>
<CAPTION>
RATE
----
<S> <C>
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%
</TABLE>

The table below sets forth information about the total management fees
payable by the Trust to the Manager for the periods indicated.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31, MANAGEMENT FEE
------------------------------ -----------------
<S> <C>
1998....................................................... $25,784,290
1997....................................................... $25,839,319
1996....................................................... $26,214,794
</TABLE>

Payment of Fund Expenses. The Management Agreement obligates the Manager
to provide management services and to pay all compensation of and furnish office
space for officers and employees of the Trust connected with investment and
economic research, trading and investment management of the Trust, as well as
the fees of all Trustees of the Trust who are affiliated persons of ML & Co. or
any of its affiliates. The Trust pays all other expenses incurred in the
operation of the Trust, including among other things: taxes, expenses for legal
and auditing services, costs of printing proxies, stock certificates,
shareholder reports, prospectuses and statements of additional information,
except to the extent paid by Merrill Lynch Funds Distributor, a division of PFD
(the "Distributor"); charges of the custodian and the transfer agent; expenses
of redemption of shares; Commission fees; expenses of registering the shares
under Federal and state securities laws; fees and expenses of unaffiliated
Trustees; accounting and pricing costs (including the daily calculations of net
asset value); insurance; interest; brokerage costs; litigation and other
extraordinary or non-recurring expenses; and other expenses properly payable by
the Trust. Accounting services are provided for the Trust by the Manager and the
Trust reimburses the Manager for its costs in connection with such services. See
"Purchase of Shares -- Distribution Plans."

Organization of the Manager. The Manager is a limited partnership, the
partners of which are ML & Co., a financial services holding company and the
parent of Merrill Lynch, and Princeton Services. ML & Co. and Princeton Services
are "controlling persons" of the Manager as defined under the Investment Company
Act because of their ownership of its voting securities or their power to
exercise a controlling influence over its management or policies.

Duration and Termination. Unless earlier terminated as described herein,
the Management Agreement will continue in effect from year to year if approved
annually (a) by the Board of Trustees of the Trust or by a majority of the
outstanding shares of the Trust and (b) by a majority of the Trustees who are
not parties to such contract or interested persons (as defined in the Investment
Company Act) of any such party. Such contracts are not assignable and may be
terminated without penalty on 60 days' written notice at the option of either
party or by vote of the shareholders of the Trust.

Transfer Agency Services. Financial Data Services, Inc. (the "Transfer
Agent"), a subsidiary of ML & Co., acts as the Trust's Transfer Agent pursuant
to a Transfer Agency, Dividend Disbursing Agency and Shareholder Servicing
Agency Agreement (the "Transfer Agency Agreement"). Pursuant to the Transfer
Agency Agreement, the Transfer Agent is responsible for the issuance, transfer
and redemption of shares and the opening and maintenance of shareholder
accounts. Pursuant to the Transfer Agency Agreement, the Transfer Agent receives
a fee of $15.00 per shareholder account and is entitled to reimbursement for
out-of-pocket expenses incurred by the Transfer Agent under the Transfer Agency
Agreement. Additionally, a $.20 monthly closed account charge will be assessed
on all accounts which close during the calendar year.

10
<PAGE> 33

Application of this fee will commence the month following the month the account
is closed. At the end of the calendar year, no further fees will be due. For
purposes of the Transfer Agency Agreement, the term "account" includes a
shareholder account maintained directly by the Transfer Agent and any other
account representing the beneficial interest of a person in the relevant share
class on a recordkeeping system, provided the recordkeeping system is maintained
by a subsidiary of ML & Co.

CODE OF ETHICS

The Board of Trustees of the Trust has adopted a Code of Ethics under Rule
17j-1 under the Investment Company Act which incorporates the Code of Ethics of
the Manager (together, the "Codes"). The Codes significantly restrict the
personal investing activities of all employees of the Manager and, as described
below, impose additional, more onerous, restrictions on fund investment
personnel.

The Codes require that all employees of the Manager pre-clear any personal
securities investment (with limited exceptions, such as government securities).
The pre-clearance requirement and associated procedures are designed to identify
any substantive prohibition or limitation applicable to the proposed investment.
The substantive restrictions applicable to all employees of the Manager include
a ban on acquiring any securities in a "hot" initial public offering and a
prohibition from profiting on short-term trading in securities. In addition, no
employee may purchase or sell any security that at the time is being purchased
or sold (as the case may be), or to the knowledge of the employee is being
considered for purchase or sale, by any fund advised by the Manager.
Furthermore, the Codes provide for trading "blackout periods" which prohibit
trading by investment personnel of the Trust within periods of trading by the
Trust in the same (or equivalent) security (15 or 30 days depending upon the
transaction).

PURCHASE OF SHARES

Reference is made to "How to Buy, Sell and Transfer Shares" in the
Prospectus.

The Trust is offering its shares without a sales charge at a public price
equal to the net asset value (normally $1.00 per share) next determined after a
purchase order becomes effective. Share purchase orders are effective on the
date Federal Funds become available to the Trust. If Federal Funds are available
to the Trust prior to the determination of net asset value (generally 4:00 p.m.,
Eastern time) on any business day, the order will be effective on that day.
Shares purchased will begin accruing dividends on the day following the date of
purchase. Any order may be rejected by the Trust or the Distributor.

The minimum initial purchase is $5,000 and the minimum subsequent purchase
is $1,000, except that lower minimums apply in the case of purchases made under
certain retirement plans. The Trust may, at its discretion, establish reduced
minimum initial and subsequent purchase requirements with respect to various
types of accounts. For pension, profit sharing, individual retirement and
certain other retirement plans, including self-directed retirement plans for
which Merrill Lynch acts as passive custodian and the various retirement plans
available from the Distributor, the minimum initial purchase is $100 and the
minimum subsequent investment is $1. The minimum initial or subsequent purchase
requirements may be waived for certain employer-sponsored retirement or savings
plans, such as tax-qualified retirement plans within the meaning of Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), deferred
compensation plans within the meaning of Section 403(b) and Section 457 of the
Code, other deferred compensation arrangements, Voluntary Employee Benefits
Association ("VEBA") plans, and non-qualified After Tax Savings and Investment
programs, maintained on the Merrill Lynch Group Employee Services system. For
accounts advised by banks and registered investment advisers, the minimum
initial purchase is $300 and the minimum subsequent purchase is $100. The
minimum initial purchase under the Merrill Lynch Blueprint(SM) Program
("Blueprint") is $500 (or $50 if the shareholder elects to participate in the
automatic investment of sale proceeds option on Blueprint application form) and
the minimum subsequent purchase is $50. Any order may be rejected by the
Distributor or the Trust.

The Distributor acts as the distributor in the continuous offering of the
Trust's shares. Shares may be purchased directly from the Distributor or from
other securities dealers, including Merrill Lynch, with whom

11
<PAGE> 34

the Distributor has entered into a selected dealer agreement. Securities dealers
may charge investors a fee in connection with such transactions. Merrill Lynch
has informed the Trust that it does not charge such a fee.

The Trust's distribution agreement with the Distributor is renewable
annually, and may be terminated on 60 days' written notice by either party.
Under such agreement, after the prospectuses, statements of additional
information and periodic reports have been prepared and set in type, the
Distributor will pay for the printing and distribution of copies thereof used in
connection with the offering to dealers and investors. The Distributor also will
pay for other supplementary sales literature.

It is the Trust's policy to be as fully invested as reasonably practicable
at all times to maximize the yield on the Trust's portfolio. The money markets
in which the Trust will purchase and sell portfolio securities normally require
immediate settlement of transactions in Federal Funds. Federal Funds are a
commercial bank's deposits in a Federal Reserve Bank and can be transferred from
one member bank's account to that of another member bank on the same day and
thus are considered to be immediately available funds. Orders for the purchase
of Trust shares shall become effective on the day Federal Funds become available
to the Trust and the shares being purchased will be issued at the net asset
value per share next determined. If Federal Funds are available to the Trust
prior to the determination of net asset value (generally 4:00 p.m., New York
time) on any business day, the order will be effective on that day. Shares
purchased will begin accruing dividends on the day following the date of
purchase.

METHODS OF PAYMENT

Payment Through Securities Dealers. Investment in the Trust may be made
through securities dealers, including Merrill Lynch, who have entered into
selected dealer agreements with the Distributor. In such a case, the dealer will
transmit payment to the Trust on behalf of the investor and will supply the
Trust with the required account information. Generally, purchase orders placed
through Merrill Lynch will be made effective on the day following the day the
order is placed with Merrill Lynch, except that orders received through
Blueprint in some circumstances may be executed two business days following the
day the order is placed with Merrill Lynch. Investments in the Trust through
Blueprint may be made only through Merrill Lynch. Such orders should be sent to
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Attention: The Merrill Lynch
Blueprint(SM) Program, P.O. Box 30441, New Brunswick, New Jersey 08989-0441.
Blueprint maintains a toll-free telephone number for inquiries: (800) 637-3766.
Investors who are not placing orders through Blueprint and who desire same-day
effectiveness should utilize the Payment by Wire procedure described below.
Merrill Lynch has an order procedure pursuant to which investors can have the
proceeds from the sale of listed securities invested in shares of the Trust on
the day investors receive such proceeds in their Merrill Lynch securities
accounts. Investors with free cash credit balances (i.e., immediately available
funds) in securities accounts of Merrill Lynch will not have their funds
invested in the Trust until the day after the order is placed with Merrill Lynch
and will not receive the daily dividend which would have been received had their
funds been invested in the Trust on the day the order was placed with Merrill
Lynch.

Payment by Wire. An expeditious method of investing in the Trust is
through the transmittal of Federal Funds by wire to the Transfer Agent. The
Trust will not be responsible for delays in the wiring system. To purchase
shares by wiring Federal Funds, payment should be wired to First Union National
Bank of Florida. Shareholders should give their financial institutions the
following wiring instructions: ABA #063000021, DDA #2112600061186, Financial
Data Services, Inc. The wire should be identified as a payment to Merrill Lynch
Ready Assets Trust and should include the shareholder's name and account number.
Failure to submit the required information may delay investment. Investors are
urged to make payment by wire in Federal Funds.

Payment to the Transfer Agent. Purchase orders for which remittance is to
be made by check may be submitted directly by mail or otherwise to the Transfer
Agent. Purchase orders by mail should be sent to Financial Data Services, Inc.,
P.O. Box 45290, Jacksonville, Florida 32232-5290. Purchase orders which are sent
by hand should be delivered to Financial Data Services, Inc., 4800 Deer Lake
Drive East, Jacksonville, Florida 32246-6484. Investors opening a new account
must enclose a completed Purchase Application. Existing shareholders should
enclose the detachable stub from a monthly account statement that they have

12
<PAGE> 35

received. Checks should be made payable to Merrill Lynch Funds Distributor.
Certified checks are not necessary, but checks are accepted subject to
collection at full face value in U.S. funds and must be drawn in U.S. dollars on
a U.S. bank. Payments for the accounts of corporations, foundations and other
organizations may not be made by third party checks.

DISTRIBUTION PLAN

The Trust has adopted an Amended and Restated Shareholder Servicing Plan
and Agreement (the "Plan") in compliance with Rule 12b-1 under the Investment
Company Act pursuant to which the Trust is authorized to pay Merrill Lynch a fee
at the annual rate of 0.125% of the average daily net asset value of Trust
accounts maintained through Merrill Lynch. The Plan reimburses Merrill Lynch
only for actual expenses incurred in the fiscal year in which the fee is paid.
The fee is principally to provide compensation to Merrill Lynch Financial
Consultants and other Merrill Lynch personnel for providing direct personal
services to shareholders of the Trust. The distribution fee is not compensation
for the administrative and operational services rendered to shareholders by
Merrill Lynch, which are covered by the Management Agreement between the Trust
and the Manager (see "Management of the Fund--Management and Advisory
Arrangements").

The Trustees believe that the Trust's expenditures under the Plan benefit
the Trust and its shareholders by providing better shareholder services and by
facilitating the sale and distribution of Trust shares. Under the Plan, as
amended to date, Merrill Lynch, in its sole discretion, may expend out of the
fee an amount not exceeding 0.01% of such average daily net asset value as
reimbursement for expenditures incurred in advertising activities, promoting the
sale, marketing and distribution of the shares of the Trust. For the fiscal year
ended December 31, 1998, $8,410,874 was paid to Merrill Lynch pursuant to the
Plan (based on average daily net assets of approximately $7.2 billion).

Among other things, the Plan provides that Merrill Lynch shall provide and
the Trustees of the Trust shall review quarterly reports of the distribution
expenditures made by Merrill Lynch pursuant to the Plan. In their consideration
of the Plan, the Trustees must consider all factors they deem relevant,
including information as to the benefits of the Plan to the Trust and its
shareholders. The Plan further provides that, so long as the Plan remains in
effect, the selection and nomination of Trustees of the Trust who are not
"interested persons" of the Trust as defined in the Investment Company Act (the
"Independent Trustees") shall be committed to the discretion of the Independent
Trustees then in office. The Plan can be terminated at any time, without
penalty, by the vote of a majority of the Independent Trustees or by the vote of
the holders of a majority of the outstanding voting securities of the Trust.
Finally, the Plan cannot be amended to increase materially the amount to be
spent by the Trust thereunder without shareholder approval, and all material
amendments are required to be approved by vote of the Trustees of the Trust,
including a majority of the Independent Trustees, cast in person at a meeting
called for that purpose.

REDEMPTION OF SHARES

Reference is made to "How to Buy, Sell and Transfer Shares" in the
Prospectus.

The Trust is required to redeem for cash all full and fractional shares of
the Trust. The redemption price is the net asset value per share next determined
after receipt by the Transfer Agent of proper notice of redemption as described
in accordance with one of the procedures set forth below. If such notice is
received by the Transfer Agent prior to the determination of net asset value on
that day (generally 4:00 p.m., New York time), the redemption will be effective
on such day and payment will be made on the next business day. If the notice is
received after the determination of net asset value has been made, the
redemption will be effective on the next business day and payment will be made
on the second business day thereafter. If notice of a redemption of shares held
in connection with Blueprint is received by Merrill Lynch prior to the Trust's
determination of net asset value, it will be effective on the business day
following receipt of the redemption request. If the notice is received after the
determination of net asset value has been made, the redemption will be effective
on the second business day thereafter.

13
<PAGE> 36

At various times, the Trust may be requested to redeem shares for which
good payment has not yet been received, e.g., cash, Federal Funds or a certified
check drawn on a U.S. bank. The Trust may delay, or cause to be delayed, the
payment of redemption proceeds until such time as good payment has been
collected for the purchase of such shares. Normally, this delay will not exceed
10 days. In addition, the Trust reserves the right not to honor redemption
checks or requests for Federal Funds redemptions where the shares to be redeemed
have been purchased by check within 10 days prior to the date the redemption
request is received by the Transfer Agent.

The right to redeem shares or to receive payment with respect to any such
redemption may be suspended for a period of up to seven days. Suspensions of
more than seven days may not be made except (1) for any period (A) during which
the New York Stock Exchange (the "NYSE") is closed other than customary weekend
and holiday closings or (B) during which trading on the NYSE is restricted; (2)
for any period during which an emergency exists as a result of which (A)
disposal by the Trust of securities owned by it is not reasonably practicable or
(B) it is not reasonably practicable for the Trust fairly to determine the value
of its net assets; or (3) for such other periods as the Commission may by order
permit for the protection of security holders of the Trust. The Commission shall
by rules and regulations determine the conditions under which (i) trading shall
be deemed to be restricted and (ii) an emergency shall be deemed to exist within
the meaning of clause (2) above.

The total value of the shareholder's investment in the Trust at the time of
redemption may be more or less than his or her cost, depending on the market
value of the securities held by the Fund at such time and income earned.

METHODS OF REDEMPTION

Set forth below is information as to the five methods pursuant to which
shareholders may redeem shares. In certain instances, the Transfer Agent may
require additional documents in connection with redemptions.

Redemption by Check. Shareholders may redeem shares by check in an amount
not less than $500. At the shareholder's request, the Transfer Agent will
provide the shareholder with checks drawn on the custody account. These checks
can be made payable to the order of any person in any amount not less than $500;
however, these checks may not be used to purchase securities in transactions
with Merrill Lynch. The payee of the check may cash or deposit it like any check
drawn on a bank. When such a check is presented to the Transfer Agent for
payment, the Transfer Agent will present the check to the Trust as authority to
redeem a sufficient number of full and fractional shares in the shareholder's
account to cover the amount of the check. This enables the shareholder to
continue earning daily dividends until the check is cleared. Canceled checks
will be returned to the shareholder by the Transfer Agent upon request.

Shareholders will be subject to the Transfer Agent's rules and regulations
governing such checking accounts, including the right of the Transfer Agent not
to honor checks in amounts exceeding the value of the shareholder's account at
the time the check is presented for payment. The Trust or the Transfer Agent may
modify or terminate the redemption by check privilege at any time on 30 days'
notice to participating shareholders. In order to be eligible for the redemption
by check privilege, purchasers should check the box under the caption "Check
Redemption Privilege" in the Purchase Application. The Transfer Agent will then
send checks to the shareholders.

Federal Funds Redemption. Shareholders also may arrange to have redemption
proceeds of $5,000 or more wired in Federal Funds to a pre-designated bank
account. In order to be eligible for Federal Funds redemption, the shareholder
must designate on his or her Purchase Application the domestic commercial bank
and account number to receive the proceeds of his or her redemption and must
have his or her signature on the Purchase Application signature guaranteed. The
redemption request for Federal Funds redemption may be made by telephone, wire
or letter (no signature guarantee required) to the Transfer Agent and, if
received before the determination of net asset value of the Trust on any
business day (generally 4:00 p.m., New York time), the redemption proceeds will
be wired to the investor's pre-designated bank account on the next business day.
Shareholders may effect Federal Funds redemptions by telephoning the Transfer
Agent toll-free at (800) 221-7210. The Trust will employ reasonable procedures
to confirm that instructions communicated
14
<PAGE> 37

by telephone are genuine; if it does not, the Trust may be liable for any losses
due to fraudulent or unauthorized instructions. Among other things, redemption
proceeds may only be wired into the bank account designated on the Purchase
Application. The investor must independently verify this information at the time
the redemption request is made.

Repurchase Through Securities Dealers. The Trust will repurchase shares
through securities dealers. The Trust normally will accept orders to repurchase
shares by wire or telephone from dealers for customers at the net asset value
next computed after receipt of the order from the dealer, provided that such
request for repurchase is received from the dealer prior to the determination of
net asset value of the Fund (generally 4:00 p.m., Eastern time) on any business
day. These repurchase arrangements are for the convenience of shareholders and
do not involve a charge by the Trust; however, dealers may impose a charge on
the shareholder for transmitting the notice of repurchase to the Trust.
Redemption of Trust shares held in connection with Blueprint may be made only
through Merrill Lynch. Such a redemption may be made by submitting a written
notice by mail directly to Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Attention: The Merrill Lynch Blueprint(SM) Program, P.O. Box 30441, New
Brunswick, New Jersey 08989-0441. Investors whose shares are held through
Blueprint also may effect notice of redemption by telephoning Merrill Lynch
toll-free at (800) 637-3766. The Trust reserves the right to reject any order
for repurchase through a securities dealer, but it may not reject properly
submitted requests for redemption as described below. The Trust will promptly
notify any shareholder of any rejection of a repurchase with respect to his or
her shares. For shareholders repurchasing through their securities dealer,
payment will be made by the Transfer Agent to the dealer.

Regular Redemption. Shareholders may redeem shares by submitting a written
notice by mail directly to the Transfer Agent, Financial Data Services, Inc.,
P.O. Box 45290, Jacksonville, Florida 32232-5290. Redemption requests which are
sent by hand should be delivered to Financial Data Services, Inc., 4800 Deer
Lake Drive East, Jacksonville, Florida 32246-6484. Redemption requests should
not be sent to the Trust. The notice requires the signatures of all persons in
whose name the shares are registered, signed exactly as their names appear on
the Transfer Agent's register. The signature(s) on the redemption request must
be guaranteed by an "eligible guarantor institution" as such term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, and the
existence and validity of it may be verified by the Transfer Agent through the
use of industry publications. Notarized signatures are not sufficient.

Automatic Redemption. Merrill Lynch has instituted an automatic redemption
procedure applicable to shareholders of the Trust who maintain securities
accounts with Merrill Lynch. This procedure, which is not applicable to margin
accounts, may be utilized by Merrill Lynch to satisfy amounts due it by the
shareholder as a result of account fees and expenses owed to Merrill Lynch or
one of its affiliates or as a result of purchases of securities or other
transactions in the shareholder's securities account. Under this procedure,
unless the shareholder notifies Merrill Lynch to the contrary, the shareholder's
Merrill Lynch securities account will be scanned each business day prior to the
determination of net asset value of the Trust (generally 4:00 p.m., New York
time); after application of any cash balances in the account, a sufficient
number of Trust shares may be redeemed at net asset value, as determined that
day, to satisfy any amounts for which the shareholder is obligated to make
payment to Merrill Lynch or one of its affiliates. Redemptions will be effected
on the business day preceding the date the shareholder is obligated to make such
payment, and Merrill Lynch or its affiliate will receive the redemption proceeds
on the day following the redemption date. Shareholders will receive all
dividends declared and reinvested through the date of redemption.

Unless otherwise requested, in those instances where shareholders request
transactions that settle on a "same-day" basis (such as Federal Funds wire
redemptions, branch office checks, transfers to other Merrill Lynch accounts and
certain securities transactions) the Trust shares necessary to effect such
transactions will be deemed to have been transferred to Merrill Lynch prior to
the Trust's declaration of dividends on that day. In such instances,
shareholders will receive all dividends declared and reinvested through the date
immediately preceding the date of redemption.

Due to the relatively high cost of maintaining accounts of less than
$1,000, the Trust reserves the right to redeem shares in any account for their
then current value (which will be promptly paid to the shareholder), if

15
<PAGE> 38

at any time the total investment does not have a value of at least $1,000.
Shareholders will be notified that the value of their account is less than
$1,000 and allowed two months to make an additional investment before the
redemption is processed. In such an event, the $1,000 minimum on subsequent
investment will not be applicable.

DETERMINATION OF NET ASSET VALUE

The net asset value of the Trust is determined by the Manager once daily,
immediately after the daily declaration of dividends, on each business day
during which the NYSE or New York banks are open for business. Such
determination is made as of the close of business on the NYSE (generally 4:00
p.m., New York time) or, on days when the NYSE is closed but New York banks are
open, at 4:00 p.m., New York time. As a result of this procedure, the net asset
value is determined each day except for days on which both the NYSE and New York
banks are closed. Both the NYSE and New York banks are closed on New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The net asset value is determined
under the "penny-rounding" method by adding the value of all securities and
other assets in the portfolio, deducting the portfolio's liabilities, dividing
by the number of shares outstanding and rounding the result to the nearest whole
cent.

The Trust values its portfolio securities with remaining maturities of 60
days or less on an amortized cost basis and values its securities with remaining
maturities of greater than 60 days for which market quotations are readily
available at market value. Other securities held by the Fund are valued at their
fair value as determined in good faith by or under the direction of the Board of
Trustees.

In accordance with the Commission rule applicable to the valuation of its
portfolio securities, the Trust will maintain a dollar-weighted average
portfolio maturity of 90 days or less and will purchase instruments having
remaining maturities of not more than 397 days (13 months), with the exception
of Government Securities, as defined in those regulations which may have
remaining maturities of up to 762 days (25 months). The Trust will invest only
in securities determined by the Trustees to be of high quality with minimal
credit risks. In addition, the Trustees have established procedures designed to
stabilize, to the extent reasonably possible, the Trust's price per share as
computed for the purpose of sales and redemptions at $1.00. Deviations of more
than an insignificant amount between the net asset value calculated using market
quotations and that calculated on a "penny-rounded" basis will be reported to
the Trustees by the Manager. In the event the Trustees determine that a
deviation exists which may result in material dilution or other unfair results
to investors or existing shareholders, the Trust will take such corrective
action as it regards as necessary and appropriate, including the reduction of
the number of outstanding shares of the Trust by having each shareholder
proportionately contribute shares to the Trust's capital; the sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
average portfolio maturity; withholding dividends; or establishing a net asset
value per share solely by using available market quotations. If the number of
outstanding shares is reduced in order to maintain a constant penny-rounded net
asset value of $1.00 per share, the shareholders will contribute proportionately
to the Trust's capital. Each shareholder will be deemed to have agreed to such
contribution by his or her investment in the Trust.

Since the net income of the Trust (including realized gains and losses on
the portfolio securities) is determined and declared as a dividend immediately
prior to each time the net asset value of the Trust is determined, the net asset
value per share of the Trust normally remains at $1.00 per share immediately
after each such dividend declaration. Any increase in the value of a
shareholder's investment in the Trust, representing the reinvestment of dividend
income, is reflected by an increase in the number of shares of the Fund in his
or her account and any decrease in the value of a shareholder's investment may
be reflected by a decrease in the number of shares in his or her account. See
"Dividends and Taxes."

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<PAGE> 39

YIELD INFORMATION

The Trust normally computes its annualized yield by determining the net
income for a seven-day base period for a hypothetical pre-existing account
having a balance of one share at the beginning of the base period, dividing the
net income by the net asset value of the account at the beginning of the base
period to obtain the base period return, multiplying the result by 365 and then
dividing by seven. Under this calculation, the yield reflects realized and
unrealized gains and losses on portfolio securities. In accordance with
regulations adopted by the Commission, the Trust is required to disclose its
annualized yield for certain seven-day base periods in a standardized manner
that does not take into consideration any realized or unrealized gains or losses
on portfolio securities. The Commission also permits the calculation of a
standardized effective or compounded yield. This is computed by compounding the
unannualized base period return, which is done by adding one to the base period
return, raising the sum to a power equal to 365 divided by seven, and
subtracting one from the result. This compounded yield calculation also excludes
realized and unrealized gains or losses on portfolio securities.

The yield on the Trust's shares normally will fluctuate on a daily basis.
Therefore, the yield for any given past period is not an indication or
representation by the Trust of future yields or rates of return on its shares.
The yield is affected by such factors as changes in interest rates on the
Trust's portfolio securities, average portfolio maturity, the types and quality
of portfolio securities held and operating expenses. The yield on Trust shares
for various reasons may not be comparable to the yield on bank deposits, shares
of other money market funds or other investments.

<TABLE>
<CAPTION>
SEVEN-DAY PERIOD ENDED DECEMBER 31, 1998
----------------------------------------
<S> <C>
Excluding gains and losses.................................. 4.64%
</TABLE>

On occasion, the Trust may compare its yield to (1) the Donoghue's Domestic
Prime Funds Average, an average compiled by Donoghue's Money Fund Report, a
widely recognized independent publication that monitors the performance of money
market mutual funds, (2) the average yield reported by the Bank Rate Monitor
National Index(TM) for money market deposit accounts offered by the 100 leading
banks and thrift institutions in the ten largest standard metropolitan
statistical areas, (3) yield data published by Lipper Analytical Services, Inc.,
Morningstar Publications, Inc., Money Magazine, U.S. News & World Report,
Business Week, CDA Investment Technology, Inc., Forbes Magazine and Fortune
Magazine, or (4) the yield on an investment in 91-day Treasury bills on a
rolling basis, assuming quarterly compounding. As with yield quotations, yield
comparisons should not be considered indicative of the Trust's yield or relative
performance for any future period.

PORTFOLIO TRANSACTIONS

The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policy
established by the Board of Trustees of the Trust, the Manager is primarily
responsible for the Trust's portfolio decisions and the placing of portfolio
transactions. In placing orders, it is the policy of the Trust to obtain the
best net results taking into account such factors as price (including the
applicable dealer spread), the size, type and difficulty of the transaction
involved, the firm's general execution and operational facilities, and the
firm's risk in positioning the securities involved. While the Manager generally
seeks reasonably competitive spreads or commissions, the Trust will not
necessarily be paying the lowest spread or commission available. The Trust's
policy of investing in securities with short maturities will result in high
portfolio turnover.

The money market securities in which the Trust invests are traded primarily
in the over-the-counter ("OTC") market. Bonds and debentures usually are traded
OTC, but may be traded on an exchange. Where possible, the Trust will deal
directly with the dealers who make a market in the securities involved except in
those circumstances where better prices and execution are available elsewhere.
Such dealers usually are acting as principals for their own accounts. On
occasion, securities may be purchased directly from the issuer. Money market
securities are generally traded on a net basis and do not normally involve
either brokerage commissions

17
<PAGE> 40

or transfer taxes. The cost of executing portfolio securities transactions of
the Trust primarily will consist of dealer spreads. Under the Investment Company
Act, persons affiliated with the Trust are prohibited from dealing with the
Trust as principals in the purchase and sale of securities unless an exemptive
order allowing such transactions is obtained from the Commission. Since OTC
transactions are usually principal transactions, affiliated persons of the
Trust, including Merrill Lynch Government Securities, Inc. ("GSI") and Merrill
Lynch, may not serve as the Trust's dealer in connection with such transactions
except pursuant to the exemptive order described below. However, an affiliated
person of the Trust may serve as its broker in OTC transactions conducted on an
agency basis.

The Commission has issued an exemptive order permitting the Trust to
conduct principal transactions with GSI in U.S. Government and U.S. Government
agency securities and with Merrill Lynch Money Markets Inc., a subsidiary of
GSI, in certificates of deposit and other short-term money market instruments
and commercial paper. This order contains a number of conditions, including
conditions designed to ensure that the price to the Trust from GSI or its
subsidiary is equal to or better than that available from other sources. GSI and
its subsidiary have informed the Trust that they will in no way, at any time,
attempt to influence or control the activities of the Trust or the Manager in
placing such principal transactions. The exemptive order allows GSI or its
subsidiary, to receive a dealer spread on any transaction with the Trust no
greater than their customary dealer spread from transactions of the type
involved. Generally, such spreads do not exceed 0.25% of the principal amount of
the securities involved.

The number and dollar volume of transactions engaged in by the Trust are
set forth in the following table:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31, NUMBER DOLLAR VOLUME
------------------------------ ------ -------------
<S> <C> <C>
1998........................................... 45 $1.2 billion
1997........................................... 40 $1.2 billion
1996........................................... 40 $1.7 billion
</TABLE>

The Trustees of the Trust have considered the possibilities of recapturing
for the benefit of the Trust expenses of possible portfolio transactions, such
as dealer spreads and underwriting commissions, by conducting such portfolio
transactions through affiliated entities, including GSI, its subsidiary and
Merrill Lynch. For example, dealer spreads received by GSI or its subsidiary on
transactions conducted pursuant to the exemptive order described above could be
offset against the management fee payable by the Trust to the Manager. After
considering all factors deemed relevant, the Board of Trustees made a
determination not to seek such recapture. The Trustees will reconsider this
matter from time to time.

The Trust does not expect to use one particular dealer, but, subject to
obtaining the best price and execution, dealers who provide supplemental
investment research (such as economic data and market forecasts) to the Manager
may receive orders for transactions of the Trust. Information so received will
be in addition to and not in lieu of the services required to be performed by
the Manager under the Management Agreement and the expenses of the Manager will
not necessarily be reduced as a result of the receipt of such supplemental
information.

SHAREHOLDER SERVICES

The Trust offers a number of shareholder services described below that are
designed to facilitate investment in shares of the Trust. Full details as to
each of such services and copies of the various plans and instructions as to how
to participate in the various services or plans, or how to change options with
respect thereto, can be obtained from the Trust, by calling the telephone number
on the cover page hereof, or from the Distributor or Merrill Lynch.

INVESTMENT ACCOUNT

Each shareholder whose account is maintained at the Transfer Agent has an
Investment Account and will receive from the Transfer Agent a monthly report
showing the activity in his or her account for the month. A shareholder may make
additions to his or her Investment Account at any time by purchasing shares at
the

18
<PAGE> 41

applicable public offering price either through his or her securities dealer, by
wire or by mail directly to the Transfer Agent, acting as agent for his or her
dealer. A shareholder may ascertain the number of shares in his or her
Investment Account by telephoning the Transfer Agent toll-free at (800)
221-7210. The Transfer Agent will furnish this information only after the
shareholder has specified the name, address, account number and social security
number of the registered owner or owners. Shareholders also may maintain their
accounts through Merrill Lynch. Upon the transfer of shares out of a Merrill
Lynch brokerage account, an Investment Account in the transferring shareholder's
name may be opened at the Transfer Agent. Shareholders considering transferring
a tax-deferred retirement account such as an IRA from Merrill Lynch to another
brokerage firm or financial institution should be aware that, if the firm to
which the retirement account is to be transferred will not take delivery of
shares of the Trust, a shareholder must either redeem the shares so that the
cash proceeds can be transferred to the account at the new firm, or such
shareholder must continue to maintain a retirement account at Merrill Lynch for
those shares.

In the interest of economy and convenience and because of the operating
procedures of the Trust, certificates representing the Trust's shares will not
be issued physically. Shares are maintained by the Trust on its register
maintained by the Transfer Agent and the holders thereof will have the same
rights and ownership with respect to such shares as if certificates had been
issued.

FEE-BASED PROGRAMS

Trust shares may be held in certain Merrill Lynch fee-based programs,
including pricing alternatives for securities transactions (each referred to in
this paragraph as a "Program"). These Programs generally prohibit such shares
from being transferred to another account at Merrill Lynch, to another
broker-dealer or to the Transfer Agent. Except in limited circumstances (which
may also involve an exchange as described above), such shares must be redeemed
and new shares purchased in order for the investment not to be subject to
Program fees. Additional information regarding a specific Program (including
charges and limitations on transferability applicable to shares that may be held
in such Program) is available in such Program's client agreement and from the
Transfer Agent at (800) MER-FUND (637-3863).

AUTOMATIC INVESTMENT PLAN

The Trust offers an Automatic Investment Plan in connection with accounts
maintained at the Transfer Agent whereby the Transfer Agent is authorized
through preauthorized checks of $50 or more to charge the regular bank account
of the shareholder on a regular basis to provide systematic additions to the
Investment Account of such shareholder. See the Purchase Application in the
Prospectus. A shareholder's Automatic Investment Plan may be terminated at any
time without charge or penalty by the shareholder, the Trust, the Transfer Agent
or the Distributor.

ACCRUED MONTHLY PAYOUT PLAN

The dividends of the Trust are reinvested automatically in additional
shares. Shareholders with accounts maintained at the Transfer Agent desiring
cash payments may enroll in the Accrued Monthly Payout Plan, under which shares
equal in number to shares credited through the automatic reinvestment of
dividends during each month are redeemed at net asset value on the last Friday
of such month in order to meet the monthly distribution. Investors may open an
Accrued Monthly Payout Plan by completing the appropriate portion of the
Purchase Application in the Prospectus. A shareholder's Accrued Monthly Payout
Plan may be terminated at any time without charge or penalty by the shareholder,
the Trust, the Transfer Agent or the Distributor.

SYSTEMATIC WITHDRAWAL PLAN

A shareholder may elect to make systematic withdrawals from an Investment
Account on either a monthly or quarterly basis as provided below. Quarterly
withdrawals are available for shareholders who have acquired shares of the Trust
having a value, based on cost or the current offering price of $5,000 or more,
and

19
<PAGE> 42

monthly withdrawals for shareholders with shares with such a value of $10,000 or
more. The quarterly periods end on the 24th day of March, June, September and
December.

At the time of each withdrawal payment, sufficient shares are redeemed from
those on deposit in the shareholder's account to provide the withdrawal payment
specified by the shareholder. The shareholder may specify either a dollar amount
or a percentage of the value of his or her shares. Redemptions will be made at
net asset value as determined at the close of business on the New York Stock
Exchange on the 24th day of each month or the 24th day of the last month of each
quarter, whichever is applicable. A shareholder's Systematic Withdrawal Plan may
be terminated at any time, without charge or penalty, by the shareholder, the
Trust, the Transfer Agent or the Distributor. A shareholder may not elect to
make systematic withdrawals while he or she is enrolled in the Accrued Monthly
Payout Plan. The Trust is not responsible for any failure of delivery to the
shareholder's address of record and no interest will accrue on amounts
represented by uncashed distribution or redemption checks.

Withdrawal payments should not be considered as dividends. Withdrawals are
sales of shares and may result in taxable gain or loss. If periodic withdrawals
continuously exceed reinvested dividends, the shareholder's original investment
will be reduced correspondingly. Shareholders are cautioned not to designate
withdrawal programs that result in an undue reduction of principal. There are no
minimums on amounts that may be systematically withdrawn. Periodic investments
may not be made into an Investment Account in which the shareholder has elected
to make systematic withdrawals.

RETIREMENT PLANS

Self-directed individual retirement accounts and other retirement plans are
available from Merrill Lynch. Under these plans, investments may be made in the
Trust and in certain of the other mutual funds sponsored by Merrill Lynch as
well as in other securities. Merrill Lynch charges an initial establishment fee
and an annual custodial fee for each account. Information with respect to these
plans is available upon request from Merrill Lynch. In addition, eligible
shareholders of the Trust may participate in a variety of qualified employee
benefit plans which are available from the Distributor. Participants in these
plans may invest in the Trust and in certain other mutual funds sponsored by
Merrill Lynch. Information with respect to these plans is available upon request
from the Distributor.

DIVIDENDS AND TAXES

DIVIDENDS

Dividends are declared and reinvested daily in the form of additional
shares at net asset value. Shareholders will receive statements monthly as to
such reinvestments. Shareholders liquidating their holdings will receive on
redemption all dividends declared and reinvested through the date of redemption.
Since the net income (including realized gains and losses on the portfolio
assets) is declared as a dividend in shares each time the net income of the
Trust is determined, the net asset value per share of the Trust normally remains
constant at $1.00 per share. Fluctuations in value may be reflected in the
number of outstanding shares in the shareholders' accounts.

Net income (from the time of the immediately preceding determination
thereof) consists of (i) interest accrued and/or discount earned (including both
original issue and marker discount), (ii) plus or minus all realized gains and
losses on portfolio securities, (iii) less amortization of premiums and the
estimated expenses of the Trust applicable to that dividend period.

TAXES

The Trust intends to continue to qualify for the special tax treatment
afforded regulated investment companies ("RICs") under the Internal Revenue Code
of 1986, as amended (the "Code"). As long as the Trust so qualifies, the Trust
(but not its shareholders) will not be subject to Federal income tax on the part
of

20
<PAGE> 43

its net ordinary income and net realized capital gains which it distributes to
shareholders. The Trust intends to distribute substantially all of such income.

The Code requires a RIC to pay a nondeductible 4% excise tax to the extent
the RIC does not distribute, during each calendar year, 98% of its ordinary
income, determined on a calendar year basis, and 98% of its capital gains,
determined, in general on an October 31 year end, plus certain undistributed
amounts from previous years. While the Trust intends to distribute its income
and capital gains in the manner necessary to minimize imposition of the 4%
excise tax, there can be no assurance that sufficient amounts of the Trust's
taxable income and capital gains will be distributed to avoid entirely the
imposition of the tax. In such event, the Trust will be liable for the tax only
on the amount by which it does not meet the foregoing distribution requirements.

Dividends paid by the Trust from its ordinary income or from an excess of
net short-term capital gains over net long-term capital losses (together
referred to hereafter as "ordinary income dividends") are taxable to
shareholders as ordinary income. Distributions made from an excess of net
long-term capital gains over net short-term capital losses ("capital gains
dividends") are taxable to shareholders as long-term gains, regardless of the
length of time the shareholder has owned Trust shares. Certain categories of
capital gains are taxable at different rates. Any loss upon the sale or exchange
of Trust shares held for six months or less will be treated as long-term capital
loss to the extent of any capital gain dividends received by the shareholder.
Distributions in excess of the Trust's earnings and profits will first reduce
the adjusted tax basis of a holder's shares and, after such adjusted tax basis
is reduced to zero, will constitute capital gains to such holder (assuming the
shares are held as a capital asset). Generally not later than 60 days after the
close of its taxable year, the Trust will provide its shareholders with a
written notice designating the amounts of any capital gain dividends.

Dividends are taxable to shareholders even though they are reinvested in
additional shares of the Trust. Distributions by the Trust, whether from
ordinary income or capital gains, will not be eligible for the dividends
received deduction allowed to corporations under the Code. If the Trust pays a
dividend in January that was declared in the previous October, November or
December to shareholders of record on a specified date in one of such months,
then such dividend will be treated for tax purposes as being paid by the Trust
and received by its shareholders on December 31 of the year in which such
dividend was declared.

If the value of assets held by the Trust declines, the Trustees may
authorize a reduction in the number of outstanding shares in shareholders'
accounts so as to preserve a net asset value of $1.00 per share. After such a
reduction, the basis of eliminated shares would be added to the basis of
shareholders' remaining Trust shares, and any shareholders disposing of shares
at that time may recognize a capital loss. Dividends, including dividends
reinvested in additional shares of the Trust, will nonetheless be fully taxable,
even if the number of shares in shareholders' accounts has been reduced as
described above.

A loss realized on a sale or exchange of shares of the Trust will be
disallowed if other Trust shares are acquired (whether through the automatic
reinvestment of dividends or otherwise) within a 61-day period beginning 30 days
before and ending 30 days after the date that the shares are disposed of. In
such a case, the basis of the shares acquired will be adjusted to reflect the
disallowed loss.

Ordinary income dividends paid to shareholders who are nonresident aliens
or foreign entities will be subject to a 30% United States withholding tax under
existing provisions of the Code applicable to foreign individuals and entities
unless a reduced rate of withholding or a withholding exemption is provided
under applicable treaty law. Nonresident shareholders are urged to consult their
own tax advisers concerning applicability of the United States withholding tax.

Dividends and interest received by the Trust may give rise to withholding
and other taxes imposed by foreign countries. Tax conventions between certain
countries and the United States may reduce or eliminate such taxes.

Under certain provisions of the Code, some shareholders may be subject to a
31% withholding tax on ordinary income dividends, capital gain dividends and
redemption payments ("backup withholding"). Generally, shareholders subject to
backup withholding will be those for whom no certified taxpayer identification
number is on file with the Trust or who, to the Trust's knowledge, have
furnished an incorrect
21
<PAGE> 44

number. When establishing an account, an investor must certify under penalty of
perjury that such number is correct and that such investor is not otherwise
subject to backup withholding.

The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations presently in effect. For the
complete provisions, reference should be made to the pertinent Code sections and
the Treasury regulations promulgated thereunder. The Code and the Treasury
regulations are subject to change by legislative, judicial or administrative
action either prospectively or retroactively.

Ordinary income and capital gain dividends may also be subject to state and
local taxes.

Certain states exempt from state income taxation dividends paid by RICs
which are derived from interest on United States Treasury obligations. State law
varies as to whether dividend income attributable to United States Treasury
obligations is exempt from state income tax.

Shareholders are urged to consult their tax advisers regarding specific
questions as to Federal, foreign, state or local taxes. Foreign investors should
consider applicable foreign taxes in their evaluation of investment in the Fund.

GENERAL INFORMATION

DESCRIPTION OF SHARES

The Trust was organized on May 14, 1987 under the laws of the Commonwealth
of Massachusetts. The Trust is a successor to a Massachusetts business trust of
the same name organized on January 21, 1975. It is a no-load, diversified
open-end investment company. The Declaration of Trust of the Trust permits the
Trustees to issue an unlimited number of full and fractional shares of
beneficial interest, par value $.10 per share, of a single class and to divide
or combine the shares into a greater or lesser number of shares without thereby
changing the proportionate beneficial interests in the Trust. Each share
represents an equal proportionate interest in the Trust with each other share.
Upon liquidation of the Trust, shareholders are entitled to share pro rata in
the net assets of the Trust available for distribution to shareholders. Shares
are fully paid and non-assessable by the Trust.

Shareholders are entitled to one vote for each full share held and
fractional votes for fractional shares held and vote in the election of Trustees
and on other matters submitted to the vote of shareholders. Voting rights are
not cumulative, so that the holders of more than 50% of the shares voting in the
election of Trustees can, if they choose to do so, elect all Trustees of the
Trust. No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust except
under certain limited circumstances set forth in the Declaration of Trust.

The Declaration of Trust of the Trust does not require that the Trust hold
annual meetings of shareholders. However, the Trust will be required to call
special meetings of shareholders in accordance with the requirements of the
Investment Company Act to seek approval of new management and advisory
arrangements, of a material increase in distribution fees or of a change in the
fundamental policies, objectives or restrictions of the Trust. The Trust also
would be required to hold a special shareholders' meeting to elect new Trustees
at such time as less than a majority of the Trustees holding office have been
elected by shareholders. The Declaration provides that a shareholders' meeting
may be called for any reason at the request of 10% of the outstanding shares of
the Trust or by a majority of the Trustees. Except as set forth above, the
Trustees shall continue to hold office and appoint successor Trustees.

INDEPENDENT AUDITORS

Deloitte & Touche LLP, 117 Campus Drive, Princeton, New Jersey 08540-6400,
has been selected as the independent auditors of the Trust. The selection of
independent auditors is subject to approval by the non-interested Trustees of
the Trust. The independent auditors are responsible for auditing the annual
financial statements of the Trust.

22
<PAGE> 45

CUSTODIAN

The Bank of New York, 90 Washington Street, 12th Floor, New York, New York
10286 (the "Custodian"), acts as custodian of the Trust's assets. The Custodian
is responsible for safeguarding and controlling the Trust's cash and securities,
handling the receipt and delivery of securities and collecting interest and
dividends on the Trust's investments.

TRANSFER AGENT

Financial Data Services, Inc., 4800 Deer Lake Drive East, Jacksonville,
Florida 32246-6484, acts as the Fund's Transfer Agent. The Transfer Agent is
responsible for the issuance, transfer and redemption of shares and the opening,
maintenance and servicing of shareholder accounts. See "How to Buy, Sell, and
Transfer Shares -- Through the Transfer Agent" in the Prospectus.

LEGAL COUNSEL

Brown & Wood LLP, One World Trade Center, New York, New York 10048-0557, is
counsel for the Trust.

REPORTS TO SHAREHOLDERS

The fiscal year of the Trust ends on December 31 of each year. The Trust
sends to its shareholders, at least semi-annually, reports showing the Trust's
portfolio and other information. An annual report, containing financial
statements audited by independent auditors, is sent to shareholders each year.

SHAREHOLDER INQUIRIES

Shareholder inquiries may be addressed to the Trust at the address or
telephone number set forth on the cover page of this Statement of Additional
Information.

ADDITIONAL INFORMATION

The Prospectus and this Statement of Additional Information with respect to
the shares of the Trust do not contain all the information set forth in the
Registration Statement and the exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act and the Investment Company Act, to which reference is hereby
made.

To the knowledge of the Trust, no person or entity owned beneficially 5% or
more of the Trust's shares as of April 1, 1999.

The Declaration of Trust establishing the Trust, dated May 14, 1987, a copy
of which, together with all amendments thereto (the "Declaration"), is on file
in the office of the Secretary of the Commonwealth of Massachusetts, provides
that the name "Merrill Lynch Ready Assets Trust" refers to the Trustees under
the Declaration collectively as Trustees, but not as individuals or personally,
and no Trustee, shareholder, officer, employee or agent of the Trust shall be
held to any personal liability, nor shall resort be had to their property for
the satisfaction of any obligation or claim of the Trust but the "Trust
Property" (as defined in the Declaration) only shall be liable.

FINANCIAL STATEMENTS

The Trust's audited financial statements are incorporated in this Statement
of Additional Information by reference to its 1998 annual report to
shareholders. You may request a copy of the annual report at no charge by
calling (800) 456-4587 ext. 789 between 8:00 a.m. and 8:00 p.m. on any business
day.

23
<PAGE> 46

APPENDIX

DESCRIPTION OF COMMERCIAL PAPER, BANK MONEY INSTRUMENTS
AND CORPORATE BOND RATINGS

COMMERCIAL PAPER AND BANK MONEY INSTRUMENTS

Commercial paper with the greatest capacity for timely payment is rated A
by Standard & Poor's ("S&P"). Issues within this category are further redefined
with designations 1, 2 and 3 to indicate the obligor's capacity to meet its
financial obligations; A-1, the highest of the three, indicates the obligor's
capacity to meet its financial obligations is either strong or extremely strong
(if this designation includes a plus sign (+)); A-2 indicates that the obligor's
capacity to meet its financial obligations is satisfactory.

Moody's Investors Service, Inc. ("Moody's") employs the designations of
Prime-1, Prime-2 and Prime-3 to indicate the relative ability of the rated
issuers to repay punctually. Prime-1 issues have a superior ability for
repayment, Prime-2 issues have a strong ability for repayment, but to a lesser
degree than Prime-1.

Fitch IBCA, Inc. ("Fitch") employs the rating F-1+ to indicate issues
regarded as having the strongest capacity for timely payment. The rating F-1
reflects an assurance of timely payment only slightly less in degree than issues
rated F-1+, while the rating F-2 indicates a satisfactory capacity for timely
payment, although the margin of safety is not as great as indicated by the F-1+
and F-1 categories.

Duff & Phelps Credit Rating Co. ("Duff & Phelps") employs the designation
of D-1 with respect to top grade commercial paper and bank money instruments.
D-1+ indicates the highest certainty of timely payment: short-term liquidity is
outstanding, and safety is just below risk-free U.S. Treasury short-term
obligations. D-1 indicates a very high certainty of timely payment. D-1-
indicates high certainty of timely payment. D-2 indicates good certainty of
timely payment: liquidity factors and company fundamentals are sound.

Thomson BankWatch ("TBW") employs the designations TBW-1, TBW-2, TBW-3 and
TBW-4 as ratings for commercial paper, other senior short-term obligations and
deposit obligations of the entities to which the rating has been assigned. TBW-1
is the highest category and indicates a very high likelihood that principal and
interest will be paid on a timely basis. TBW-2 is the second highest category
and indicates that while the degree of safety regarding timely repayment of
principal and interest is strong, the relative degree of safety is not as high
as for issues rated TBW-1.

CORPORATE BONDS

Bonds rated AAA have the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.
Bonds rated AA have a very strong capacity to pay interest and repay principal
and differ from the highest rated issues only in a small degree.

Bonds rated Aaa by Moody's are judged to be of the best quality. Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. Bonds rated Aa are judged to be of high quality by all
standards. They are rated lower than the best bonds because margins of
protection may not be as large or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities. Moody's applies
numerical modifiers, 1, 2 and 3 in each generic rating classification from Aa
through Caa in its corporate bond rating system. The modifier 1 indicates that
the obligation ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the
issue ranks in the lower end of its generic rating category.

Bonds rated AAA by Fitch are obligations for which there is the lowest
expectation of credit risk. This rating is assigned only in case of
exceptionally strong capacity for timely payment of financial commitments. This
capacity is highly unlikely to be adversely affected by foreseeable events.
Bonds rated AA are obligations for which there is a very low expectation of
credit risk. Capacity for timely repayment of principal and interest

24
<PAGE> 47

is substantial. This rating indicates a very strong capacity for timely payment
of financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

Bonds rated AAA by Duff & Phelps are deemed to be of the highest credit
quality: the risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt. AA indicates high credit quality: protection
factors are strong, and risk is modest but may vary slightly from time to time
because of economic conditions.

Bonds rated AAA by TBW are accorded the highest rating category which
indicates that the ability to repay principal and interest on a timely basis is
extremely high. AA is the second highest rating category and indicates a very
strong ability to repay principal and interest on a timely basis with limited
incremental risk compared to issues rated in the highest rating category.

25
<PAGE> 48

CODE #10240-0499

26
<PAGE> 49

PART C. OTHER INFORMATION

ITEM 23. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
1 (a) -- Declaration of Trust of the Registrant, dated May 14,
1987.(a)
(b) -- Amendment to Declaration of Trust of the Registrant,
dated April 29, 1988.(a)
2 -- By-Laws of the Registrant.(a)
3 -- None.
4 (a) -- Management Agreement between the Registrant and Merrill
Lynch Asset Management, L.P.(a)
(b) -- Supplement to Investment Advisory Agreement between the
Registrant and Merrill Lynch Asset Management, L.P.(b)
5 (a) -- Distribution Agreement between the Registrant and Merrill
Lynch Funds Distributor, Inc. (now known as Princeton
Funds Distributor, Inc.)(the "Distributor").(a)
(b) -- Selected Dealer Agreement.(a)
6 -- None.
7 (a) -- Custody Agreement between the Registrant and The Bank of
New York.(a)
7 (b) -- Amendment to the Custody Agreement between the Registrant
and The Bank of New York.(a)
8 (a) -- Transfer Agency, Dividend Disbursing Agency and
Shareholder Servicing Agency Agreement between the
Registrant and Merrill Lynch Financial Data Services,
Inc. (now known as Financial Data Services, Inc.)(a)
8 (b) -- Agreement and Plan of Reorganization between Merrill
Lynch Ready Assets Trust, Merrill Lynch New Assets Trust
and Merrill Lynch New Corporation, Inc.(a)
9 -- Opinion and Consent of Brown & Wood LLP, counsel to the
Registrant.
10 -- Consent of Deloitte & Touche LLP, independent auditors
for the Registrant.
11 -- None.
12 -- Certificate of Merrill Lynch Asset Management, L.P.(a)
13 -- Amended and Restated Shareholder Servicing Plan and
Agreement pursuant to Rule 12b-1 between the Registrant
and Merrill Lynch, Pierce, Fenner & Smith
Incorporated.(b)
14 -- Financial Data Schedule.(c)
15 -- None.
</TABLE>

- ---------------
(a) Filed on April 27, 1995 as an exhibit to Post-Effective Amendment No. 28 to
the Registrant's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended (File No. 2-52711) (the "Registration Statement").

(b) Filed on April 1, 1998 as an exhibit to Post-Effective Amendment No. 31 to
the Registration Statement.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

The Registrant is not controlled by or under common control with any other
person.

ITEM 25. INDEMNIFICATION.

Reference is made to Section 5.3 of the Registrant's Declaration of Trust
and Section 9 of the Distribution Agreement.

Section 5.3 of the Registrant's Declaration of Trust provides as follows:

"The Trust shall indemnify each of its Trustees, officers, employees, and
agents (including persons who serve at its request as directors, officers or
trustees of another organization in which it has any interest as a shareholder,
creditor or otherwise) against all liabilities and expenses (including amounts
paid in satisfaction of judgments, in compromise, as fines and penalties, and as
counsel fees) reasonably incurred by him in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
in which he may be involved or with which he may be threatened, while in office
or thereafter, by reason of his being or having been such a trustee, officer,
employee or agent, except with respect to any matters as to which

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<PAGE> 50

he shall have been adjudicated to have acted in bad faith, willful misfeasance,
gross negligence or reckless disregard of his duties; provided, however, that as
to any matter disposed of by a compromise payment by such person, pursuant to a
consent decree or otherwise, no indemnification either for said payment or for
any other expenses shall be provided unless the Trust shall have received a
written opinion from independent legal counsel approved by the Trustee to the
effect that if either the matter of willful misfeasance, gross negligence or
reckless disregard of duty, or the matter of good faith and reasonable belief as
to the best interests of the Trust, had been adjudicated, it would have been
adjudicated in favor of such person. The rights accruing to any person under
these provisions shall not exclude any other right to which he may be lawfully
entitled; provided that no Person may satisfy any right of indemnity or
reimbursement granted herein or in Section 5.1 or to which he may be otherwise
entitled except out of the property of the Trust, and no Shareholder shall be
personally liable to any person with respect to any claim for indemnity or
reimbursement or otherwise. The Trustees may make advance payments in connection
with indemnification under this Section 5.3, provided that the indemnified
person shall have given a written undertaking to reimburse the Trust in the
event it is subsequently determined that he is not entitled to such
indemnification."

The Registrant's by-laws provide that insofar as the conditional advancing
of indemnification moneys pursuant to Section 5.3 of the Declaration of Trust
for actions based upon the Investment Company Act of 1940, as amended (the
"Investment Company Act") may be concerned, such payments will be made only on
the following conditions: (i) the advances must be limited to amounts used, or
to be used, for the preparation or presentation of a defense to the action,
including costs connected with the preparation of a settlement; (ii) advances
may be made only upon receipt of a written promise by, or on behalf of, the
recipient to repay that amount of the advance which exceeds the amount which it
is ultimately determined that he is entitled to receive from the Registrant by
reason of indemnification; and (iii) (a) such promise must be secured by a
surety bond, other suitable insurance or an equivalent form of security which
assures that any repayments may be obtained by the Registrant without delay or
litigation, which bond, insurance or other form of security must be provided by
the recipient of the advance, or (b) a majority of a quorum of the Registrant's
disinterested, non-party Trustees, or an independent legal counsel in a written
opinion, shall determine, based upon a review of readily available facts, that
the recipient of the advance ultimately will be found entitled to
indemnification.

In Section 9 of the Distribution Agreement relating to the securities being
offered hereby, the Registrant agrees to indemnify the Distributor and each
person, if any, who controls the Distributor within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), against certain types
of civil liabilities arising in connection with the Registration Statement or
Prospectus.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to Trustees, officers and controlling persons of the Registrant
and the principal underwriter pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a Trustee, officer, or
controlling person of the Registrant and the principal underwriter in connection
with the successful defense of any action, suit or proceeding) is asserted by
such Trustee, officer or controlling person or the principal underwriter in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

Merrill Lynch Asset Management, L.P. ("MLAM" or the "Manager"), acts as the
investment adviser for the following open-end registered investment companies:
Merrill Lynch Adjustable Rate Securities Fund, Inc., Merrill Lynch Americas
Income Fund, Inc., Merrill Lynch Asset Builder Program, Inc., Merrill Lynch
Asset Growth Fund, Inc., Merrill Lynch Asset Income Fund, Inc., Merrill Lynch
Capital Fund, Inc., Merrill Lynch Convertible Fund, Inc., Merrill Lynch
Developing Capital Markets Fund, Inc., Merrill Lynch Dragon

C-2
<PAGE> 51

Fund, Inc., Merrill Lynch EuroFund, Merrill Lynch Fundamental Growth Fund, Inc.,
Merrill Lynch Global Allocation Fund, Inc., Merrill Lynch Global Bond Fund for
Investment and Retirement, Merrill Lynch Global Growth Fund, Inc., Merrill Lynch
Global Holdings, Inc., Merrill Lynch Global Resources Trust, Merrill Lynch
Global SmallCap Fund, Inc., Merrill Lynch Global Technology Fund, Inc., Merrill
Lynch Global Utility Fund, Inc., Merrill Lynch Global Value Fund, Inc., Merrill
Lynch Growth Fund, Merrill Lynch Healthcare Fund, Inc., Merrill Lynch
Intermediate Government Bond Fund, Merrill Lynch International Equity Fund,
Merrill Lynch Latin America Fund, Inc., Merrill Lynch Middle East/Africa Fund,
Inc., Merrill Lynch Municipal Series Trust, Merrill Lynch Pacific Fund, Inc.,
Merrill Lynch Ready Assets Trust, Merrill Lynch Real Estate Fund, Inc., Merrill
Lynch Retirement Series Trust, Merrill Lynch Series Fund, Inc., Merrill Lynch
Short-Term Global Income Fund, Inc., Merrill Lynch Strategic Dividend Fund,
Merrill Lynch Technology Fund, Inc., Merrill Lynch U.S. Treasury Money Fund,
Merrill Lynch U.S.A. Government Reserves, Merrill Lynch Utility Income Fund,
Inc., Merrill Lynch Variable Series Funds, Inc. and Hotchkis and Wiley Funds
(advised by Hotchkis and Wiley, a division of MLAM); and for the following
closed-end registered investment companies: Merrill Lynch High Income Municipal
Bond Fund, Inc. and Merrill Lynch Senior Floating Rate Fund, Inc. MLAM also acts
as sub-adviser to Merrill Lynch World Strategy Portfolio and Merrill Lynch Basic
Value Equity Portfolio, two investment portfolios of EQ Advisory Trust.

Fund Asset Management, L.P. ("FAM"), an affiliate of the Manager, acts as
the investment adviser for the following open-end registered investment
companies: CBA Money Fund, CMA Government Securities Fund, CMA Money Fund, CMA
Multi-State Municipal Series Trust, CMA Tax-Exempt Fund, CMA Treasury Fund, The
Corporate Fund Accumulation Program, Inc., Financial Institutions Series Trust,
Merrill Lynch Basic Value Fund, Inc., Merrill Lynch California Municipal Series
Trust, Merrill Lynch Corporate Bond Fund, Inc., Merrill Lynch Corporate High
Yield Fund, Inc., Merrill Lynch Emerging Tigers Fund, Inc., Merrill Lynch
Federal Securities Trust, Merrill Lynch Funds for Institutions Series, Merrill
Lynch Multi-State Limited Maturity Municipal Series Trust, Merrill Lynch
Multi-State Municipal Series Trust, Merrill Lynch Municipal Bond Fund, Inc.,
Merrill Lynch Phoenix Fund, Inc., Merrill Lynch Special Value Fund, Inc.,
Merrill Lynch World Income Fund, Inc., and The Municipal Fund Accumulation
Program, Inc.; and for the following closed-end registered investment companies:
Apex Municipal Fund, Inc., Corporate High Yield Fund, Inc., Corporate High Yield
Fund II, Inc., Corporate High Yield Fund III, Inc., Debt Strategies Fund, Inc.,
Debt Strategies Fund II, Inc., Debt Strategies Fund III, Inc., Income
Opportunities Fund 1999, Inc., Income Opportunities Fund 2000, Inc., Merrill
Lynch Municipal Strategy Fund, Inc., MuniAssets Fund, Inc., MuniEnhanced Fund,
Inc., MuniHoldings Fund, Inc., MuniHoldings Fund II, Inc., MuniHoldings
California Insured Fund, Inc., MuniHoldings California Insured Fund II, Inc.,
MuniHoldings California Insured Fund III, Inc., MuniHoldings California Insured
Fund IV, Inc., MuniHoldings Florida Insured Fund, MuniHoldings Florida Insured
Fund II, MuniHoldings Florida Insured Fund III, MuniHoldings Florida Insured
Fund IV, MuniHoldings Insured Fund, Inc., MuniHoldings Insured Fund II, Inc.,
MuniHoldings Michigan Insured Fund, Inc., MuniHoldings New Jersey Insured Fund,
Inc., MuniHoldings New Jersey Insured Fund II, Inc., MuniHoldings New Jersey
Insured Fund III, Inc., MuniHoldings New York Fund, Inc., MuniHoldings New York
Insured Fund, Inc., MuniHoldings New York Insured Fund II, Inc., MuniHoldings
New York Insured Fund III, Inc., MuniHoldings Pennsylvania Insured Fund,
MuniInsured Fund, Inc., MuniVest Fund, Inc., MuniVest Fund II, Inc., MuniVest
Florida Fund, MuniVest Michigan Insured Fund, Inc., MuniVest New Jersey Fund,
Inc., MuniVest Pennsylvania Insured Fund, MuniYield Arizona Fund, Inc.,
MuniYield California Fund, Inc., MuniYield California Insured Fund, Inc.,
MuniYield California Insured Fund II, Inc., MuniYield Florida Fund, MuniYield
Florida Insured Fund, MuniYield Fund, Inc., MuniYield Insured Fund, Inc.,
MuniYield Michigan Fund, Inc., MuniYield Michigan Insured Fund, Inc., MuniYield
New Jersey Fund, Inc., MuniYield New Jersey Insured Fund, Inc., MuniYield New
York Insured Fund, Inc., MuniYield New York Insured Fund II, Inc., MuniYield
Pennsylvania Fund, MuniYield Quality Fund, Inc., MuniYield Quality Fund II,
Inc., Senior High Income Portfolio, Inc. and Worldwide DollarVest Fund, Inc.

The address of each of these registered investment companies is P.O. Box
9011, Princeton, New Jersey 08543-9011, except that the address of Merrill Lynch
Funds for Institutions Series and Merrill Lynch Intermediate Government Bond
Fund is One Financial Center, 23rd Floor, Boston, Massachusetts 02111-2665. The
address of the Manager, FAM, Princeton Services, Inc. ("Princeton Services") and

C-3
<PAGE> 52

Princeton Administrators, L.P. ("Princeton Administrators") is also P.O. Box
9011, Princeton, New Jersey 08543-9011. The address of Princeton Funds
Distributor, Inc. ("PFD") and of Merrill Lynch Funds Distributor ("MLFD") is
P.O. Box 9081, Princeton, New Jersey 08543-9081. The address of Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Merrill Lynch & Co.,
Inc. ("ML & Co.") is World Financial Center, North Tower, 250 Vesey Street, New
York, New York 10281-1201. The address of the Fund's transfer agent, Financial
Data Services, Inc. ("FDS"), is 4800 Deer Lake Drive East, Jacksonville, Florida
32246-6484.

Set forth below is a list of each executive officer and partner of the
Manager indicating each business, profession, vocation or employment of a
substantial nature in which each such person or entity has been engaged since
October 1, 1996 for his, her or its own account or in the capacity of director,
officer, partner or trustee. In addition, Mr. Glenn is President and Mr. Burke
is Vice President and Treasurer of substantially all of the investment companies
described in the first two paragraphs of this Item 26, and Messrs. Giordano and
Monagle are officers of one or more of such companies.

<TABLE>
<CAPTION>
POSITION(S) WITH OTHER SUBSTANTIAL BUSINESS,
NAME MANAGER PROFESSION, VOCATION OR EMPLOYMENT
---- ---------------- ----------------------------------
<S> <C> <C>
ML & Co. ............................ Limited Partner Financial Services Holding Company;
Limited Partner of FAM
Princeton Services................... General Partner General Partner of FAM
Jeffrey M. Peek...................... President President of FAM; President and
Director of Princeton Services;
Executive Vice President of ML &
Co.; Managing Director and Co-Head
of the Investment Banking Division
of Merrill Lynch in 1997; Senior
Vice President and Director of the
Global Securities and Economics
Division of Merrill Lynch from 1995
to 1997
Terry K. Glenn....................... Executive Vice President Executive Vice President of FAM;
Executive Vice President and
Director of Princeton Services;
President and Director of PFD;
Director of FDS; President of
Princeton Administrators
Donald C. Burke...................... Senior Vice President, Senior Vice President and Treasurer of
Treasurer and Director FAM; Senior Vice President and
of Taxation Treasurer of Princeton Services;
Vice President of PFD; First Vice
President of MLAM from 1997 to 1999;
Vice President of MLAM from 1990 to
1997
Michael G. Clark..................... Senior Vice President Senior Vice President of FAM; Senior
Vice President of Princeton
Services; Director and Treasurer of
PFD; First Vice President of MLAM
from 1997 to 1999; Vice President of
MLAM from 1996 to 1997
Mark A. Desario...................... Senior Vice President Senior Vice President of FAM; Senior
Vice President of Princeton Services
Linda L. Federici.................... Senior Vice President Senior Vice President of FAM; Senior
Vice President of Princeton Services
Vincent R. Giordano.................. Senior Vice President Senior Vice President of FAM; Senior
Vice President of Princeton Services
Michael J. Hennewinkel............... Senior Vice President, Senior Vice President, Secretary and
Secretary and General General Counsel of FAM; Senior Vice
Counsel President of Princeton Services
</TABLE>

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<PAGE> 53

<TABLE>
<CAPTION>
POSITION(S) WITH OTHER SUBSTANTIAL BUSINESS,
NAME MANAGER PROFESSION, VOCATION OR EMPLOYMENT
---- ---------------- ----------------------------------
<S> <C> <C>
Philip L. Kirstein................... Senior Vice President Senior Vice President of FAM; Senior
Vice President, General Counsel,
Director and Secretary of Princeton
Services
Ronald M. Kloss...................... Senior Vice President Senior Vice President of FAM; Senior
Vice President of Princeton Services
Debra W. Landsman-Yaros.............. Senior Vice President Senior Vice President of FAM; Senior
Vice President of Princeton
Services; Vice President of PFD
Stephen M. M. Miller................. Senior Vice President Executive Vice President of Princeton
Administrators; Senior Vice
President of Princeton Services
Joseph T. Monagle, Jr. .............. Senior Vice President Senior Vice President of FAM; Senior
Vice President of Princeton Services
Brian A. Murdock..................... Senior Vice President Senior Vice President of FAM; Senior
Vice President of Princeton Services
Gregory D. Upah...................... Senior Vice President Senior Vice President of FAM; Senior
Vice President of Princeton Services
</TABLE>

ITEM 27. PRINCIPAL UNDERWRITERS.

(a) MLFD, a division of PFD, acts as the principal underwriter for the
Registrant and for each of the open-end registered investment companies referred
to in the first two paragraphs of Item 26 except CBA Money Fund, CMA Government
Securities Fund, CMA Money Fund, CMA Multi-State Municipal Series Trust, CMA
Tax-Exempt Fund, CMA Treasury Fund, The Corporate Fund Accumulation Program,
Inc. and The Municipal Fund Accumulation Program, Inc. MLFD also acts as the
principal underwriter for the following closed-end registered investment
companies: Merrill Lynch High Income Municipal Bond Fund, Inc., Merrill Lynch
Municipal Strategy Fund, Inc. and Merrill Lynch Senior Floating Rate Fund, Inc.
A separate division of PFD acts as the principal underwriter of a number of
other investment companies.

(b) Set forth below is information concerning each director and officer of
PFD. The principal business address of each such person is P.O. Box 9081,
Princeton, New Jersey 08543-9081, except that the address of Messrs. Breen,
Crook, Fatseas and Wasel is One Financial Center, 23rd Floor, Boston,
Massachusetts 02111-2665.

<TABLE>
<CAPTION>
POSITION(S) AND OFFICE(S) POSITION(S) AND OFFICE(S)
NAME WITH PFD WITH REGISTRANT
---- ---------------------------- ----------------------------
<S> <C> <C>
Terry K. Glenn....................... President and Director President and Trustee
Michael G. Clark..................... Treasurer and Director None
Thomas J. Verage..................... Director None
Robert W. Crook...................... Senior Vice President None
Michael J. Brady..................... Vice President None
Donald C. Burke...................... Vice President Vice President and Treasurer
William M. Breen..................... Vice President None
James T. Fatseas..................... Vice President None
Debra W. Landsman-Yaros.............. Vice President None
Michelle T. Lau...................... Vice President None
Salvatore Venezia.................... Vice President None
William Wasel........................ Vice President None
Robert Harris........................ Secretary None
</TABLE>

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act and the rules thereunder are
maintained at the offices of the Registrant (800 Scudders Mill

C-5
<PAGE> 54

Road, Plainsboro, New Jersey 08536), and its transfer agent, Financial Data
Services, Inc. (4800 Deer Lake Drive East, Jacksonville, Florida 32246-6484).

ITEM 29. MANAGEMENT SERVICES.

Other than as set forth under the caption "Management of the Trust--Merrill
Lynch Asset Management" in the Prospectus constituting Part A of the
Registration Statement and under "Management of the Trust--Management and
Advisory Arrangements" in the Statement of Additional Information constituting
Part B of the Registration Statement, the Registrant is not a party to any
management-related service contract.

ITEM 30. UNDERTAKINGS.

Not applicable.

C-6
<PAGE> 55

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to its Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
Township of Plainsboro, and the State of New Jersey, on the 26th day of April,
1999.

Merrill Lynch Ready Assets Trust
(Registrant)

By: /s/ TERRY K. GLENN

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

(TERRY K. GLENN, PRESIDENT)

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date(s) indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ TERRY K. GLENN President and Trustee
- --------------------------------------------------- (Principal Executive
(TERRY K. GLENN) Officer)

DONALD C. BURKE* Treasurer (Principal
- --------------------------------------------------- Financial and Accounting
(DONALD C. BURKE) Officer)

DONALD CECIL* Trustee
- ---------------------------------------------------
(DONALD CECIL)

M. COLYER CRUM* Trustee
- ---------------------------------------------------
(M. COLYER CRUM)

EDWARD H. MEYER* Trustee
- ---------------------------------------------------
(EDWARD H. MEYER)

JACK B. SUNDERLAND* Trustee
- ---------------------------------------------------
(JACK B. SUNDERLAND)

J. THOMAS TOUCHTON* Trustee
- ---------------------------------------------------
(J. THOMAS TOUCHTON)

FRED G. WEISS* Trustee
- ---------------------------------------------------
(FRED G. WEISS)

ARTHUR ZEIKEL* Trustee
- ---------------------------------------------------
(ARTHUR ZEIKEL)

* By: /s/ TERRY K. GLENN April 26, 1999
- ---------------------------------------------------
TERRY K. GLENN (ATTORNEY-IN-FACT)
</TABLE>

C-7
<PAGE> 56

POWER OF ATTORNEY

The undersigned, the Directors/Trustees and the Officers of each of the
registered investment companies listed below, hereby authorize Terry K. Glenn,
Donald C. Burke and Joseph T. Monagle, Jr. or any of them, as attorney-in-fact,
to sign on his behalf in the capacities indicated any Registration Statement or
amendment thereto (including post-effective amendments) for each of the
following registered investment companies and to file the same, with all
exhibits thereto, with the Securities and Exchange Commission: Merrill Lynch
Basic Value Fund, Inc.; Merrill Lynch Capital Fund, Inc.; Merrill Lynch Global
Resources Trust; Merrill Lynch Global Growth Fund, Inc.; Merrill Lynch Special
Value Fund, Inc.; Merrill Lynch Ready Assets Trust; Merrill Lynch U.S.A.
Government Reserves; Merrill Lynch U.S. Treasury Money Fund; MuniVest Florida
Fund; MuniVest Michigan Insured Fund, Inc.; MuniVest New Jersey Fund, Inc.;
MuniYield Florida Insured Fund; MuniYield Pennsylvania Fund; MuniYield New
Jersey Insured Fund, Inc.; MuniYield Michigan Insured Fund, Inc.

Dated: April 25, 1999

/s/ TERRY K. GLENN /s/ DONALD C. BURKE
--------------------------------------------------- ---------------------------------------------------
Terry K. Glenn Donald C. Burke
(President/Principal Executive (Vice President/Treasurer/Principal Financial and
Officer/Director/Trustee) Accounting Officer)

/s/ DONALD CECIL /s/ M. COLYER CRUM
--------------------------------------------------- ---------------------------------------------------
Donald Cecil M. Colyer Crum
(Director/Trustee) (Director/Trustee)

/s/ EDWARD H. MEYER /s/ JACK B. SUNDERLAND
--------------------------------------------------- ---------------------------------------------------
Edward H. Meyer Jack B. Sunderland
(Director/Trustee) (Director/Trustee)

/s/ J. THOMAS TOUCHTON /s/ ARTHUR ZEIKEL
--------------------------------------------------- ---------------------------------------------------
J. Thomas Touchton Arthur Zeikel
(Director/Trustee) (Director/Trustee)

/s/ FRED G. WEISS
---------------------------------------------------
Fred G. Weiss
(Director/Trustee)
</TABLE>

C-8
<PAGE> 57

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
9 -- Opinion and Consent of Brown & Wood LLP, Counsel to the
Registrant.
10 -- Consent of Deloitte & Touche LLP, independent auditors
for the Registrant.
</TABLE>

C-9

<PAGE> 1

BROWN & WOOD LLP
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048-0557

TELEPHONE: 212-839-5300
FACSIMILE: 212-839-5599

April 26, 1999

Merrill Lynch Ready Assets Trust
800 Scudders Mill Road
Plainsboro, NJ 08536

Ladies and Gentlemen:

We have acted as counsel for Merrill Lynch Ready Assets Trust, a business
Trust organized under the laws of the Commonwealth of Massachusetts (the
"Trust"), in connection with the registration of an indefinite number of shares
of beneficial interest, par value $0.10 per share, of the Trust (the "Shares")
under the Securities Act of 1933, as amended, pursuant to the Trust's
registration statement on Form N-1A (File No. 2-52711), as amended (the
"Registration Statement").

As counsel for the Trust, we are familiar with the proceedings taken by it
in connection with the authorization, issuance and sale of the Shares. In
addition, we have examined and are familiar with the Declaration of Trust of the
Trust, the By-Laws of the Trust and such other documents as we have deemed
relevant to the matters referred to in this opinion.

In rendering this opinion, we have relied as to matters of Massachusetts
law upon an opinion of Bingham Dana LLP rendered to the Trust.

Based upon the foregoing, we are of the opinion that the Shares, upon
issuance and sale in the manner referred to in the Registration Statement for
consideration not less than the par value thereof, will be legally issued, fully
paid and non-assessable shares of beneficial interest, except that Shareholders
of the Trust may under certain circumstances be held personally liable for the
Trust's obligations.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus and
Statement of Additional Information constituting parts thereof.

Very truly yours,
/s/ BROWN & WOOD LLP

<PAGE> 1

INDEPENDENT AUDITORS' CONSENT

Merrill Lynch Ready Assets Trust:

We consent to the incorporation by reference in this Post-Effective Amendment
No. 34 to Registration Statement No. 2-52711 of our report dated February 10,
1999 appearing in the annual report to shareholders of Merrill Lynch Ready
Assets Trust for the year ended December 31, 1998, and to the reference to us
under the caption "Financial Highlights" in the Prospectus, which is a part of
such Registration Statement.

/s/ DELOITTE & TOUCHE LLP

Deloitte & Touche LLP
Princeton, New Jersey
April 23, 1999