MONEY MARKET MANAGEMENT, N-30D, 1996-03-01

MONEY MARKET MANAGEMENT
N-30D, 1996-03-01

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MONEY MARKET MANAGEMENT, INC.
PROSPECTUS

The shares of Money Market Management, Inc. (the "Company") offered by this
prospectus represent interests in an open-end, diversified management investment
company (a mutual fund). The Company invests in short-term money market
securities to achieve current income consistent with stability of principal.

THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK AND ARE NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE
COMPANY ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE
CAN BE NO ASSURANCE THAT THE COMPANY WILL BE ABLE TO DO SO.

This prospectus contains the information you should read and know before you
invest in the Company. Keep this prospectus for future reference.

The Company has also filed a Statement of Additional Information dated February
29, 1996, with the Securities and Exchange Commission. The information contained
in the Statement of Additional Information is incorporated by reference into
this prospectus. You may request a copy of the Statement of Additional
Information or a paper copy of this prospectus, if you have received your
prospectus electronically, free of charge by calling 1-800-235-4669. To obtain
other information, or make inquiries about the Company, contact your financial
institution.

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

Prospectus dated February 29, 1996

TABLE OF CONTENTS
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SUMMARY OF FUND EXPENSES 1
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FINANCIAL HIGHLIGHTS 2
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GENERAL INFORMATION 3
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INVESTMENT INFORMATION 3
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Investment Objective 3
Investment Policies 3
Investment Risks 6
Investment Limitations 6

COMPANY INFORMATION 6
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Management of the Company 6
Distribution of Shares 8
Administration of the Company 8

NET ASSET VALUE 8
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HOW TO PURCHASE SHARES 9
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Special Purchase Features 10

EXCHANGE PRIVILEGE 11
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HOW TO REDEEM SHARES 12
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Special Redemption Features 13

ACCOUNT AND SHARE INFORMATION 13
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TAX INFORMATION 14
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Federal Income Tax 14
State and Local Taxes 14

PERFORMANCE INFORMATION 15
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FINANCIAL STATEMENTS 16
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INDEPENDENT AUDITOR'S REPORT 26
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ADDRESSES 27
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SUMMARY OF FUND EXPENSES
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<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price)......... None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)................................................. None
Contingent Deferred Sales Charge* (as a percentage of original
purchase price or redemption proceeds, as applicable)............................... None
Redemption Fee (as a percentage of amount redeemed, if applicable).................... None
Exchange Fee.......................................................................... None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee........................................................................ 0.50%
12b-1 Fee............................................................................. None
Total Other Expenses.................................................................. 0.58%
Shareholder Services Fee (after waiver)(1)................................. 0.10%
Total Operating Expenses(2)...................................................... 1.08%
</TABLE>

(1) The maximum shareholder services fee is 0.25%.

(2) The total operating expenses would have been 1.23% absent the voluntary
waiver of a portion of the shareholder services fee.

* A contingent deferred sales charge of 1% will be imposed only under certain
limited circumstances in which Fund shares being redeemed were acquired in
exchange for Class F Shares of another Federated Fund.

The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Fund will bear, either
directly or indirectly. For more complete descriptions of the various costs and
expenses, see "Redeeming Shares" and "Fund Information". Wire-transferred
redemptions of less than $5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period............. $ 11 $34 $60 $132
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

MONEY MARKET MANAGEMENT, INC.
FINANCIAL HIGHLIGHTS
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(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
- -----------
INCOME FROM
INVESTMENT
OPERATIONS
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Net
investment
income 0.05 0.03 0.02 0.03 0.05 0.07 0.08 0.07 0.06 0.06
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LESS
DISTRIBUTIONS
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Distributions
from net
investment
income (0.05) (0.03) (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.06) (0.06)
- ----------- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
NET ASSET
VALUE,
END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL
RETURN(A) 5.13% 3.31% 2.19% 2.86% 5.43% 7.65% 8.73% 7.03% 6.08% 6.28%
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RATIOS TO
AVERAGE
NET ASSETS
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Expenses 1.08% 1.14% 1.17% 1.11% 0.96% 0.89% 0.89% 0.91% 0.89% 0.84%
- -----------
Net
investment
income 4.99% 3.27% 2.15% 2.85% 5.32% 7.38% 8.39% 6.81% 5.88% 6.12%
- -----------
Expense
waiver/
reimbursement(b) 0.15% 0.00% 0.07% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- -----------
SUPPLEMENTAL
DATA
- -----------
Net
assets,
end of
period
(000
omitted) $101,390 $114,588 $108,309 $127,711 $168,889 $194,836 $204,393 $188,239 $178,813 $205,723
- -----------
</TABLE>

(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

(See Notes which are an integral part of the Financial Statements)

GENERAL INFORMATION
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The Company was established as a Maryland corporation on October 30, 1973, and
was one of the first money market funds. The Company was reorganized as a
Massachusetts business trust on June 29, 1982, and then re-established as a
Maryland corporation under Articles of Incorporation dated August 19, 1992. The
Company is designed for investors with temporary cash balances and investors
with cash reserves as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio investing in short-term money
market securities. A minimum initial investment of $500 is required except for
retirement plans.

The Company attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price. However, a contingent deferred sales
charge may be imposed under certain circumstances.

INVESTMENT INFORMATION
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INVESTMENT OBJECTIVE
The investment objective of the Company is current income consistent with
stability of principal. While there is no assurance that the Company will
achieve its investment objective, it endeavors to do so by complying with the
various requirements of Rule 2a-7 under the Investment Company Act of 1940 which
regulates money market mutual funds and by following the investment policies
described in this prospectus. The investment objective and the policies and
limitations described below, unless indicated otherwise, cannot be changed
without shareholder approval.

INVESTMENT POLICIES

The Company pursues its investment objective by investing in a portfolio of
money market securities maturing in 13 months or less. As a matter of operating
policy which can be changed without shareholder approval, the average maturity
of the securities in the Company's portfolio, computed on a dollar-weighted
basis, will be 90 days or less.

ACCEPTABLE INVESTMENTS. The Company invests in high quality money market
instruments that are either rated in one of the two highest short-term rating
categories by one or more nationally recognized statistical rating organizations
("NRSRO's") or are of comparable quality to securities having such ratings.
Examples of these instruments include, but are not limited to:

- domestic issues of corporate debt obligations, including variable rate
demand notes;

- commercial paper (including Canadian Commercial Paper and Europaper);

- certificates of deposit, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");

- short-term credit facilities;

- asset-backed securities;

- obligations issued or guaranteed as to payment of principal and interest
by the U.S. government or one of its agencies or instrumentalities; and

- other money market instruments.

The Company invests only in instruments denominated and payable in U.S. dollars.

VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide the
Company with the right to tender the security for repurchase at its stated
principal amount plus accrued interest. Such securities typically bear interest
at a rate that is intended to cause the securities to trade at par. The interest
rate may float or be adjusted at regular intervals (ranging from daily to
annually), and is normally based on a published interest rate or interest rate
index. Most variable rate demand notes allow the Company to demand the
repurchase of the security on not more than seven days prior notice. Other notes
only permit the Company to tender the security at the time of each interest rate
adjustment or at other fixed intervals. See "Demand Features." The Company
treats variable rate demand notes as maturing on the later of the date of the
next interest rate adjustment or the date on which the Company may next tender
the security for repurchase.

BANK INSTRUMENTS. The Company only invests in Bank Instruments either issued by
an institution having capital, surplus and undivided profits over $100 million,
or insured by the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF"). Bank Instruments may include Eurodollar Certificates of
Deposit ("ECDs"), Yankee Certificates of Deposit ("Yankee CDs") and Eurodollar
Time Deposits ("ETDs"). The Company will treat securities credit enhanced with a
bank's letter of credit as Bank Instruments.

ASSET-BACKED SECURITIES. Asset-backed securities are securities issued by
special purpose entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may take the form of beneficial interests in
special purpose trusts, limited partnership interests, or commercial paper or
other debt securities issued by a special purpose corporation. Although the
securities often have some form of credit or liquidity enhancement, payments on
the securities depend predominantly upon collections of the loans and
receivables held by the issuer.

SHORT-TERM CREDIT FACILITIES. The Company may enter into, or acquire
participations in, short-term borrowing arrangements with corporations,
consisting of either a short-term revolving credit facility or a master note
agreement payable upon demand. Under these arrangements, the borrower may
reborrow funds during the term of the facility. The Company treats any
commitments to provide such advances as a standby commitment to purchase the
borrower's notes.

REPURCHASE AGREEMENTS. Certain securities in which the Company invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell securities to the Company and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that the
seller does not repurchase the securities from the Company, the Company could
receive less than the repurchase price on any sale of such securities.

CREDIT ENHANCEMENT. Certain of the Company's acceptable investments may be
credit-enhanced by a guaranty, letter of credit, or insurance. Any bankruptcy,
receivership, or default of the party providing the credit enhancement will
adversely affect the quality and marketability of the underlying security.

DEMAND FEATURES. The Company may acquire securities that are subject to puts
and standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Company. The demand feature may be issued
by the issuer of the underlying securities, a dealer in the securities, or by
another third party, and may not be transferred separately from the underlying
security. The Company uses these arrangements to provide the Company with
liquidity and not to protect against changes in the market value of the
underlying securities. The bankruptcy, receivership, or default by the issuer of
the demand feature, or a default on the underlying security or other event that
terminates the demand feature before its exercise, will adversely affect the
liquidity of the underlying security. Demand features that are exercisable even
after a payment default on the underlying security may be treated as a form of
credit enhancement.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Company may purchase
securities on a when-issued or delayed delivery basis. These transactions are
arrangements in which the Company purchases securities with payment and delivery
scheduled for a future time. The seller's failure to complete these transactions
may cause the Company to miss a price or yield considered to be advantageous.
Settlement dates may be a month or more after entering into these transactions,
and the market values of the securities purchased may vary from the purchase
prices. Accordingly, the Company may pay more or less than the market value of
the securities on the settlement date.

The Company may dispose of a commitment prior to settlement if the adviser deems
it appropriate to do so. In addition, the Company may enter into transactions to
sell its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Company may realize short-term profits or losses upon the sale of
such commitments.

RESTRICTED AND ILLIQUID SECURITIES. The Company may invest in restricted
securities. Restricted securities are any securities in which the Company may
invest pursuant to its investment objective and policies but which are subject
to restrictions on resale under federal securities law. However, the Company
will limit investments in illiquid securities, including certain restricted
securities not determined by the Directors to be liquid, non-negotiable time
deposits, and repurchase agreements providing for settlement in more than seven
days after notice, to 10% of its net assets.

The Company may invest in commercial paper issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933.
Section 4(2) commercial paper is restricted as to disposition under federal
securities law, and is generally sold to institutional investors, such as the
Company, who agree that they are purchasing the paper for investment purposes
and not with a view to public distribution. Any resale by the purchaser must be
in an exempt transaction. Section 4(2) commercial paper is normally resold to
other institutional investors like the Company through or with the assistance of
the issuer or investment dealers who make a market in Section 4(2) commercial
paper, thus providing liquidity. The Company believes that Section 4(2)
commercial paper and possibly certain other restricted securities which meet the
criteria for liquidity established by the Directors of the

Company are quite liquid. The Company intends, therefore, to treat the
restricted securities which meet the criteria for liquidity established by the
Directors, including Section 4(2) commercial paper, as determined by the
Company's investment adviser, as liquid and not subject to the investment
limitation applicable to illiquid securities. In addition, because Section 4(2)
commercial paper is liquid, the Company intends to not subject such paper to the
limitation applicable to restricted securities.

INVESTMENT RISKS

ECDs, ETDs, Yankee CDs, Canadian Commercial Paper, and Europaper are subject to
different risks than domestic obligations of domestic banks or corporations.
Examples of these risks include international economic and political
developments, foreign governmental restrictions that may adversely affect the
payment of principal or interest, foreign withholding or other taxes on interest
income, difficulties in obtaining or enforcing a judgment against the issuing
entity, and the possible impact of interruptions in the flow of international
currency transactions. Risks may also exist for ECDs, ETDs, and Yankee CDs
because the banks issuing these instruments, or their domestic or foreign
branches, are not necessarily subject to the same regulatory requirements that
apply to domestic banks, such as reserve requirements, loan limitations,
examinations, accounting, auditing, recordkeeping, and the public availability
of information. These factors will be carefully considered by the Company's
adviser in selecting investments for the Company.

INVESTMENT LIMITATIONS

The Company will not borrow money directly or through reverse repurchase
agreements (arrangements in which the Company sells a money market instrument
for a percentage of its cash value with an agreement to buy it back on a set
date) or pledge securities except, under certain circumstances, the Company may
borrow up to one-third of the value of its total assets and pledge up to 10% of
the value of those assets to secure such borrowings. These investment
limitations cannot be changed without shareholder approval.

COMPANY INFORMATION
- --------------------------------------------------------------------------------

MANAGEMENT OF THE COMPANY

BOARD OF DIRECTORS. The Company is managed by a Board of Directors. The
Directors are responsible for managing the Company's business affairs and for
exercising all the Company's powers except those reserved for the shareholders.
An Executive Committee of the Board of Directors handles the Board's
responsibilities between meetings of the Board.

INVESTMENT ADVISER. Investment decisions for the Company are made by Federated
Advisers, the Company's investment adviser, subject to direction by the
Directors. The adviser continually conducts investment research and supervision
for the Company and is responsible for the purchase and sale of portfolio
instruments.

ADVISORY FEES. The adviser receives an annual investment advisory fee based on
the Company's average net assets as shown in the chart below:
<TABLE>
<CAPTION>
ADVISORY FEE AS %
AVERAGE DAILY NET ASSETS OF AVERAGE DAILY NET ASSETS
- ------------------------------ ----------------------------
<S> <C>
First $500 million .50 of 1%
Second $500 million .475 of 1%
Third $500 million .45 of 1%
Fourth $500 million .425 of 1%
Over $2 billion .40 of 1%
</TABLE>

The adviser has undertaken to reimburse the Company up to the amount of the
advisory fee for operating expenses in excess of limitations established by
certain states. The adviser also may voluntarily choose to waive a portion
of its fee or reimburse other expenses of the Company, but reserves the
right to terminate such waiver or reimbursement at any time at its sole
discretion.

ADVISER'S BACKGROUND. Federated Advisers, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.

Federated Advisers and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. With over $80 billion invested across
more than 250 funds under management and/or administration by its
subsidiaries, as of December 31, 1995, Federated Investors is one of the
largest mutual fund investment managers in the United States. With more
than 1,800 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000
investment professionals have selected Federated funds for their clients.

Both the Company and the adviser have adopted strict codes of ethics
governing the conduct of all employees who manage the Company and its
portfolio securities. These codes recognize that such persons owe a
fiduciary duty to the Company's shareholders and must place the interests
of shareholders ahead of the employees' own interests. Among other things,
the codes: require preclearance and periodic reporting of personal
securities transactions; prohibit personal transactions in securities being
purchased or sold, or being considered for purchase or sale, by the
Company; prohibit purchasing securities in initial public offerings; and
prohibit taking profits on securities held for less than sixty days.
Violations of the codes are subject to review by the Directors, and could
result in severe penalties.

DISTRIBUTION OF SHARES

Federated Securities Corp. is the principal distributor for shares of the
Company. It is a Pennsylvania corporation organized on November 14, 1969, and is
the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.

State securities laws may require certain financial institutions such as
depository institutions to register as dealers.

SHAREHOLDER SERVICES. The Company has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Company may make payments up to .25 of 1% of the
average daily net asset value of the Company, computed at an annual rate, to
obtain personal services for shareholders and to provide the maintenance of
shareholder accounts. From time to time and for such periods as deemed
appropriate, the amount stated above may be reduced voluntarily.

Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions to perform shareholder services. Financial institutions will
receive fees based upon shares owned by their clients or customers. The
schedules of such fees and the basis upon which such fees will be paid will be
determined from time to time by the Company and Federated Shareholder Services.

ADMINISTRATION OF THE COMPANY

ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the
Company. Federated Administrative Services provides these at an annual rate as
specified below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE
MAXIMUM FEE DAILY NET ASSETS
- --------------------- ------------------------------------
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>

The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.

NET ASSET VALUE
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The Company attempts to stabilize the net asset value of its shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net asset
value per share is determined by subtracting total liabilities from total assets
and dividing the remainder by the number of shares outstanding. The Company
cannot guarantee that its net asset value will always remain at $1.00 per share.

The net asset value is determined at 12:00 noon, (Eastern time), and as of the
close of trading (normally 4:00 p.m., Eastern time) on the New York Stock
Exchange, Monday through Friday, except on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.

HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------

Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days which the New York Stock Exchange
is open for business. Shares may be purchased as described below, either through
a financial institution (such as a bank or broker/dealer) or by wire or by check
directly from the Company, with a minimum initial investment of $500 or more or
additional investments of as little as $100. The minimum subsequent investment
for retirement plans is only $50. Financial institutions may impose different
minimum investment requirements on their customers.

In connection with any sale, Federated Securities Corp. may from time to time
offer certain items of nominal value to any shareholder or investor. The Company
reserves the right to reject any purchase request. An account must be
established at a financial institution or by completing, signing, and returning
the new account form available from the Company before shares can be purchased.

The financial institution which maintains investor accounts with the Company
must do so on a fully disclosed basis unless it accounts for share ownership
periods used in calculating the contingent deferred sales charge (see
"Contingent Deferred Sales Charge"). In addition, advance payments made to
financial institutions may be subject to reclaim by the distributor for accounts
transferred to financial institutions which do not maintain investor accounts on
a fully disclosed basis and do not account for share ownership periods.

PURCHASING SHARES THROUGH A FINANCIAL INSTITUTION. Investors may purchase
shares through a financial institution which has a sales agreement with the
distributor. Orders are considered received when the Company receives payment by
wire or converts payment by check from the financial institution into federal
funds. It is the financial institution's responsibility to transmit orders
promptly. Financial institutions may charge additional fees for their services.

PURCHASING SHARES BY WIRE. Shares may be purchased by wire by calling the
Company before 12:00 noon (Eastern time) to place an order. The order is
considered received immediately. Payment by federal funds must be received
before 3 p.m. Eastern time in order to begin earning dividends that same day.
Federal funds should be wired as follows: Federated Shareholder Services
Company, c/o State Street Bank and Trust Company, Boston, MA; Attention:
EDGEWIRE; For Credit to: Money Market Management, Inc.; Fund Number (this number
can be found on the account statement or by contacting the Company); Group
Number or Order Number; Nominee or Institution Name; and Number 011000028.
Shares cannot be purchased by wire on holidays when wire transfers are
restricted. Questions on wire purchases should be directed to your shareholder
services representative at the telephone number listed on your account
statement.

PURCHASING SHARES BY CHECK. Shares may be purchased by sending a check to:
Federated Shareholder Services Company, P.O. Box 8600, Boston, MA 02266-8600.
The check should be made

payable to Money Market Management, Inc. Please include an account number on the
check. Orders by mail are considered received when payment by check is converted
into federal funds (normally the business day after the check is received), and
shares begin earning dividends the next day.

CONTINGENT DEFERRED SALES CHARGE. A contingent deferred sales charge will be
imposed only in certain instances in which the Company shares being redeemed
were acquired in exchange for shares of a Participating Fund. (Please see
"Exchange Information.") If Company shares were acquired in exchange for shares
of a Participating Fund, a redemption of those Company shares within four years
of the initial Participating Fund purchase will be subject to a contingent
deferred sales charge of 1% of the lesser of the purchase price of the shares
acquired in the initial Participating Fund purchase or the net asset value of
the Company shares acquired through the exchange. The contingent deferred sales
charge will not be imposed on Company shares obtained through: (i) the
reinvestment of dividends or distributions of long-term capital gains; or (ii)
the exchange of shares of Government Income Securities, Inc., that were
purchased during that fund's Charter Offering Period. In imposing the contingent
deferred sales charge, if any, redemptions of Company shares are deemed to
relate first to shares of other Participating Funds acquired through the
reinvestment of dividends and long-term capital gains, second to purchases of
shares occurring more than four years before the date of redemption, and finally
to purchases of such shares within the previous four years.

Also, the contingent deferred sales charge will not be imposed in connection
with redemptions by the Company of accounts with low balances or when a
redemption results from a return under the following circumstances: (i) a total
or partial distribution from a qualified plan, other than an IRA, Keough Plan,
or a custodial account, following retirement; (ii) a total or partial
distribution from an IRA, Keough Plan, or a custodial account after the
beneficial owner attains age 59 1/2; or (iii) from the death or disability of
the beneficial owner. The exemption from the contingent deferred sales charge
for qualified plans, an IRA, Keough Plan or a custodial account does not extend
to account transfers, rollovers, and other redemptions made for purposes of
reinvestment.

INVEST-BY-PHONE. Once an account has been opened, a shareholder may use
invest-by-phone for investments if an authorization form has been filed with
Federated Shareholder Services Company, the transfer agent for shares of the
Company. Approximately two weeks after sending the form to Federated Shareholder
Services Company, the shareholder may call Federated Services Company to
purchase shares. Federated Shareholder Services Company will send a request for
monies to the shareholder's commercial bank, savings bank, or credit union
("bank") via the Automated Clearing House. The shareholder's bank, which must be
an Automated Clearing House member, will then forward the monies to Federated
Shareholder Services Company. The purchase is normally entered the next business
day after the initial phone request. For further information and an application,
call the Company.

BY DIRECT DEPOSIT. Shareholders of the Company may have their Social Security,
Railroad Retirement, VA Compensation or Pension, Civil Service Retirement, and
certain other retirement payments invested directly into their Company account.
Shareholders must complete an application and file it with Federated Shareholder
Services Company prior to use of this program. Allow 60 to 90 days for the
application to be processed.

SPECIAL PURCHASE FEATURES

SYSTEMATIC INVESTMENT PROGRAM. A minimum of $100 can be automatically withdrawn
from the shareholder's checking account at an Automated Clearing House ("ACH")
member and invested in Company shares. Shareholders should contact their
financial institution or the Company to participate in this program.

EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------

The Company has exchange privileges with the Fortress Shares or the Class F
Shares of the following Federated Funds ("Participating Funds"):

American Leaders Fund, Inc.; California Municipal Income Fund; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Federated Bond Fund; Fortress
Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Government Income
Securities, Inc.; Liberty Equity Income Fund, Inc.; Federated Limited Term Fund;
Federated Limited Term Municipal Fund; New York Municipal Income Fund; Ohio
Municipal Income Fund; and Federated World Utility Fund.

Shares of the Participating Funds may be exchanged for Company shares at net
asset value. Company shares may also be exchanged for Participating Funds at net
asset value plus a 1% sales charge if applicable and not previously paid. No
additional fees are imposed on exchanges. This privilege is available to
shareholders resident in any state in which the funds share being acquired may
be sold.

Shareholders using this privilege must exchange shares having a net asset value
of at least $1,500.

Each of the Participating Funds may also invest in certain other types of
securities as described in the prospectus of each fund. Prospectuses for the
Participating Funds are available by writing to Federated Securities Corp.

Before the exchange, the shareholder must receive a prospectus for the fund for
which the exchange is being made. Upon receipt of proper instructions and
required supporting documents, shares submitted for exchange are redeemed, and
the proceeds invested in shares of the other fund. The Company reserves the
right to reject any exchange. The exchange privilege may be terminated or
modified at any time. Shareholders will be notified of the termination or
modification of the exchange privilege.

An exercise of the exchange privilege is treated as a sale for federal income
tax purposes. Depending on the circumstances, a short-term or long-term capital
gain or loss may be realized.

For further information on the exchange privilege and to obtain prospectuses,
contact the Company.

MAKING AN EXCHANGE. Instructions for exchanges may be given in writing or by
telephone. Written instructions may be sent to Federated Shareholder Services
Company, P.O. Box 8600, Boston, MA 02266-8600. Orders for exchanges received by
Federated Shareholder Services Company on any day the Company is open for
business will be executed as of the close of business that day.

Before an exchange can be made by telephone, a properly executed authorization
form must be completed and on file with Federated Shareholder Services Company.
Shares may be exchanged between two funds only if they have identical
shareholder registrations. Shares held in certificate form

cannot be exchanged by telephone until they are deposited to the shareholder's
account at Federated Shareholder Services Company. Telephone instructions may be
recorded. If reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions.

Shareholders may have difficulty making exchanges by telephone during times of
drastic economic or market changes. If this occurs, it is recommended that an
exchange request be made in writing.

HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------

Shares are redeemed at their net asset value next determined after the Company
receives the redemption request. Redemptions will be made on days on which the
Company computes its net asset value. Redemption requests must be received in
proper form and can be made as described below.

REDEEMING SHARES THROUGH A FINANCIAL INSTITUTION. Shares may be redeemed by
contacting the shareholder's financial institution. Shares will be redeemed at
the net asset value next determined after Federated Shareholder Services Company
receives the redemption request. According to the shareholder's instructions,
redemption proceeds can be sent to the financial institution or to the
shareholder by check or by wire. The financial institution is responsible for
promptly submitting redemption requests and providing proper written redemption
instructions. Customary fees and commissions may be charged by the financial
institution for this service.

REDEEMING SHARES BY TELEPHONE. Redemptions in any amount may be made by calling
the Company provided the Company has a properly completed authorization form.
These forms can be obtained from Federated Securities Corp. Proceeds from
redemption requests received before 12:00 noon (Eastern time) will be wired the
same day to the shareholder's account at a domestic commercial bank which is a
member of the Federal Reserve System, but will not include that day's dividend.
Proceeds from redemption requests received after that time include that day's
dividend but will be wired the following business day. Under limited
circumstances, arrangements may be made with the distributor for same-day
payment of proceeds, without that day's dividend, for redemption requests
received before 2:00 p.m. (Eastern time). Proceeds from redeemed shares
purchased by check or through ACH will not be wired until that method of payment
has cleared. Proceeds from redemption requests received on holidays when wire
transfers are restricted will be wired the following business day. Questions
about telephone redemptions on days when wire transfers are restricted should be
directed to your shareholder services representative at the telephone number
listed on your account statement.

Telephone instructions may be recorded and if reasonable procedures are not
followed by the Company, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If this occurs, "Redeeming Shares By Mail"
should be considered. If at any time the Company shall determine it necessary to
terminate or modify the telephone redemption privilege, shareholders would be
promptly notified.

REDEEMING SHARES BY MAIL. Shares may be redeemed in any amount by mailing a
written request to: Federated Shareholder Services Company, P.O. Box 8600,
Boston, MA 02266-8600. If share certificates have been issued, they should be
sent unendorsed with the written request by registered or certified mail to the
address noted above.

The written request should state: the Company name; the account name as
registered with the Company; the account number; and the number of shares to be
redeemed or the dollar amount requested. All owners of the account must sign the
request exactly as the shares are registered. Normally, a check for the proceeds
is mailed within one business day, but in no event more than seven days, after
the receipt of a proper written redemption request. Dividends are paid up to and
including the day that a redemption request is processed.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Company or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by a commercial
or savings bank, trust company or savings association whose deposits are insured
by an organization which is administered by the Federal Deposit Insurance
Corporation; a member firm of a domestic stock exchange; or any other "eligible
guarantor institution," as defined in the Securities Exchange Act of 1934. The
Company does not accept signatures guaranteed by a notary public.

SPECIAL REDEMPTION FEATURES

CHECK WRITING. Upon request, a checking account will be established to allow
shareholders to redeem their Company shares. Shareholder accounts will continue
to receive the daily dividend declared on the shares to be redeemed until the
check is presented to UMB Bank, N.A., the bank responsible for administering the
check writing program, for payment. However, checks should never be made payable
or sent to UMB Bank, N.A. or the Company to redeem shares, and a check may not
be written to close an account.

SYSTEMATIC WITHDRAWAL PROGRAM. If a shareholder's account has a value of at
least $10,000, a systematic withdrawal program may be established whereby
automatic redemptions are made from the account and transferred electronically
to any commercial bank, savings bank, or credit union that is an ACH member.
Shareholders may apply for participation in this program through their financial
institutions or the Company.

ACCOUNT AND SHARE INFORMATION
- --------------------------------------------------------------------------------

DIVIDENDS. Dividends are declared daily and paid monthly. Dividends are
automatically reinvested on payment dates in additional shares of the Company
unless cash payments are requested by writing to the Company.
CAPITAL GAINS. The Company does not expect to realize any capital gains or
losses. If capital gains or losses were to occur, they could result in an
increase or decrease in dividends. The Company will distribute in cash or
additional shares any realized net long-term capital gains at least once every
12 months.

CERTIFICATES AND CONFIRMATIONS. As transfer agent for the Company, Federated
Shareholder Services Company maintains a share account for each shareholder.
Share certificates are not issued unless requested by contacting the Company or
Federated Shareholder Services Company in writing. Monthly confirmations are
sent to report all transactions as well as dividends paid during the month.

ACCOUNTS WITH LOW BALANCES. Due to the high cost of maintaining accounts with
low balances, the Company may redeem shares in any account, except accounts
maintained by retirement plans, and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $500 due to shareholder
redemptions. Before shares are redeemed to close an account, the shareholder is
notified in writing and allowed 30 days to purchase additional shares to meet
the minimum requirement.

VOTING RIGHTS. Each share of the Company gives the shareholder one vote in
Director elections and other matters submitted to shareholders for vote. The
Company is not required to hold annual shareholder meetings. Shareholder
approval will be sought only for certain changes in the Company's operation and
for election of Directors under certain circumstances.

Directors may be removed by the Directors or by shareholders at a special
meeting. A special meeting shall be called by the Directors upon the written
request of shareholders owning at least 10% of the outstanding shares of the
Company.

TAX INFORMATION
- --------------------------------------------------------------------------------

FEDERAL INCOME TAX

The Company will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.

Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.

STATE AND LOCAL TAXES

Company shares are exempt from personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania.

Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.

PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------

From time to time, the Company advertises its total return, yield, and effective
yield.

Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.

Total return represents the change, over a specified period of time, in the
value of an investment in the Company after reinvesting all income
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.

From time to time, advertisements for the Company may refer to ratings,
rankings, and other information in certain financial publications and/or compare
the Company's performance to certain indices.

MONEY MARKET MANAGEMENT, INC.
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
BANK NOTES--4.9%
- ----------------------------------------------------------------------------------
BANKING--4.9%
-----------------------------------------------------------------
$1,000,000 Bank of New York, New York, 5.57%, 5/30/1996 $ 999,797
-----------------------------------------------------------------
4,000,000 Mellon Bank NA, Pittsburgh, 5.78%, 2/28/1996-9/26/1996 3,998,766
----------------------------------------------------------------- ------------
TOTAL BANK NOTES 4,998,563
----------------------------------------------------------------- ------------
CERTIFICATES OF DEPOSIT--4.9%
- ----------------------------------------------------------------------------------
BANKING--4.9%
-----------------------------------------------------------------
4,000,000 Swiss Bank Corp., Basle, 5.77%, 2/2/1996 4,000,000
-----------------------------------------------------------------
1,000,000 Westpac Banking, Corp., Sydney, 5.75%, 10/23/1996 1,000,000
----------------------------------------------------------------- ------------
TOTAL CERTIFICATES OF DEPOSIT 5,000,000
----------------------------------------------------------------- ------------
(A) COMMERCIAL PAPER--39.2%
- ----------------------------------------------------------------------------------
BANKING--7.8%
-----------------------------------------------------------------
4,000,000 ABN AMRO N.A., Finance, Inc., (Guaranteed by ABN AMRO Bank N.V.,
Amsterdam), 5.821%-5.86%, 2/16/1996 3,970,956
-----------------------------------------------------------------
1,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National Bank
PLC, London), 5.79%, 1/5/1996 999,365
-----------------------------------------------------------------
1,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian
Imperial Bank of Commerce, Toronto), 5.80%, 1/24/1996 996,346
-----------------------------------------------------------------
1,000,000 Royal Bank of Canada, Montreal, 5.62%, 4/26/1996 982,342
-----------------------------------------------------------------
1,000,000 Societe Generale North American, Inc., (Guaranteed by Societe
Generale, Paris), 5.765%, 2/9/1996 993,933
----------------------------------------------------------------- ------------
Total 7,942,942
----------------------------------------------------------------- ------------
FINANCE-COMMERCIAL--21.1%
-----------------------------------------------------------------
5,100,000 Asset Securitization Cooperative Corp., 5.793%-5.824%,
1/19/1996-1/26/1996 5,083,063
-----------------------------------------------------------------
5,000,000 Beta Finance, Inc., 5.611%-5.79%, 1/16/1996-5/17/1996 4,958,809
-----------------------------------------------------------------
2,000,000 CIT Group Holdings, Inc., 5.802%, 1/29/1996 1,971,718
-----------------------------------------------------------------
2,000,000 Falcon Asset Securitization Corp., 5.701%, 5/3/1996 1,962,143
-----------------------------------------------------------------
</TABLE>

MONEY MARKET MANAGEMENT, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
(A) COMMERCIAL PAPER--CONTINUED
- ----------------------------------------------------------------------------------
FINANCE-COMMERCIAL--CONTINUED
-----------------------------------------------------------------
$1,000,000 General Electric Capital Corp., 5.748%, 3/1/1996 $ 990,683
-----------------------------------------------------------------
5,000,000 Greenwich Funding Corp., 5.704%-5.749%, 2/15/1996-3/21/1996 4,948,358
-----------------------------------------------------------------
1,500,000 PREFCO-Preferred Receivables Funding Co., 5.671%, 3/25/1996 1,480,470
----------------------------------------------------------------- ------------
Total 21,395,244
----------------------------------------------------------------- ------------
FINANCE-RETAIL--10.3%
-----------------------------------------------------------------
2,000,000 American Express Credit Corp., 5.76%, 1/23/1996 1,993,156
-----------------------------------------------------------------
4,500,000 Associates Corp. of North America, 5.55%-5.738%,
2/23/1996-6/5/1996 4,439,902
-----------------------------------------------------------------
4,000,000 New Center Asset Trust, A1+/P1 Series, 5.752%, 2/28/1996 3,963,460
----------------------------------------------------------------- ------------
Total 10,396,518
----------------------------------------------------------------- ------------
TOTAL COMMERCIAL PAPER 39,734,704
----------------------------------------------------------------- ------------
CORPORATE NOTES--5.7%
- ----------------------------------------------------------------------------------
FINANCE-AUTOMOTIVE--1.0%
-----------------------------------------------------------------
1,000,000 Ford Motor Credit Co., 8.00%, 10/1/1996 1,015,748
----------------------------------------------------------------- ------------
FINANCE-EQUIPMENT--2.7%
-----------------------------------------------------------------
2,747,392 Navistar Financial 1995-A Owner Trust, 5.75%, 11/15/1996 2,747,354
----------------------------------------------------------------- ------------
FOOD & BEVERAGE--2.0%
-----------------------------------------------------------------
2,000,000 PepsiCo, Inc., 5.83%, 8/27/1996 2,000,469
----------------------------------------------------------------- ------------
TOTAL CORPORATE NOTES 5,763,571
----------------------------------------------------------------- ------------
(B) VARIABLE NOTES--29.6%
- ----------------------------------------------------------------------------------
BANKING--16.3%
-----------------------------------------------------------------
1,815,000 Canton Township Equity Partners L.P., (Huntington National Bank,
Columbus, OH LOC), 5.87%, 1/4/1996 1,815,000
-----------------------------------------------------------------
4,458,000 Congregate Care Corp., (Union Bank LOC), 6.00%, 1/3/1996 4,458,000
-----------------------------------------------------------------
5,000,000 Mercy Health Systems, (Morgan Guaranty Trust Co., New York LOC),
5.86%, 1/3/1996 5,000,000
-----------------------------------------------------------------
</TABLE>

MONEY MARKET MANAGEMENT, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
(B) VARIABLE NOTES--CONTINUED
- ----------------------------------------------------------------------------------
BANKING--CONTINUED
-----------------------------------------------------------------
$1,245,000 North Center Properties, (Huntington National Bank, Columbus, OH
LOC), 5.87%, 1/4/1996 $ 1,245,000
-----------------------------------------------------------------
4,000,000 Poly Foam Intl., Inc., (National City Bank, Cleveland, OH LOC),
5.95%, 1/4/1996 4,000,000
----------------------------------------------------------------- ------------
Total 16,518,000
----------------------------------------------------------------- ------------
FINANCE-AUTOMOTIVE--1.0%
-----------------------------------------------------------------
1,000,000 Alabama State IDA, TAX REVENUE BONDS SERIES 1994 GMC PROJECT,
(General Motors Corp. LOC), 6.119%, 1/4/1996 1,000,000
----------------------------------------------------------------- ------------
FINANCE-RETAIL--7.9%
-----------------------------------------------------------------
5,000,000 (c) AFS Insurance Premium Receivables Trust, SERIES 1994-A, 6.494%,
1/15/1996 5,000,000
-----------------------------------------------------------------
3,000,000 Carco Auto Loan Master Trust 1993-2, SERIES 1993-2, Class A1,
5.97%, 1/15/1996 3,000,000
----------------------------------------------------------------- ------------
Total 8,000,000
----------------------------------------------------------------- ------------
INSURANCE--4.4%
-----------------------------------------------------------------
4,500,000 Sun Life Insurance Co. of America, 6.088%, 1/2/1996 4,500,000
----------------------------------------------------------------- ------------
TOTAL VARIABLE NOTES 30,018,000
----------------------------------------------------------------- ------------
TIME DEPOSIT--1.1%
- ----------------------------------------------------------------------------------
BANKING--1.1%
-----------------------------------------------------------------
1,100,000 Bank of Nova Scotia, Toronto, 7.00%, 1/2/1996 1,100,000
----------------------------------------------------------------- ------------
</TABLE>

(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.

(b) Current rate and next reset date shown.

(c) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At the end of the period, these securities
amounted to $5,000,000 which represents 4.9% of net assets.

(d) The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.

(e) Also represents cost for federal tax purposes.

Note: The categories of investments are shown as a percentage of net assets
($101,389,955) at December 31, 1995.

The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
IDA -- Industrial Development Authority
LOC -- Letter of Credit
LP -- Limited Partnership
PLC -- Public Limited Company
</TABLE>

(See Notes which are an integral part of the Financial Statements)

MONEY MARKET MANAGEMENT, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in repurchase agreements $14,700,000
- ------------------------------------------------------------------
Investments in other securities 86,614,838
- ------------------------------------------------------------------ -----------
Total investments in securities, at amortized cost and value $101,314,838
- --------------------------------------------------------------------------------
Cash 38,944
- --------------------------------------------------------------------------------
Income receivable 421,699
- --------------------------------------------------------------------------------
Receivable for shares sold 729,301
- -------------------------------------------------------------------------------- ------------
Total assets 102,504,782
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for shares redeemed 998,283
- ------------------------------------------------------------------
Income distribution payable 23,126
- ------------------------------------------------------------------
Accrued expenses 93,418
- ------------------------------------------------------------------ -----------
Total liabilities 1,114,827
- -------------------------------------------------------------------------------- ------------
Net Assets for 101,389,955 shares outstanding $101,389,955
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------------------------------------------
$101,389,955 / 101,389,955 shares outstanding $1.00
- -------------------------------------------------------------------------------- ------------
</TABLE>

(See Notes which are an integral part of the Financial Statements)

MONEY MARKET MANAGEMENT, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Interest $6,314,052
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------
Investment advisory fee $ 519,840
- ---------------------------------------------------------------------
Administrative personnel and services fee 125,002
- ---------------------------------------------------------------------
Custodian fees 42,848
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 183,707
- ---------------------------------------------------------------------
Directors'/Trustees' fees 10,967
- ---------------------------------------------------------------------
Auditing fees 14,042
- ---------------------------------------------------------------------
Legal fees 10,448
- ---------------------------------------------------------------------
Portfolio accounting fees 40,338
- ---------------------------------------------------------------------
Shareholder services fee 259,920
- ---------------------------------------------------------------------
Share registration costs 24,017
- ---------------------------------------------------------------------
Printing and postage 8,282
- ---------------------------------------------------------------------
Insurance premiums 4,656
- ---------------------------------------------------------------------
Taxes 29,642
- ---------------------------------------------------------------------
Miscellaneous 6,907
- --------------------------------------------------------------------- ----------
Total expenses 1,280,616
- ---------------------------------------------------------------------
Waiver--
- ---------------------------------------------------------------------
Waiver of shareholder services fee (157,179)
- --------------------------------------------------------------------- ----------
Net expenses 1,123,437
- ---------------------------------------------------------------------------------- ----------
Net investment income $5,190,615
- ---------------------------------------------------------------------------------- ----------
</TABLE>

(See Notes which are an integral part of the Financial Statements)

MONEY MARKET MANAGEMENT, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------
Net investment income $ 5,190,615 $ 3,930,083
- ------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------
Distributions from net investment income (5,190,615) (3,930,083)
- ------------------------------------------------------------- ------------- -------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------
Proceeds from sale of shares 115,132,036 187,854,032
- -------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 4,728,001 3,517,693
- -------------------------------------------------------------
Cost of shares redeemed (133,057,940) (185,093,267)
- ------------------------------------------------------------- ------------- -------------
Change in net assets resulting from share transactions (13,197,903) 6,278,458
- ------------------------------------------------------------- ------------- -------------
Change in net assets (13,197,903) 6,278,458
- -------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------
Beginning of period 114,587,858 108,309,400
- ------------------------------------------------------------- ------------- -------------
End of period $ 101,389,955 $ 114,587,858
- ------------------------------------------------------------- ------------- -------------
</TABLE>

(See Notes which are an integral part of the Financial Statements)

MONEY MARKET MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION

Money Market Management, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified, open-end
management investment company. The Fund's objective is to obtain current income
consistent with stability of principal.

(2) SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.

INVESTMENT VALUATIONS--The Fund uses the amortized cost method to value its
portfolio securities in accordance with Rule 2a-7 under the Act.

REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.

The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors (the
"Directors"). Risks may arise from the potential inability of
counterparties to honor the terms of the repurchase agreement. Accordingly,
the Fund could receive less than the repurchase price on the sale of
collateral securities.

INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.

FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for

MONEY MARKET MANAGEMENT, INC.
- --------------------------------------------------------------------------------

the securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.

RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Board of Directors. The Fund will not
incur any registration costs upon such resales. The Fund's restricted
securities are valued at the price provided by dealers in the secondary
market or, if no market prices are available, at the fair value as
determined by the Fund's pricing committee.

Additional information on each restricted security held at December 31,
1995 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------------- ----------- -----------
<S> <C> <C>
AFS Insurance Premium Trust Series 1994-A 8/16/94 5,000,000
</TABLE>

USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.

OTHER--Investment transactions are accounted for on the trade date.

(3) CAPITAL STOCK

At December 31, 1995, there were 50,000,000,000 shares of $0.001 par value
capital stock authorized. At December 31, 1995, capital paid-in aggregated
$101,389,955. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1995 1994
- ---------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Shares sold 115,132,036 187,854,032
- ----------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 4,728,001 3,517,693
- ----------------------------------------------------------------
Shares redeemed (133,057,940) (185,093,267)
- ---------------------------------------------------------------- ------------ ------------
Net change resulting from share transactions (13,197,903) 6,278,458
- ---------------------------------------------------------------- ------------ ------------
</TABLE>

MONEY MARKET MANAGEMENT, INC.
- --------------------------------------------------------------------------------

(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee based on
the average daily net assets of the Fund as follows: 0.50% on the first $500
million, 0.475% on the next $500 million, 0.45% on the next $500 million, 0.425%
on the next $500 million, and 0.40% thereafter. The Adviser may voluntarily
choose to waive a portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.

ADMINISTRATIVE FEE--Federated Administrative Services, under the Administrative
Services Agreement, provides the Fund with administrative personnel and
services. This fee is based on the level of average aggregate daily net assets
of all funds advised by subsidiaries of Federated Investors for the period. The
administrative fee received during the period of the Administrative Services
Agreement shall be at least $125,000 per portfolio and $30,000 per each
additional class of shares.

SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of daily average net assets of the Fund shares for the period. This fee is to
obtain certain services for shareholders and to maintain shareholder accounts.
FSS may voluntarily choose to waive any portion of its fee. FSS can modify or
terminate this voluntary waiver at any time at its sole discretion.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Shareholder
Services Company serves as transfer and dividend disbursing agent for the Fund.
This fee is based on the size, type, and number of accounts and transactions
made by shareholders.

PORTFOLIO ACCOUNTING FEES--Federated Services Company maintains the Fund's
accounting records for which it receives a fee. The fee is based on the level of
the Fund's average daily net assets for the period, plus out-of-pocket expenses.

GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.

INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------

To the Board of Directors and Shareholders of
MONEY MARKET MANAGEMENT, INC.:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Money Market Management, Inc. as of December
31, 1995, the related statement of operations for the year then ended, the
statement of changes in net assets for the years ended December 31, 1995 and
1994, and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
December 31, 1995, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Money Market
Management, Inc. as of December 31, 1995, the results of its operations, the
changes in its net assets, and its financial highlights for the respective
stated periods in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Pittsburgh, PA
February 9, 1996

ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Money Market Management, Inc. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Advisers Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and c/o Federated Services Company
Trust Company--Boston P.O. Box 8600
Boston, MA 02266-8600
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, MA 02266-8600
- ------------------------------------------------------------------------------------------------
Independent Public Accountants
Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, PA 15222-5401
- ------------------------------------------------------------------------------------------------
</TABLE>

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

- --------------------------------------------------------------------------------
MONEY MARKET
MANAGEMENT, INC.
PROSPECTUS

An Open-End, Diversified,
Management Investment Company

Prospectus dated February 29, 1996

FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------

Distributor

A subsidiary of FEDERATED INVESTORS

FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779

CUSIP 609346200
8012811A (2/96)

MONEY MARKET MANAGEMENT, INC.

STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus of Money Market Management, Inc. (the "Company") dated
February 29, 1996. This Statement is not a prospectus. You may request
a copy of a prospectus or a paper copy of this Statement, if you have
received it electronically, free of charge by calling 1-800-235-4669.

FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779

Statement dated February 29, 1996

FEDERATED SECURITIES CORP.

Distributor
A subsidiary of Federated Investors

INVESTMENT POLICIES 3

Acceptable Investments 3
U.S. Government Securities 3
Bank Instruments 3
Ratings 4
When-Issued and Delayed Delivery
Transactions 4
Repurchase Agreements 5
Reverse Repurchase Agreements 5
Credit Enhancement 6
INVESTMENT LIMITATIONS 6

MONEY MARKET MANAGEMENT, INC.
MANAGEMENT 5

The Funds 17
Share Ownership 18
Directors Compensation 19
Director Liability 20
INVESTMENT ADVISORY SERVICES 21

Investment Adviser 21
Advisory Fees 21
BROKERAGE TRANSACTIONS 22

OTHER SERVICES 23

Company Administration 23
Custodian and Portfolio
Recordkeeper 24

Transfer Agent 24
Independent Auditors 24
SHAREHOLDER SERVICES 24

DETERMINING NET ASSET VALUE 25

REDEMPTION IN KIND 26

THE COMPANY'S TAX STATUS 27

PERFORMANCE INFORMATION 27

Yield 27
Effective Yield 28
Total Return 14
Performance Comparisons 28
ABOUT FEDERATED INVESTORS 29

Mutual Fund Market 30
Institutional Clients 15
Trust Organizations 31
Broker/Dealers and Bank
Broker/Dealer Subsidiaries 31

INVESTMENT POLICIES

Unless indicated otherwise, the policies described below may not be changed
by the Board of Directors without shareholder approval.
ACCEPTABLE INVESTMENTS
When determining whether a security presents minimal credit risks, the
investment adviser will consider the creditworthiness of: the issuer of the
security; the issuer of any demand feature applicable to the security; or
any guarantor of either the security or any demand feature.
U.S. GOVERNMENT SECURITIES
The types of U.S. government securities in which the Company may invest
generally include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes, and bonds) and obligations issued or guaranteed by
U.S. government agencies or instrumentalities. These securities are backed
by:
o the full faith and credit of the U.S. Treasury;
o the issuer's right to borrow from the U.S. Treasury;
o the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
o the credit of the agency or instrumentality issuing the obligations.
BANK INSTRUMENTS
The instruments of banks and savings associations whose deposits are insured
by the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF"), such as certificates of deposit, demand and time deposits, savings
shares, and bankers' acceptances, are not necessarily guaranteed by those
organizations. In addition to domestic bank instruments, the Company may
invest in: Eurodollar Certificates of Deposit issued by foreign branches of

U.S. or foreign banks; Eurodollar Time Deposits, which are U.S. dollar-
denominated deposits in foreign branches of U.S. or foreign banks; Canadian
Time Deposits, which are U.S. dollar-denominated deposits issued by branches
of major Canadian banks located in the United States; and Yankee
Certificates of Deposit, which are U.S. dollar-denominated certificates of
deposit issued by U.S. branches of foreign banks and held in the United
States.
RATINGS
An NRSRO's two highest rating categories are determined without regard for
sub-categories and gradations. For example, securities rated A-1+, A-1, or
A-2 by Standard & Poor's Ratings Group ("S&P"), Prime-1 or Prime-2 by
Moody's Investors Service, Inc. ("Moody's"), or F-1 (+ or -) or
F -2 (+ or -) by Fitch Investors Service, Inc. ("Fitch") are all considered
rated in one of the two highest short-term rating categories. The Company
will limit its investments in securities rated in the second highest short-
term rating category e.g., A-2 by S&P, Prime-2 by Moody's, or F-2 (+ or -)
by Fitch, to not more than 5% of its total assets, with not more than 1%
invested in the securities of any one issuer. The Company will follow
applicable regulations in determining whether a security rated by more than
one NRSRO can be treated as being in one of the two highest short-term
rating categories; currently, such securities must be rated by two NRSROs in
one of their two highest rating categories. See "Regulatory Compliance."
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Company. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid assets of
the Company sufficient to make payment for the securities to be purchased
are segregated on the Company`s records at the trade date. These assets are

marked to market daily and are maintained until the transaction has been
settled. The Company does not intend to engage in when-issued and delayed
delivery transactions to an extent that would cause the segregation of more
than 20% of the total value of its assets.
REPURCHASE AGREEMENTS
The Company believes that under the regular procedures normally in effect
for custody of the Company's portfolio securities subject to repurchase
agreements, a court of competent jurisdiction would rule in favor of the
Company and allow retention or disposition of such securities. The Company
will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the
Company's adviser to be creditworthy pursuant to guidelines established by
the Directors.
REVERSE REPURCHASE AGREEMENTS
The Company may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Company transfers possession of a portfolio instrument in
return for a percentage of the instrument's market value in cash and agrees
that on a stipulated date in the future the Company will repurchase the
portfolio instrument by remitting the original consideration plus interest
at an agreed upon rate. The use of reverse repurchase agreements may enable
the Company to avoid selling portfolio instruments at a time when a sale
may be deemed to be disadvantageous, but does not ensure this result.
However, liquid assets of the Company, in a dollar amount sufficient to make
payment for the securities to be purchased, are: segregated on the Company's
records at the trade date; marked to market daily; and maintained until the
transaction is settled.

CREDIT ENHANCEMENT
The Company typically evaluates the credit quality and ratings of credit-
enhanced securities based upon the financial condition and ratings of the
party providing the credit enhancement (the "credit enhancer"), rather than
the issuer. Generally, the Company will not treat credit-enhanced securities
as being issued by the credit enhancer for diversification purposes.
However, under certain circumstances applicable regulations may require the
Company to treat securities as having been issued by both the issuer and the
credit enhancer.
INVESTMENT LIMITATIONS

SELLING SHORT AND BUYING ON MARGIN
The Company will not sell any securities short or purchase any securities on
margin.
BORROWING MONEY
The Company will not borrow money except as a temporary measure for
extraordinary purposes and then only in amounts not in excess of 5% of the
value of its net assets. In addition, the Company may enter into reverse
repurchase agreements and otherwise borrow up to one-third of the value of
its total assets, including the amount borrowed, in order to meet redemption
requests without immediately selling any portfolio instruments.
This latter practice is not for investment leverage but solely to facilitate
management of the portfolio by enabling the Company to meet redemption
requests when the liquidation of portfolio instruments would be inconvenient
or disadvantageous. Interest paid on borrowed funds will not be available
for investment. The Company may not purchase any portfolio instruments
while any borrowings (exclusive of reverse repurchase agreements) are
outstanding.

PLEDGING ASSETS
The Company will not mortgage, pledge, or hypothecate any assets except as
necessary to secure permitted borrowings. In those cases, it may mortgage,
pledge or hypothecate assets having a market value not exceeding the lesser
of the dollar amounts borrowed or 10% of the value of total assets at the
time of the borrowing.
LENDING CASH OR SECURITIES
The Company will not lend any of its assets, except that it may purchase or
hold money market instruments permitted by its investment objective and
policies.
INVESTING IN COMMODITIES AND REAL ESTATE
The Company will not invest in commodities, commodity contracts, or real
estate, except that it may purchase money market instruments issued by
companies that invest in real estate or interests in real estate.
UNDERWRITING
The Company will not act as underwriter of securities issued by others,
except as it may be deemed to be an underwriter under the Securities Act of
1933 in connection with the sale of restricted securities which the Company
may purchase pursuant to its investment objective, policies, and
limitations.
CONCENTRATION OF INVESTMENTS
The Company will not purchase money market instruments if, as a result of
such purchase, more than 25% of the value of its total assets would be
invested in any one industry. However, investing in bank instruments (such
as time and demand deposits and certificates of deposit), U.S. government
obligations, or instruments secured by these money market instruments, such
as repurchase agreements, shall not be considered investments in any one
industry.

DIVERSIFICATION OF INVESTMENTS
The Corporation will not invest more than 5% of the value of its assets in
securities of any one issuer, except cash or cash items and U.S. government
obligations.With respect to 75% of the Company's assets, the Company will
not purchase securities other than repurchase agreements, issued by any one
banking institution having a value of more than 5% of the value of the
Company's total assets.
INVESTING IN RESTRICTED SECURITIES
The Company will not invest more than 10% of its net assets in securities
subject to restrictions on resale under federal securities law (except for
commercial paper issued under Section 4(2) of the Securities Act of 1933).
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Company will not invest in securities issued by any other investment
company.
INVESTING FOR CONTROL
The Company will not invest in securities of a company for the purpose of
exercising control or management.
The above limitations cannot be changed without shareholder approval. The
following investment limitations, however, may be changed by the Directors
without shareholder approval. Shareholders will be notified before any
material change in these limitations becomes effective.
INVESTING IN ILLIQUID SECURITIES
The Company will not invest more than 10% of the value of its net assets in
illiquid securities.
INVESTING IN NEW ISSUERS
The Company will not invest more than 5% of the value of its total assets in
securities of issuers which have records of less than three years of
continuous operations, including the operation of any predecessor.

INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND DIRECTORS
The Company will not purchase or retain the securities of any issuer if the
Officers and Directors of the Company or its investment adviser, owning
individually more than .50 of 1% of the issuer's securities, together own
more than 5% of the issuer's securities.
INVESTING IN OPTIONS
The Company will not invest in puts, calls, straddles, spreads, or any
combination of them.
INVESTING IN MINERALS
The Company will not purchase or sell interests in oil, gas, or other
mineral exploration or development programs or leases, although it may
purchase the securities of issuers which invest in or sponsor such programs.
For purposes of the above limitations, the Company considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic
bank or savings association having capital, surplus, and undivided profits
in excess of $100,000,000 at the time of investment to be "cash items."
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not result
in a violation of such limitation.
The Company did not borrow money or pledge securities in excess of 5% of the
value of its net assets during the last fiscal year and has no present
intent to do so during the coming fiscal year.

REGULATORY COMPLIANCE
The Company may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the

prospectus and this Statement of Additional Information, in order to comply
with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940. In particular, the
Company will comply with the various requirements of Rule 2a-7, which
regulates money market mutual funds. For example, with limited exceptions,
Rule 2a-7 prohibits the investment of more than 5% of the Company's total
assets in the securities of any one issuer, although the Company's
investment limitation only requires such 5% diversification with respect to
75% of its assets. The Company will invest more than 5% of its assets in any
one issuer only under the circumstances permitted by Rule 2a-7. The Company
will also determine the effective maturity of its investments, as well as
its ability to consider a security as having received the requisite short-
term ratings by NRSROs, according to Rule 2a-7. The Company may change these
operational policies to reflect changes in the laws and regulations without
the approval of its shareholders.

MONEY MARKET MANAGEMENT, INC. MANAGEMENT

Officers and Directors are listed with their addresses, birthdates, present
positions with Money Market Management, Inc., and principal occupations.

John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Director
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated

Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director, Trustee, or Managing
General Partner of the Funds. Mr. Donahue is the father of J. Christopher
Donahue, Execcutive Vice President and Director of the Company .

J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President and Director
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Administrative Services, Federated
Services Company, and Federated Shareholder Services; President or Executive
Vice President of the Funds; Director, Trustee, or Managing General Partner
of some of the Funds. Mr. Donahue is the son of John F. Donahue, Chairman
and Director of the Company.

Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Director
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner of
the Funds; formerly, Senior Partner, Ernst & Young LLP.

John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Director
President, Investment Properties Corporation; Senior Vice-President, John R.
Wood and Associates, Inc., Realtors; President, Northgate Village
Development Corporation; Partner or Trustee in private real estate ventures
in Southwest Florida; Director, Trustee, or Managing General Partner of the
Funds; formerly, President, Naples Property Management, Inc.

William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Director
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and Director, Ryan
Homes, Inc.

James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Director
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.

Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Director
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian and
Montefiore Hospitals; Director, Trustee, or Managing General Partner of the
Funds.

Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Director

Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Counsel, Horizon Financial, F.A., Western Region.

Peter E. Madden
Seacliff
562 Bellevue Avenue
Newport, RI
Birthdate: March 16, 1942
Director
Consultant; State Representative, Commonwealth of Massachusetts; Director,
Trustee, or Managing General Partner of the Funds; formerly, President,
State Street Bank and Trust Company and State Street Boston Corporation.

Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Director
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director, Trustee,
or Managing General Partner of the Funds.

John E. Murray, Jr., J.D., S.J.D.

President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Director
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue; Director, Trustee or Managing General Partner of the
Funds.

Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Director
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho
Management Center; Director, Trustee, or Managing General Partner of the
Funds; President Emeritus, University of Pittsburgh; founding Chairman,
National Advisory Council for Environmental Policy and Technology and
Federal Emergency Management Advisory Board.

Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Director

Public relations/marketing consultant; Conference Coordinator, Non-profit
entities; Director, Trustee, or Managing General Partner of the Funds.

Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research, Ltd.;
Executive Vice President and Director, Federated Securities Corp.; Trustee,
Federated Services Company; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds;
President, Executive Vice President and Treasurer of some of the Funds.

John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President, Secretary, and Trustee, Federated Investors;
Trustee, Federated Advisers, Federated Management, and Federated Research;
Director, Federated Research Corp. and Federated Global Research Corp.;
Trustee, Federated Services Company; President and Trustee, Federated
Shareholder Services; Director, Federated Securities Corp.; Executive Vice
President and Secretary of the Funds.

David M. Taylor
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President and Trustee, Federated Investors; Vice President,
Federated Shareholder Services; Treasurer of some of the Funds.

* This Director is deemed to be an "interested person" as defined in the
Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of the Board of
Directors handles the responsibilities of the Board between meetings of the
Board.

THE FUNDS
As referred to in the list of Directors and Officers, "Funds" includes the
following investment companies:
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Blanchard Funds;
Blanchard Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated ARMs Fund; Federated Equity Funds; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated High Yield
Trust; Federated Income Securities Trust; Federated Income Trust; Federated

Index Trust; Federated Institutional Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term Municipal Trust; Federated
Short-Term U.S. Government Trust; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S. Government Bond
Fund; Federated U.S. Government Securities Fund: 1-3 Years; Federated U.S.
Government Securities Fund: 3-5 Years; Federated U.S. Government Securities
Fund: 5-10 Years; First Priority Funds; Fixed Income Securities, Inc.;
Fortress Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal
Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High Yield Cash Trust;
Insurance Management Series; Intermediate Municipal Trust; International
Series, Inc.; Investment Series Funds, Inc.; Investment Series Trust;
Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund, Inc.;
Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; 111 Corcoran Funds; Peachtree Funds; The
Planters Funds; RIMCO Monument Funds; Star Funds; The Starburst Funds; The
Starburst Funds II; Stock and Bond Fund, Inc.; Targeted Duration Trust; Tax-
Free Instruments Trust; Trust for Financial Institutions; Trust For
Government Cash Reserves; Trust for Short-Term U.S. Government Securities;
Trust for U.S. Treasury Obligations; The Virtus Funds; World Investment
Series, Inc.
SHARE OWNERSHIP
Officers and Directors as a group own less than 1% of the Company`s
outstanding shares.

DIRECTORS COMPENSATION

AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
COMPANY COMPANY*# FROM FUND COMPLEX +

John F. Donahue $ -0- $-0- for the Company and
Chairman and Director 54 other investment companies in the Fund
Complex
J. Christopher Donahue $ -0- $-0- for the Company and
President and Director 16 other investment companies in the Fund
Complex
Thomas G. Bigley++ $1,105 $86,331 for the Company and
Director 54 other investment companies in the Fund Complex
John T. Conroy, Jr. $1,210 $115,760 for the Company and
Director 54 other investment companies in the Fund Complex
William J. Copeland $1,210 $115,760 for the Company and
Director 54 other investment companies in the Fund Complex
James E. Dowd $1,210 $115,760 for the Company and
Director 64 other investment companies in the Fund Complex
Lawrence D. Ellis, M.D. $1,105 $104,898 for the Company and
Director 54 other investment companies in the Fund Complex
Edward L. Flaherty, Jr. $1,210 $115,760 for the Company and
Director 54 other investment companies in the Fund Complex

Peter E. Madden $1,105 $104,898 for the Company and
Director 54 other investment companies in the Fund Complex
Gregor F. Meyer $1,105 $104,898 for the Company and
Director 54 other investment companies in the Fund Complex
John E. Murray, Jr. $1,105 $ 104,898 for the Company and
Director 54 other investment companies in the Fund Complex
Wesley W. Posvar $1,105 $104,898 for the Company and
Director 54 other investment companies in the Fund Complex
Marjorie P. Smuts$1,105 $104,898 for the Company and
Director 54 other investment companies in the Fund Complex

*Information is furnished for the fiscal year ended December 31, 1995.
#The aggregate compensation is provided for the Corporation which is
comprised of one portfolio.
+The information is provided for the last calendar year.
++Mr. Bigley served on 39 investment companies in the Federated Funds
Complex from January 1 through
September 30, 1995. On October 1, 1995, he was appointed a Trustee on 15
additional Federated Funds.
DIRECTOR LIABILITY
The Articles of Incorporation provide that the Directors will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.

INVESTMENT ADVISORY SERVICES

INVESTMENT ADVISER
The Company's investment adviser is Federated Advisers. It is a subsidiary
of Federated Investors. All the voting securities of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, his wife and
his son, J. Christopher Donahue.
The adviser shall not be liable to the Company or any shareholder for any
losses that may be sustained in the purchase, holding, or sale of any
security or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Company.
ADVISORY FEES
For its advisory services, Federated Advisers receives an annual investment
advisory fee as described in the prospectus. For the fiscal years ended
December 31, 1995, 1994, and 1993, the adviser earned $519,840, $601,172 and
$566,814, respectively, of which $0, $0, and $79,605, respectively, were
waived.
STATE EXPENSE LIMITATIONS
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Company's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses)
exceed 2-1/2% per year of the first $30 million of average net assets,
2% per year of the next $70 million of average net assets, and 1-1/2%
per year of the remaining average net assets, the adviser will
reimburse the Company for its expenses over the limitation.

If the Company's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the adviser will
be limited, in any single fiscal year, by the amount of the investment
advisory fees.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the adviser will generally
use those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. The adviser makes decisions on portfolio transactions and selects
brokers and dealers subject to guidelines established by the Directors. The
adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Company or to the
adviser and may include: advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry
studies; receipt of quotations for portfolio evaluations; and similar
services. Research services provided by brokers and dealers may be used by
the adviser or its affiliates in advising the Company and other accounts. To
the extent that receipt of these services may supplant services for which
the adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses. The adviser and its affiliates exercise reasonable
business judgment in selecting brokers who offer brokerage and research

services to execute securities transactions. They determine in good faith
that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. During the fiscal
years ended December 31, 1995, 1994 and 1993, the Company paid total
brokerage commissions of $0, $0 and $0, respectively.
Although investment decisions for the Company are made independently from
those of the other accounts managed by the adviser, investments of the type
the Company may make may also be made by those other accounts. When the
Company and one or more other accounts managed by the adviser are prepared
to invest in, or desire to dispose of, the same security, available
investments or opportunities for sales will be allocated in a manner
believed by the adviser to be equitable to each. In some cases, this
procedure may adversely affect the price paid or received by the Company or
the size of the position obtained or disposed of by the Company. In other
cases, however, it is believed that coordination and the ability to
participate in volume transactions will be to the benefit of the Company.
OTHER SERVICES

COMPANY ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Company for a fee as
described in the prospectus. Prior to March 1, 1994, Federated
Administrative Services, Inc., also a subsidiary of Federated Investors,
served as the Company's Administrator. (For purposes of this Statement of
Additional Information, Federated Administrative Services and Federated
Administrative Services, Inc. may hereinafter collectively be referred to as
the "Administrators".) For the fiscal year ended December 31, 1995,
Federated Administrative Services earned $125,002. For the fiscal year ended

December 31, 1994, the Administrators earned $156,053. For the fiscal year
ended December 31, 1993, Federated Administrative Services, Inc. earned
$324,918. Dr. Henry J. Gailliot, an officer of Federated Advisers, the
adviser to the Company, holds approximately 20% of the outstanding common
stock and serves as a director of Commercial Data Services, Inc., a company
which provides computer processing services to Federated Administrative
Services.
CUSTODIAN AND PORTFOLIO RECORDKEEPER
State Street Bank and Trust Company -Boston, Boston, MA, is custodian for
the securities and cash of the Company. State Street Bank and Trust, Boston,
MA, provides certain accounting and recordkeeping services with respect to
the Company's portfolio investments.
TRANSFER AGENT
As transfer agent, Federated Shareholder Services Company maintains all
necessary shareholder records. For its services, the transfer agent receives
a fee based on the number of shareholder accounts.
INDEPENDENT AUDITORS
The independent auditors for the Company are Deloitte & Touche LLP,
Pittsburgh, PA.
SHAREHOLDER SERVICES

This arrangement permits the payment of fees to Federated Shareholder
Services and financial institutions to cause services to be provided which
are necessary for the maintenance of shareholder accounts and to encourage
personal services to shareholders by a representative who has knowledge of
the shareholder's particular circumstances and goals. These activities and
services may include, but are not limited to: providing office space,
equipment, telephone facilities, and various clerical, supervisory,

computer, and other personnel as necessary or beneficial to establish and
maintain shareholder accounts and records; processing purchase and
redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries; and assisting clients in
changing dividend options, account designations, and addresses. By adopting
the Shareholder Services Agreement, the Directors expect that the Company
will benefit by: (1) providing personal services to shareholders;
(2) investing shareholder assets with a minimum of delay and administrative
detail; (3) enhancing shareholder recordkeeping systems; and (4) responding
promptly to shareholders' requests and inquiries concerning their accounts.
For the fiscal or year ending December 31, 1995, payments in the amount of
$259,920 were made pursuant to the Shareholder Services Agreement, $157,179
of which was waived.
DETERMINING NET ASSET VALUE

The Directors have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization
of premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of
the Company computed by dividing the annualized daily income on the
Company's portfolio by the net asset value computed as above may tend to be
higher than a similar computation made by using a method of valuation based
upon market prices and estimates. In periods of rising interest rates, the
opposite may be true.

The Company's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-7
(the "Rule") promulgated by the Securities and Exchange Commission under the
Investment Company Act of 1940. Under the Rule, the Directors must establish
procedures reasonably designed to stabilize the net asset value per share,
as computed for purposes of distribution and redemption, at $1.00 per share,
taking into account current market conditions and the Company's investment
objective. The procedures include monitoring the relationship between the
amortized cost value per share and the net asset value per share based upon
available indications of market value. The Directors will decide what, if
any, steps should be taken if there is a difference of more than 0.5 of 1%
between the two values. The Directors will take any steps they consider
appropriate (such as redemption in kind or shortening the average portfolio
maturity) to minimize any material dilution or other unfair results arising
from differences between the two methods of determining net asset value.
REDEMPTION IN KIND

The Company is obligated to redeem shares solely in cash up to $250,000 or
1% of the Company's net asset value, whichever is less, for any one
shareholder within a 90-day period. Any redemption beyond this amount will
also be in cash unless the Directors determine that further payments should
be in kind. In such cases, the Company will pay all or a portion of the
remainder of the redemption in portfolio instruments valued in the same way
as the Company determines net asset value. The portfolio instruments will be
selected in a manner that the Directors deem fair and equitable. Redemption
in kind is not as liquid as a cash redemption. If redemption is made in
kind, shareholders who sell these securities could receive less than the
redemption value and could incur certain transaction costs.

THE COMPANY'S TAX STATUS

To qualify for the special tax treatment afforded to regulated investment
companies, the Company must, among other requirements: derive at least 90%
of its gross income from dividends, interest, and gains from the sale of
securities; derive less than 30% of its gross income from the sale of
securities held less than three months; invest in securities within certain
statutory limits; and distribute to its shareholders at least 90% of its net
income earned during the year.
PERFORMANCE INFORMATION

Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is invested;
changes in interest rates; changes in expenses; and the relative amount of
cash flow. To the extent that financial institutions and broker/dealers
charge fees in connection with services provided in conjunction with an
investment in shares of the Company, the performance will be reduced for
those shareholders paying those fees.
YIELD
The yield is calculated based upon the seven days ending on the day of the
calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any additional
shares purchased with dividends earned from the original one share and all
dividends declared on the original and any purchased shares; dividing the
net change in the account's value by the value of the account at the
beginning of the base period to determine the base period return; and
multiplying the base period return by 365/7.

The Company's yield for the seven-day period ended December 31, 1995, was
4.81%.
EFFECTIVE YIELD
The effective yield is calculated by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to the
365/7th power; and subtracting 1 from the result. The Company's effective
yield for the seven-day period ended December 31, 1995, was 4.92%.

TOTAL RETURN
Average annual total return is the average compounded rate of return for a
given period that would equate a $1,000 initial investment to the ending
redeemable value of that investment. The ending redeemable value is computed
by multiplying the number of shares owned at the end of the period by the
net asset value per share at the end of the period. The number of shares
owned at the end of the period is based on the number of shares purchased at
the beginning of the period with $1,000, adjusted over the period by any
additional shares, assuming the monthly reinvestment of all dividends and
distributions.
The Company's average annual total returns for the one-five-and ten-year
periods ended December 31, 1995 were 5.13%, 3.77% and 5.45%, respectively.
PERFORMANCE COMPARISONS
Investors may use financial publications and/or indices to obtain a more
complete view of the Company's performance. When comparing performance,
investors should consider all relevant factors such as the composition of
any index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute

offering price. The financial publications and/or indices which the Company
uses in advertising may include:
O LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories based on total return, which assumes the reinvestment of all
income dividends and capital gains distributions, if any.
o DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money
market funds weekly. Donoghue's Money Market Insight publication
reports monthly and 12 month-to-date investment results for the same
money funds.
o MONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day effective
yield.
O BANK RATE MONITOR NATIONAL INDEX, Miami Beach, Florida, published
weekly, is an average of the interest rates of personal money market
deposit accounts at ten of the largest banks and thrifts in each of the
five largest Standard Metropolitan Statistical Areas. If more than one
rate is offered, the lowest rate is used. Account minimums and
compounding methods may vary.
ABOUT FEDERATED INVESTORS

Federated Investors is dedicated to meeting investor needs which is
reflected in its investment decision making-structured, straightforward, and
consistent. This has resulted in a history of competitive performance with a
range of competitive investment products that have gained the confidence of
thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research. Investment

decisions are made and executed by teams of portfolio managers, analysts,
and traders dedicated to specific market sectors.
J. Thomas Madden, Executive Vice President, oversees Federated Investors'
equity and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated Investors' domestic fixed
income management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated Investors' international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500 funds
available.*
Federated Investors, through its subsidiaries, distributes mutual funds for
a variety of investment applications. Specific markets include:

*Source: Investment Company Institute

INSTITUTIONAL CLIENTS
Federated Investors meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for
a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment and
financial advisors. The marketing effort to these institutional clients is
headed by John B. Fisher, President, Institutional Sales Division.

TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than 1,500
banks and trust organizations. Virtually all of the trust divisions of the
top 100 bank holding companies use Federated funds in their clients'
portfolios. The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated funds are available to consumers through major brokerage firms
nationwide--including 200 New York Stock Exchange firms--supported by more
wholesalers than any other mutual fund distributor. The marketing effort to
these firms is headed by James F. Getz, President, Broker/Dealer Division.

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