PRUDENTIAL MONEYMART ASSETS INC, 485APOS, 1995-10-31

PRUDENTIAL MONEYMART ASSETS INC
485APOS, 1995-10-31

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As filed with the Securities and Exchange Commission on October 31, 1995
Securities Act Registration No. 2-55301
Investment Company Act Registration No. 811-2619

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 30 [X]

and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

Amendment No. 21 [X]

(Check appropriate box or boxes)

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

PRUDENTIAL-BACHE MONEYMART ASSETS INC.

(Exact name of registrant as specified in charter)

ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292
(Address of Principal Executive Offices) (Zip Code)

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

Registrant's Telephone Number, Including Area Code: (212) 214-1250
S. Jane Rose, Esq.
One Seaport Plaza
New York, New York 10292
(Name and Address of Agent for Service)
Approximate date of proposed public offering: As soon as practicable after
the effective date of the Registration Statement.

It is proposed that this filing will become effective (check appropriate box):

[ ] immediately upon filing pursuant to paragraph (b)

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

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

[X] on January 2, 1996 pursuant to paragraph (a)(1)

[ ] 75 days after filing pursuant to paragraph (a)(2)

[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

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

Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. The Rule 24f-2 Notice for the Registrant's most recent fiscal year
ended December 31, 1994 was filed on February 28, 1995.

===============================================================================

<PAGE>

CROSS REFERENCE SHEET
(as required by Rule 495)

N-1A Item No. Location
- ------------- --------
Part A
<S> <C> <C>
Item 1. Cover Page ................................... Cover Page

Item 2. Synopsis ..................................... Fund Expenses

Item 3. Condensed Financial Information .............. Fund Expenses; Financial Highlights;
Calculation of Yield

Item 4. General Description of Registrant ............ Cover Page; How the Fund Invests;
General Information

Item 5. Management of the Fund ....................... Financial Highlights; How the Fund Is
Managed; General Information

Item 6. Capital Stock and Other Securities ........... Taxes, Dividends and Distributions;
General Information

Item 7. Purchase of Securities Being Offered ......... How the Fund is Managed; How the
Fund Values Its Shares

Item 8. Redemption or Repurchase ..................... How the Fund is Managed; General
Information

Item 9. Pending Legal Proceedings .................... Not Applicable

Part B

Item 10. Cover Page ................................... Cover Page

Item 11. Table of Contents ............................ Table of Contents

Item 12. General Information and History .............. General Information and History

Item 13. Investment Objectives and Policies ........... Investment Objective and Policies;
Investment Restrictions

Item 14. Management of the Fund ....................... Directors and Officers; Manager;
Distributor

Item 15. Control Persons and Principal
Holders of Securities ........................ Not Applicable

Item 16. Investment Advisory and Other Services ....... Manager; Distributor; Custodian,
Transfer and Dividend Disbursing
Agent and Independent Accountants

Item 17. Brokerage Allocation and Other Practices ..... Portfolio Transactions

Item 18. Capital Stock and Other Securities ........... Not Applicable

Item 19. Purchase, Redemption and Pricing
of Securities Being Offered .................. Purchase and Redemption of Fund
Shares; Shareholder Investment
Account

Item 20. Tax Status ................................... Taxes

Item 21. Underwriters ................................. Distributor

Item 22. Calculation of Performance Data .............. Calculation of Yield

Item 23. Financial Statements ......................... Financial Statements
</TABLE>

Part C

Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Post-Effective Amendment
to the Registration Statement.

<PAGE>

Prudential MoneyMart Assets, Inc.

Class Z shares

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

Prospectus dated January 2, 1996

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

Prudential MoneyMart Assets, Inc. (the Fund), is an open-end, diversified,
management investment company, or mutual fund. Its investment objective is
maximum current income consistent with stability of capital and the maintenance
of liquidity. The Fund seeks to achieve this objective by investing primarily in
a portfolio of money market instruments maturing in thirteen months or less.
There can be no assurance that the Fund's investment objective will be achieved.
See "How the Fund Invests--Investment Objective and Policies."

The Fund's address is One Seaport Plaza, New York, New York 10292, and its
telephone number is (800) 225-1852.

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SEE "HOW THE FUND VALUES ITS
SHARES."

Class Z shares are offered exclusively for sale to the Trustee of the Prudential
Securities 401(k) Plan, a defined contribution plan sponsored by Prudential
Securities Incorporated (the PSI 401(k) Plan or the Plan). Only Class Z shares
are offered through this Prospectus. The Fund also offers shares (now called
Class A shares) through the attached Prospectus dated February 28, 1995 (the
Retail Class Prospectus), which is a part hereof.

This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Additional information
about the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information, dated February 28, 1995, which information
is incorporated herein by reference (is legally considered a part of this
Prospectus) and is available without charge upon request to the Fund at the
address or telephone number noted above.

- -------------------------------------------------------------------------------
Investors are advised to read this Prospectus and retain it for future
reference.
- -------------------------------------------------------------------------------

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.

<PAGE>

FUND EXPENSES

Shareholder Transaction Expenses Class Z Shares
--------------
<S> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) ............................................ None
Maximum Sales Load or Deferred Sales Load Imposed on Reinvested Dividends ....... None
Deferred Sales Load (as a percentage of original purchase price
or redemption proceeds, whichever is lower) .................................... None
Redemption Fees ................................................................. None
Exchange Fee .................................................................... None

<CAPTION>
Annual Fund Operating Expenses Class Z Shares*
(as a percentage of average net assets) ---------------
Management Fees ................................................................ .301%
12b-1 Fees ..................................................................... None
Other Expenses .................................................................. .281%
----
Total Fund Operating Expenses ................................................... .582%
====
</TABLE>

1 3 5 10
Example year years years 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:
Class Z* ......................................................... $6 $19 $32 $73
</TABLE>

The above example is based on expenses expected to have been incurred if
Class Z shares had been in existence throughout the entire fiscal year ended
December 31, 1994 based on the average value of the account in each of the ten
years. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The purpose of this table is to assist investors in understanding the
various costs and expenses that an investor in Class Z shares of the Fund will
bear, whether directly or indirectly. For more complete descriptions of the
various costs and expenses, see "How the Fund is Managed." "Other Expenses"
includes operating expenses of the Fund, such as Directors' and professional
fees, registration fees, reports to shareholders and transfer agency and
custodian fees.
- -----------
* Estimated based on expenses expected to have been incurred if Class Z
shares had been in existence throughout the fiscal year ended December 31,
1994.

2
<PAGE>

THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND IS MANAGED--DISTRIBUTOR" IN
THE RETAIL CLASS PROSPECTUS:

Prudential Securities serves as the Distributor of Class Z shares and incurs the
expenses of distributing the Fund's Class Z shares under a Distribution
Agreement with the Fund, none of which is reimbursed by or paid for by the Fund.

THE FOLLOWING INFORMATION SUPPLEMENTS "TAXES, DIVIDENDS AND
DISTRIBUTIONS--TAXATION OF SHAREHOLDERS" IN THE RETAIL CLASS PROSPECTUS:

As a qualified plan, the PSI 401(k) Plan generally pays no federal income tax.
Individual participants in the Plan should consult the Plan documents and their
own tax advisers for information on the tax consequences associated with
participating in the PSI 401(k) Plan.

THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER GUIDE--HOW TO BUY SHARES OF
THE FUND" AND "SHAREHOLDER GUIDE--HOW TO SELL YOUR SHARES" IN THE RETAIL CLASS
PROSPECTUS:

Class Z shares of the Fund are offered exclusively for sale to the Trustee of
the PSI 401(k) Plan. Such shares may be purchased or redeemed only by the Plan
on behalf of individual Plan participants at NAV without any sales or redemption
charge. Class Z shares are not subject to any minimum investment requirements.
The Plan purchases and redeems shares to implement the investment choices of
individual Plan participants with respect to their contributions in the Plan.
All purchases through the Plan will be for Class Z shares. Individual Plan
participants should consult Plan documents for a description of the procedures
and limitations applicable to the making or changing of investment choices.
Copies of the Plan documents are available from the Prudential Securities
Benefits Department at One Seaport Plaza, 33rd Floor, New York, New York 10292
or by calling (212) 214-7194.

THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER GUIDE--HOW TO EXCHANGE YOUR
SHARES" IN THE RETAIL CLASS PROSPECTUS:

Effective as of the date of this Prospectus, Fund shares held through the PSI
401(k) Plan on behalf of participants will be automatically exchanged at
relative net asset value for Class Z shares. You should contact the Prudential
Securities Benefits Department about how to exchange your Class Z shares. See
"How to Buy Shares of the Fund" above.

THE INFORMATION ABOVE ALSO SUPPLEMENTS THE INFORMATION UNDER "FUND HIGHLIGHTS"
IN THE RETAIL CLASS PROSPECTUS AS APPROPRIATE.

<PAGE>

PRUDENTIAL MONEYMART ASSETS, INC.
Supplement dated January 2, 1996 to Prospectus dated
February 28, 1995

Fund shares outstanding prior to January 2, 1996 have been redesignated as
Class A shares. Accordingly, all references in this Prospectus to "shares" of
the Fund shall mean "Class A shares" of the Fund except where the context
requires otherwise. Effective January 2, 1996, the Fund's name was changed to
Prudential MoneyMart Assets, Inc.

THE FOLLOWING INFORMATION SUPPLEMENTS "FINANCIAL HIGHLIGHTS" IN THE
PROSPECTUS:

FINANCIAL HIGHLIGHTS
(for a share outstanding throughout the period indicated)--(Class A Shares)

The following financial highlights for Class A shares are unaudited. This
information should be read in conjunction with the financial statements and the
notes thereto, which appear in the Statement of Additional Information. The
financial highlights contain selected data for a Class A share of common stock
outstanding, total return, ratios to average net assets and other supplemental
data for the period indicated. The information has been determined based on data
contained in the financial statements.

Six Months
Ended
June 30, 1995
(unaudited)
-------------
PER SHARE OPERATING PERFORMANCE:

Net asset value, beginning of period ...................... $ 1.000
Net investment income and net realized gains .............. .027
Dividends and distributions to shareholders ............... (.027)
---------
Net asset value, end of period ............................ $ 1.000
=========
TOTAL RETURN(b):........................................... 2.75%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) ........................... $6,838,853
Average net assets (000) .................................. $6,611,965
Ratios to average net assets(a):
Expenses, including distribution fee ..................... .70%
Expenses, excluding distribution fee ..................... .58%
Net investment income .................................... 5.46%

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

(a) Annualized.

(b) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of the period reported and includes reinvestment
of dividends and distributions. Total return for periods of less than a
full year are not annualized.

THE FOLLOWING INFORMATION SUPPLEMENTS "CALCULATION OF YIELD" IN THE
PROSPECTUS:

The following is an example of the current and effective annual yield
calculations as of June 30, 1995.

Value of hypothetical account at
end of period ......................................... $1.001053865
Value of hypothetical account at
beginning of period ................................... 1.000000000
------------
Base period return ..................................... $ .001053865
============
Current Yield (0.001053865 X (365/7)) .................. 5.50%
Effective Annual Yield, assuming weekly compounding .... 5.65%

<PAGE>

THE FOLLOWING INFORMATION SUPPLEMENTS "GENERAL INFORMATION--DESCRIPTION OF
SHARES" IN THE PROSPECTUS:

The Fund is authorized to offer 20 billion shares of common stock, $.10 par
value per share, currently divided into two classes of shares, designated Class
A and Class Z shares. Each class represents an interest in the same assets of
the Fund and is identical in all respects except that (i) Class A shares are
subject to distribution and/or service fees, (ii) Class Z shares are not
subject to any distribution and/or service fees, (iii) each class has
exclusive voting rights with respect to its distribution and service plan, if
any, and on any other matter submitted to shareholders that relates solely to
its arrangement and has separate voting rights on any matter submitted to
shareholders in which the interests of one class differ from the interests of
any other class, (iv) each class has a different exchange privilege, and (v)
Class Z shares are offered exclusively for sale to the Trustee of the Prudential
Securities 401(k) Plan, a defined contribution plan sponsored by Prudential
Securities. In accordance with the Fund's Articles of Incorporation, the Board
of Directors may authorize the creation of additional series and classes within
such series, with such preferences, privileges, limitations and voting and
dividend rights as the Directors may determine. Currently, the Fund is offering
two classes, designated Class A and Class Z shares.

<PAGE>

PRUDENTIAL MONEYMART ASSETS, INC.
Supplement dated January 2, 1996 to
Statement of Additional Information dated
February 28, 1995

Fund shares outstanding prior to January 2, 1996 have been redesignated as
Class A shares. Accordingly, all references in the Statement of Additional
Information to "shares" of the Fund shall mean "Class A shares" of the Fund
except where the context requires otherwise. Effective January 2, 1996, the
Fund's name was changed to Prudential MoneyMart Assets, Inc.

THE FOLLOWING INFORMATION SUPPLEMENTS "DIRECTORS AND OFFICERS" IN THE
STATEMENT OF ADDITIONAL INFORMATION:

As of October 13, 1995, the Directors and officers of the Fund, as a group,
owned less than 1% of the outstanding shares of common stock of the Fund.

As of October 13, 1995, there were no beneficial owners, directly or
indirectly, of more than 5% of the outstanding shares of common stock of the
Fund.

As of October 13, 1995, Prudential Securities was the record holder for
other beneficial owners of 7,108,153,689 shares or 98% of the outstanding
shares of the Fund. In the event of any meetings of shareholders, Prudential
Securities will forward, or cause the forwarding of, proxy materials to the
beneficial owners for which it is the record holder.

THE FOLLOWING INFORMATION SUPPLEMENTS "DISTRIBUTOR" IN THE STATEMENT OF
ADDITIONAL INFORMATION:

Prudential Securities serves as the Distributor of Class Z shares and
incurs the expenses of distributing the Fund's Class Z shares under a
Distribution Agreement with the Fund, none of which is reimbursed by or paid for
by the Fund.

THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER INVESTMENT
ACCOUNT--EXCHANGE PRIVILEGE" IN THE STATEMENT OF ADDITIONAL INFORMATION:

Class Z. Class Z shares may be exchanged for Class Z shares of the funds
listed below which participate in the PSI 401(k) Plan. No fee or sales load will
be imposed upon the exchange.

Prudential Allocation Fund
(Balanced Portfolio)
Prudential Equity Income Fund
Prudential Equity Fund, Inc.
Prudential Global Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
(Money Market Series)
Prudential Growth Opportunity Fund, Inc.
Prudential High Yield Fund, Inc.
Prudential Multi-Sector Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential Utility Fund, Inc.

<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL MONEYMART ASSETS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Bank Notes--4.9%
Bank One Indianapolis
$57,000 5.98%, 8/1/95 $ 56,999,952
35,000 7.18%, 2/5/96 35,082,188
Huntington National Bank
29,000 6.20%, 11/3/95 29,008,180
Mellon Bank NA
26,000 6.20%, 11/1/95 25,998,277
NationsBank of Dallas, Texas, NA
10,000 7.30%, 1/26/96 10,023,779
NationsBank of North Carolina
15,000 5.65%, 7/21/95 14,993,159
NationsBank of Texas
138,000 6.82%, 10/31/95 138,002,022
State Street Bank & Trust Co.
23,000 6.01%, 9/20/95 22,999,551
--------------
Total Bank Notes
(amortized cost $333,107,108) 333,107,108
- ------------------------------------------------------------
Certificates of Deposit - Domestic--.3%
National Westminister Bank,
Delaware
18,000 5.85%, 12/26/95 18,000,000
--------------
Total Certificates of
Deposit-Domestic
(amortized cost $18,000,000) 18,000,000
- ------------------------------------------------------------
Certificates of Deposit - Eurodollar--2.0%
Abbey National Treasury Svcs.
100,000 6.40%, 5/17/96 100,000,000
Bank of New York
18,000 6.15%, 7/3/95 18,000,032
13,000 6.27%, 10/31/95 13,002,945
Toronto Dominion Bank
7,000 5.78%, 7/18/95 6,998,028
--------------
Total Certificates of Deposit -
Eurodollar (amortized cost
$138,001,005) 138,001,005
- ------------------------------------------------------------
Certificates of Deposit - Yankee--15.6%
Bank of Montreal
207,000 5.99%, 7/5/95 207,000,000
Banque Nationale De Paris
45,000 7.07%, 2/20/96 45,113,002
21,000 6.95%, 2/21/96 21,038,211
Caisse Nationale De Credit
Agricole
$50,000 6.22%, 11/2/95 $ 50,003,160
Canadian Imperial Bank Commerce
20,000 5.98%, 7/27/95 19,999,657
Commerzbank
8,000 7.32%, 1/24/96 8,029,897
30,000 7.04%, 2/16/96 30,073,898
Industrial Bank of Japan
150,000 6.02%, 7/5/95 150,000,000
Norinchukin Bank
125,000 6.06%, 7/20/95 125,000,656
Sanwa Bank
35,000 6.02%, 7/3/95 35,000,048
117,000 5.95%, 7/6/95 116,999,175
Sumitomo Bank
50,000 6.04%, 7/5/95 50,000,293
177,000 6.00%, 7/10/95 177,000,000
33,000 6.06%, 7/14/95 33,000,119
--------------
Total Certificates of Deposit -
Yankee (amortized cost
$1,068,258,116) 1,068,258,116
- ------------------------------------------------------------
Commercial Paper - Domestic--41.2%
A. H. Robins Co., Inc.
34,000 5.97%, 7/20/95 33,892,872
30,000 5.97%, 7/21/95 29,900,500
6,700 5.95%, 8/24/95 6,640,203
Abbey National North America Corp.
62,000 5.82%, 9/21/95 61,178,087
American Express Credit Corp.
13,000 5.85%, 9/19/95 12,831,000
55,000 5.90%, 10/16/95 54,035,514
5,000 5.82%, 2/2/96 4,825,400
American Home Food Products
9,000 6.00%, 7/20/95 8,971,500
4,368 5.90%, 7/27/95 4,349,387
14,000 5.97%, 8/10/95 13,907,133
11,500 5.91%, 8/30/95 11,386,725
American Home Products Corp.
21,000 6.00%, 7/12/95 20,961,500
7,000 6.00%, 7/20/95 6,977,833
30,000 5.95%, 7/27/95 29,871,083
6,500 5.98%, 7/27/95 6,471,927
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.

<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL MONEYMART ASSETS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Commercial Paper - Domestic (cont'd.)
American Home Products Corp.
$5,000 5.97%, 8/3/95 $ 4,972,638
86,000 5.97%, 8/10/95 85,429,533
5,000 5.95%, 8/31/95 4,949,590
18,000 5.95%, 9/1/95 17,815,550
Aristar, Inc.
20,970 6.02%, 7/5/95 20,955,973
Asset Securitization Cooperative
Corp.
20,000 5.83%, 9/20/95 19,737,650
Associates Corp. of North America
20,000 6.00%, 7/5/95 19,986,667
52,000 5.96%, 8/2/95 51,724,516
89,000 5.96%, 8/3/95 88,513,763
48,000 5.91%, 8/30/95 47,527,200
AT & T Capital Corp.
9,000 5.83%, 9/8/95 8,899,433
AT & T Corp.
28,000 5.83%, 9/12/95 27,668,986
Bank of New York Co., Inc.
11,000 5.98%, 7/5/95 10,992,691
Caterpillar Financial Services
8,700 5.92%, 9/14/95 8,592,700
Chrysler Financial Corp.
40,000 6.15%, 7/10/95 39,938,500
CIT Group Holdings, Inc.
42,000 6.00%, 7/5/95 41,972,000
71,000 5.90%, 9/11/95 70,162,200
28,000 5.85%, 9/18/95 27,640,550
Coca-Cola Enterprises, Inc.
10,000 6.00%, 7/7/95 9,990,000
13,000 6.00%, 11/3/95 12,729,167
Corporate Receivables Corp.
19,000 6.02%, 7/19/95 18,942,810
Countrywide Funding Corp.
4,000 5.96%, 7/20/95 3,987,418
20,000 6.02%, 7/25/95 19,919,733
10,000 6.02%, 7/27/95 9,956,522
25,000 6.00%, 7/28/95 24,887,500
8,000 6.02%, 7/28/95 7,963,880
33,000 6.01%, 7/31/95 32,834,725
Dean Witter, Discover & Co.
18,000 5.97%, 7/5/95 17,988,060
Duracell, Inc.
$10,000 5.98%, 8/11/95 $ 9,931,894
Finova Capital Corp.
12,000 6.12%, 7/11/95 11,979,600
5,000 6.05%, 7/12/95 4,990,757
10,000 6.08%, 7/12/95 9,981,422
15,000 6.07%, 7/17/95 14,959,533
55,000 6.05%, 7/20/95 54,824,382
6,570 6.05%, 7/27/95 6,541,293
5,000 6.03%, 8/1/95 4,974,038
3,460 5.98%, 8/2/95 3,441,608
4,000 6.01%, 8/2/95 3,978,631
10,000 6.01%, 8/3/95 9,944,908
10,439 6.02%, 8/7/95 10,374,412
4,000 6.01%, 8/10/95 3,973,289
3,561 6.02%, 8/11/95 3,536,585
5,500 6.00%, 8/21/95 5,453,250
Ford Motor Credit Corp.
12,000 6.11%, 7/12/95 11,977,597
307,000 5.95%, 7/14/95 306,340,376
General Electric Capital Corp.
50,000 6.05%, 10/17/95 49,092,500
132,000 6.05%, 10/18/95 129,582,017
15,000 6.53%, 10/30/95 14,670,779
38,000 6.53%, 10/31/95 37,159,081
General Motors Acceptance Corp.
241,805 6.15%, 7/12/95 241,350,608
59,235 6.15%, 7/13/95 59,113,568
5,076 6.00%, 7/17/95 5,062,464
GTE Finance Corp.
6,000 5.99%, 7/19/95 5,982,030
7,000 5.98%, 8/11/95 6,952,326
Hertz Corp.
6,000 5.86%, 9/18/95 5,922,843
Household Finance Corp.
36,000 5.82%, 9/26/95 35,493,660
IBM Credit Corp.
100,000 5.89%, 9/1/95 98,985,611
ITT Corp.
32,000 6.00%, 7/11/95 31,946,667
ITT Financial Corp.
8,500 6.00%, 7/14/95 8,481,583
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements.

<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL MONEYMART ASSETS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Commercial Paper - Domestic (cont'd.)
ITT Hartford Group, Inc.
$49,000 5.96%, 7/14/95 $ 48,894,541
8,000 6.00%, 7/27/95 7,965,333
McKenna Triangle National Corp.
16,000 5.90%, 7/27/95 15,931,822
13,000 5.98%, 7/27/95 12,943,854
11,000 5.97%, 8/1/95 10,943,451
29,724 5.96%, 8/3/95 29,561,608
13,000 5.90%, 9/15/95 12,838,078
Merrill Lynch & Co., Inc.
14,000 5.97%, 8/3/95 13,923,385
Monsanto Co.
6,000 6.25%, 8/18/95 5,950,000
5,000 5.97%, 10/30/95 4,899,671
Morgan (J.P.) & Co., Inc.
10,000 6.07%, 7/31/95 9,949,417
Morgan Stanley Group, Inc.
50,000 6.12%, 7/6/95 49,957,500
23,000 5.85%, 10/2/95 22,652,413
Norwest Financial, Inc.
24,000 6.00%, 7/5/95 23,984,000
NYNEX Corp.
15,000 5.97%, 9/28/95 14,778,613
Pennsylvania Power & Light Energy
15,000 5.95%, 7/17/95 14,960,333
11,149 6.02%, 7/20/95 11,113,577
PNC Funding Corp.
41,000 5.96%, 8/18/95 40,674,187
Preferred Receivables Funding
Corp.
14,100 6.02%, 7/11/95 14,076,422
6,000 5.92%, 8/30/95 5,940,800
4,000 5.85%, 9/20/95 3,947,350
Sears Roebuck Acceptance Corp.
23,000 5.98%, 7/10/95 22,965,615
21,000 5.98%, 7/11/95 20,965,117
Sherwood Medical Co.
19,000 5.98%, 7/27/95 18,917,941
WCP Funding Inc.
19,000 5.95%, 8/15/95 18,858,688
Whirlpool Corp.
$26,000 5.97%, 7/10/95 $ 25,961,195
Whirlpool Financial Corp.
42,000 6.05%, 7/21/95 41,858,833
Xerox Corp.
26,000 5.82%, 9/14/95 25,684,750
--------------
Total Commercial Paper - Domestic
(amortized cost $2,820,978,425) 2,820,978,425
- ------------------------------------------------------------
Commercial Paper - Foreign--6.9%
American Honda Finance Corp.
8,000 6.05%, 7/31/95 7,959,667
6,000 5.95%, 8/23/95 5,947,442
12,000 6.00%, 8/23/95 11,894,000
20,000 5.88%, 9/5/95 19,784,400
BHF Finance, Inc.
50,000 5.80%, 9/25/95 49,307,222
Bradford & Bingley Building
Society
25,000 5.90%, 9/13/95 24,696,806
22,000 5.81%, 9/26/95 21,691,102
Bridgestone/Firestone, Inc.
15,000 6.00%, 7/12/95 14,972,500
Cheltenham & Gloucester Bldg.
Society
6,000 6.02%, 7/20/95 5,980,937
25,000 6.02%, 7/21/95 24,916,389
Commerzbank U. S. Finance Inc.
4,700 5.92%, 8/28/95 4,655,172
Fundex Corp.
6,233 6.00%, 7/10/95 6,223,651
Halifax Building Society
20,000 5.81%, 9/11/95 19,767,600
Hanson Finance (U.K.) Plc.
26,500 6.07%, 7/6/95 26,477,659
6,584 5.90%, 8/30/95 6,519,257
14,000 5.88%, 9/11/95 13,835,360
5,000 5.83%, 9/19/95 4,935,222
22,000 5.90%, 9/21/95 21,704,344
14,000 5.83%, 9/22/95 13,811,821
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements.

<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL MONEYMART ASSETS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Commercial Paper - Foreign (cont'd.)
Leeds Permanent Building Society
$7,000 6.07%, 7/7/95 $ 6,992,918
Maguire/Thomas Partners
30,000 6.00%, 7/17/95 29,920,000
National Australia Funding
Delaware, Inc.
26,000 6.35%, 8/4/95 25,844,072
Paribas Finance, Inc.
37,000 5.94%, 7/26/95 36,847,375
22,000 6.00%, 8/1/95 21,886,333
23,000 5.84%, 9/28/95 22,667,931
Province of Quebec
25,000 5.83%, 9/26/95 24,647,771
--------------
Total Commercial Paper - Foreign
(amortized cost $473,886,951) 473,886,951
- ------------------------------------------------------------
Corporate Bonds--1.1%
Associates Corp. of North America
7,000 8.80%, 3/1/96 7,104,636
AT & T Capital Corp.
5,000 6.27%, 7/5/96 5,011,903
Atlantic Richfield Co.
14,000 10.375%, 7/15/95 14,019,713
CIT Group Holdings, Inc.
5,000 4.75%, 3/15/96 4,960,315
General Motors Acceptance Corp.
4,640 6.75%, 5/17/96 4,660,958
4,275 8.80%, 7/8/96 4,392,990
Northern Trust Co.
34,000 6.60%, 11/17/95 34,040,267
--------------
Total Corporate Bonds
(amortized cost $74,190,782) 74,190,782
- ------------------------------------------------------------
U.S. Government & Agency Obligations--2.1%
Federal Farm Credit Bank
47,000 5.60%, 7/1/96 46,951,471
Federal Home Loan Bank
48,000 6.05%, 6/13/96 48,026,799
Federal National Mortgage
Association
$49,000 5.71%, 6/10/96 $ 48,866,803
--------------
Total U.S. Government & Agency
Obligations
(amortized cost $143,845,073) 143,845,073
- ------------------------------------------------------------
Loan Participations--0.2%
Morgan Stanley Group, Inc.
13,627 6.08%, 7/7/95
(amortized cost $13,627,000) 13,627,000
- ------------------------------------------------------------
Medium-Term Obligations--1.1%
Bayerische Hypo Und Wechsel Bank
29,000 6.376%, 4/24/96 28,982,999
Ford Motor Credit Corp.
5,000 5.15%, 3/18/96 4,954,045
6,000 5.00%, 3/25/96 5,937,418
Westdeutsche Landesbank
Girozentrale
33,300 6.85%, 3/1/96 33,334,492
--------------
Total Medium -Term Obligations
(amortized cost $73,208,954) 73,208,954
- ------------------------------------------------------------
Repurchase Agreements--0.7%
Smith Barney Shearson, Inc.,
16,000 5.98%, dated 6/5/95, due 7/5/95
in the amount of $16,079,733
(cost $16,000,000; the value of
the collateral including accrued
interest is $16,320,000) 16,000,000
31,000 6.00%, dated 6/9/95, due 7/10/95
in the amount of $31,160,167
(cost $31,000,000; the value of
the collateral including accrued
interest is $31,620,001) 31,000,000
--------------
Total Repurchase Agreements
(amortized cost $47,000,000) 47,000,000
- ------------------------------------------------------------
Time Deposits--Eurodollar--7.6%
Dai-Ichi Kangyo Bank, Ltd.
250,000 6.375%, 7/5/95 250,000,000
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements.

<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL MONEYMART ASSETS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Time Deposits--Eurodollar (cont'd.)
Mitsubishi Bank
$54,418 6.375%, 7/3/95 $ 54,418,000
75,000 6.1875%, 7/7/95 75,000,000
Mitsubishi Bank Ltd.
89,000 6.125%, 7/12/95 89,000,000
50,000 6.0625%, 7/14/95 50,000,000
--------------
Total Time Deposits--Eurodollar
(amortized cost $518,418,000) 518,418,000
- ------------------------------------------------------------
Variable Rate InstrumentsD--17.9%
American Express Centurion Bank
29,000 6.0625%, 7/5/95 28,999,729
5,000 6.0625%, 7/17/95 4,999,370
51,000 6.0625%, 7/19/95 50,999,167
13,000 6.0625%, 7/28/95 12,999,683
Beneficial Corp.
73,000 6.04045%, 7/19/95 72,997,534
General Electric Capital Corp.
95,000 6.03125%, 7/26/95 95,000,000
General Motors Acceptance Corp.
21,000 6.235%, 7/5/95 21,000,423
Goldman, Sachs & Co.
345,000 6.1875%, 11/27/95 345,000,000
Lehman Brothers Holdings, Inc.
162,000 6.2625%, 7/21/95 162,000,000
Merrill Lynch & Co., Inc.
83,000 6.0725%, 7/5/95 82,995,874
65,000 6.0725%, 7/24/95 64,997,117
Money Market Auto Loan Trust
122,700 6.235%, 7/17/95 122,700,000
Morgan Stanley Group, Inc.
55,000 6.375%, 7/17/95 55,000,000
10,000 6.34879%, 7/19/95 10,000,000
95,000 6.25%, 8/15/95 95,000,000
--------------
Total Variable Rate Instruments
(amortized cost $1,224,688,897) 1,224,688,897
Total Investments--101.6%
(amortized cost $6,947,210,311*) $6,947,210,311
Liabilities in excess of other
assets--(1.6%) (108,357,706)
--------------
Net Assets--100% $6,838,852,605
--------------
--------------
</TABLE>
- ---------------
* The cost of securities for federal income tax purposes is
substantially the same as for financial reporting
purposes.
D For the purposes of amortized cost valuation, the maturity
date of these instruments is considered to be the earliest
of the next date on which the security can be redeemed at
par or the next date on which the rate of interest is
adjusted.
The industry classification of portfolio holdings and net liabilities shown
as a percentage of net assets as of June 30, 1995 was as follows:

<TABLE>
<S> <C>
Commercial Banks.................................... 37.2%
Personal Credit Institutions........................ 17.0
Security Brokers & Dealers.......................... 14.3
Business Credit (Finance)........................... 11.2
Pharmaceuticals..................................... 4.5
Asset Backed Securities............................. 4.2
Bank Holding Companies-Domestic..................... 2.4
U.S. Government & Agency Obligations................ 2.1
Mortgage Banks...................................... 1.4
Finance Lessors..................................... 1.4
Cigarettes.......................................... 1.3
Telephone & Communications.......................... 1.0
Household Appliances................................ 1.0
Financial Services.................................. 0.8
Electrical Services................................. 0.4
Foreign Government.................................. 0.4
Beverages........................................... 0.3
Petroleum Refining.................................. 0.2
Chemical & Allied Products.......................... 0.2
Misc. Electrical Equip.............................. 0.2
Automotive Rent & Lease............................. 0.1
------
101.6
Liabilities in excess of other assets............... (1.6)
------
100.0%
------
------
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements.

<PAGE>
Statement of Assets and Liabilities (Unaudited) PRUDENTIAL MONEYMART ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets June 30, 1995
Investments, at value....................................................................................... $6,947,210,311
Cash........................................................................................................ 127,242
Receivable for Fund shares sold............................................................................. 89,049,273
Interest receivable......................................................................................... 23,551,763
Deferred expenses and other assets.......................................................................... 263,949
--------------
Total assets............................................................................................. 7,060,202,538
--------------
Liabilities
Payable for Fund shares reacquired.......................................................................... 118,130,325
Payable for investments purchased........................................................................... 93,489,130
Dividends payable........................................................................................... 5,613,697
Accrued expenses............................................................................................ 2,064,966
Management fee payable...................................................................................... 1,683,089
Distribution fee payable.................................................................................... 368,726
--------------
Total liabilities........................................................................................ 221,349,933
--------------
Net Assets.................................................................................................. $6,838,852,605
--------------
--------------
Net assets were comprised of:
Common stock, at par ($.10 par value; 15,000,000,000 shares authorized for issuance)..................... $ 683,885,261
Paid-in capital in excess of par......................................................................... 6,154,967,344
--------------
Net assets at June 30, 1995................................................................................. $6,838,852,605
--------------
--------------
Net asset value, offering price and redemption price per share
($6,838,852,605 / 6,838,852,605 shares of common stock issued and outstanding.).......................... $1.00
=====
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements.

<PAGE>
PRUDENTIAL MONEYMART ASSETS
Statement of Operations
(Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
June 30,
Net Investment Income 1995
------------
<S> <C>
Income
Interest................................... $202,005,567
------------
Expenses
Management fee............................. 9,970,947
Distribution fee........................... 4,098,511
Transfer agent's fees and expenses......... 7,930,000
Reports to shareholders.................... 477,000
Custodian's fees and expenses.............. 218,000
Registration fees.......................... 116,000
Insurance expense.......................... 79,500
Directors' fees............................ 36,000
Audit fee.................................. 18,000
Legal fees................................. 15,000
Miscellaneous.............................. 42,025
------------
Total expenses.......................... 23,000,983
------------
Net investment income......................... 179,004,584
Net Realized Gain on Investments
Net realized gain on investment
transactions............................... 506,682
------------
Net Increase in Net Assets
Resulting from Operations..................... $179,511,266
------------
------------
</TABLE>

PRUDENTIAL MONEYMART ASSETS
Statement of Changes in
Net Assets (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Increase (Decrease) Ended Year Ended
in Net Assets June 30, 1995 December 31, 1994
---------------- ----------------
<S> <C> <C>
Operations
Net investment income... $ 179,004,584 $ 258,277,123
Net realized gain on
investment
transactions......... 506,682 147,440
---------------- ----------------
Net increase in net
assets resulting from
operations........... 179,511,266 258,424,563
---------------- ----------------
Dividends and distributions
to shareholders......... (179,511,266) (258,424,563)
---------------- ----------------
Fund share transactions
(at $1 per share)
Proceeds from shares
subscribed........... 14,469,631,511 26,869,523,481
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 167,751,620 245,955,917
Cost of shares
reacquired........... (14,343,410,569) (27,889,232,548)
---------------- ----------------
Net increase (decrease)
in net assets from
Fund share
transactions......... 293,972,562 (773,753,150)
---------------- ----------------
Total increase
(decrease).............. 293,972,562 (773,753,150)
Net Assets
Beginning of period........ 6,544,880,043 7,318,633,193
---------------- ----------------
End of period.............. $ 6,838,852,605 $ 6,544,880,043
---------------- ----------------
---------------- ----------------
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements.

<PAGE>
Notes to Financial Statements (Unaudited) PRUDENTIAL MONEYMART ASSETS
- --------------------------------------------------------------------------------
Prudential-Bache MoneyMart Assets Inc., doing business as Prudential MoneyMart
Assets (the ``Fund''), is registered under the Investment Company Act of 1940 as
a diversified, open-end management investment company. The Fund invests
primarily in a portfolio of money market instruments maturing in thirteen months
or less whose ratings are within the two highest rating categories by a
nationally recognized statistical rating organization or, if not rated, are of
comparable quality. The ability of the issuers of the securities held by the
Fund to meet their obligations may be affected by economic developments in a
specific industry or region.
- ------------------------------------------------------------
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuations: Portfolio securities are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of the difference between the principal amount due at
maturity and cost.
Securities Transactions and Investment Income: Security transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis. The cost of portfolio securities for federal income tax purposes
is substantially the same as for financial reporting purposes.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income to its shareholders.
Therefore, no federal income tax provision is required.
Dividends and Distributions: All of the Fund's net investment income and net
realized gains or losses, if any, are declared as dividends daily to the
shareholders of record at the time of such declaration. Net investment income of
the Fund consists of interest accrued and discount earned less estimated
expenses applicable to the dividend period. Payment of dividends is made
monthly.
- ------------------------------------------------------------
Note 2. Management and Distribution Agreements
The Fund has a management agreement with Prudential Mutual Fund Management, Inc.
(``PMF''). Pursuant to this agreement, PMF has responsibility for all investment
advisory services and supervises the subadviser's performance of such services.
PMF has entered into a subadvisory agreement with The Prudential Investment
Corporation (``PIC''); PIC furnishes investment advisory services in connection
with the management of the Fund. PMF pays for the cost of the subadviser's
services, the compensation of officers of the Fund, occupancy and certain
clerical and bookkeeping costs of the Fund. The Fund bears all other costs and
expenses.
The management fee paid PMF is computed daily and payable monthly, at an annual
rate of .50 of 1% of the Fund's average monthly net assets up to $50 million and
.30 of 1% of the Fund's average monthly net assets in excess of $50 million.
The Fund has a distribution agreement with Prudential Mutual Fund Distributors,
Inc. (``PMFD''). To reimburse PMFD for its expenses incurred pursuant to a plan
of distribution, the Fund pays PMFD a reimbursement, accrued daily and payable
monthly at an annual rate of .125 of 1% of the Fund's average daily net assets.
PMFD pays various broker-dealers, including Prudential Securities Incorporated
(``PSI'') and Pruco Securities Corporation, affiliated broker-dealers, for
account servicing fees and other expenses incurred by such broker-dealers.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
- ------------------------------------------------------------
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services, Inc. (``PMFS''), a wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent. During the six months ended June 30,
1995, the Fund incurred fees of approximately $7,736,500 for the services of
PMFS. As of June 30, 1995, approximately $1,301,200 of such fees were due to
PMFS. Transfer agent fees and expenses in the Statement of Operations include
certain out-of-pocket expenses paid to non-affiliates.
- --------------------------------------------------------------------------------
- -----

These financial statements are unaudited and reflect all adjustments (consisting
only of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the results for the interim period
presented.

<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL MONEYMART ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, -------------------------------------------------------
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
------------ ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net realized gains........ .027 .037 .027 .035 .058
Dividends and distributions to shareholders......... (.027) (.037) (.027) (.035) (.058)
------------ ---------- ---------- ---------- ----------
Net asset value, end of period...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ---------- ---------- ---------- ----------
------------ ---------- ---------- ---------- ----------
TOTAL RETURN(b)..................................... 2.75% 3.72% 2.70% 3.59% 5.95%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)..................... $6,838,853 $6,544,880 $7,318,633 $6,703,281 $7,138,159
Average net assets (000)............................ $6,611,965 $7,071,381 $7,742,989 $7,116,739 $7,763,251
Ratios to average net assets:
Expenses, including distribution fee.............. .70%(a) .71% .71% .66% .68%
Expenses, excluding distribution fee.............. .58%(a) .58% .58% .54% .56%
Net investment income............................. 5.46%(a) 3.65% 2.63% 3.43% 5.72%
<CAPTION>
1990
<S> <C>
----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................ $ 1.000
Net investment income and net realized gains........ .077
Dividends and distributions to shareholders......... (.077)
----------
Net asset value, end of period...................... $ 1.000
----------
----------
TOTAL RETURN(b)..................................... 8.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)..................... $7,411,932
Average net assets (000)............................ $8,262,329
Ratios to average net assets:
Expenses, including distribution fee.............. .73%
Expenses, excluding distribution fee.............. .60%
Net investment income............................. 7.62%
</TABLE>

- ---------------
(a) Annualized.
(b) Total return is calculated assuming a purchase of shares on the first
day and a sale on the last day of each period reported and includes
reinvestment of dividends and distributions. Total returns for periods
for less than a full year are not annualized.

- --------------------------------------------------------------------------------
See Notes to Financial Statements.

<PAGE>

Prudential MoneyMart Assets

- --------------------------------------------------------------------------------
Prospectus dated February 28, 1995
- --------------------------------------------------------------------------------

Prudential-Bache MoneyMart Assets Inc., doing business as Prudential MoneyMart
Assets (the Fund), is an open-end, diversified, management investment company,
or mutual fund. Its investment objective is maximum current income consistent
with stability of capital and the maintenance of liquidity. The Fund seeks to
achieve this objective by investing primarily in a portfolio of money market
instruments maturing in thirteen months or less. There can be no assurance that
the Fund's investment objective will be achieved. See "How the Fund
Invests--Investment Objective and Policies."

The Fund's address is One Seaport Plaza, New York, New York 10292, and its
telephone number is (800) 225-1852.

An investment in the Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share. See "How the Fund Values Its
Shares."

- --------------------------------------------------------------------------------
Investors are advised to read this Prospectus and retain it for future
reference.
- --------------------------------------------------------------------------------

<PAGE>

FUND HIGHLIGHTS

The following summary is intended to highlight certain information
contained in this Prospectus and is qualified in its entirety by the more
detailed information appearing elsewhere herein.

What is Prudential MoneyMart Assets?

Prudential MoneyMart Assets is a mutual fund. A mutual fund pools the
resources of investors by selling its shares to the public and investing the
proceeds of such sale in a portfolio of securities designed to achieve its
investment objective. Technically, the Fund is an open-end, diversified
management investment company.

What is the Fund's Investment Objective?

The Fund's investment objective is maximum current income consistent with
stability of capital and the maintenance of liquidity. The Fund invests
primarily in a portfolio of money market instruments maturing in thirteen months
or less. There can be no assurance that the Fund's investment objective will be
achieved. See "How the Fund Invests--Investment Objective and Policies" at
page 6.

Risk Factors and Special Characteristics

It is anticipated that the net asset value (NAV) of the Fund will remain
constant at $1.00 per share, although this cannot be assured. In order to
maintain such constant net asset value, the Fund will value its portfolio
securities at amortized cost. While this method provides certainty in valuation,
it may result in periods during which the value of a security in the
Fund's portfolio, as determined by amortized cost, is higher or lower than the
price the Fund would receive if it sold such security. See "How the Fund Values
its Shares" at page 12.

Who Manages the Fund?

Prudential Mutual Fund Management, Inc. (PMF or the Manager) is the Manager
of the Fund and is compensated for its services at an annual rate of .50 of 1%
of the Fund's average daily net assets up to $50 million and .30 of 1% of the
Fund's average daily net assets in excess of $50 million. As of January 31,
1995, PMF served as manager or administrator to 69 investment companies,
including 39 mutual funds, with aggregate assets of approximately $45 billion.
The Prudential Investment Corporation (PIC or the Subadviser) furnishes
investment advisory services in connection with the management of the Fund under
a Subadvisory Agreement with PMF. See "How the Fund is Managed--Manager" at
page 9.

Who Distributes the Fund's Shares?

Prudential Mutual Fund Distributors, Inc. (PMFD) acts as the Distributor of
the Fund's shares. The Fund reimburses PMFD for expenses related to the
distribution of the Fund's shares at an annual rate of up to .125 of 1% of the
average daily net assets of the Fund. See "How the Fund is Managed--Distributor"
at page 10.

<PAGE>

What Is the Minimum Investment?

The minimum initial investment is $1,000. The minimum subsequent investment
is $100. Prudential Securities reserves the right to impose a higher minimum
subsequent amount from time to time as it may deem appropriate. There is no
minimum investment requirement for certain retirement and employee savings plans
or custodial accounts for the benefit of minors. For purchases made through the
Automatic Savings Accumulation Plan, the minimum initial and subsequent
investment is $50. See "Shareholder Guide--How to Buy Shares of the Fund" at
page 14 and "Shareholder Guide--Shareholder Services" at page 20.

How Do I Purchase Shares?

You may purchase shares of the Fund through Prudential Securities
Incorporated (Prudential Securities or PSI), Pruco Securities Corporation
(Prusec) or directly from the Fund through its transfer agent, Prudential Mutual
Fund Services, Inc. (PMFS or the Transfer Agent), at the NAV next determined
after receipt of your purchase order by the Transfer Agent or Prudential
Securities. See "How the Fund Values its Shares" at page 12 and "Shareholder
Guide--How to Buy Shares of the Fund" at page 14.

How Do I Sell My Shares?

You may redeem shares of the Fund at any time at the NAV next determined
after Prudential Securities or the Transfer Agent receives your sell order. See
"Shareholder Guide--How to Sell Your Shares" at page 17.

How Are Dividends and Distributions Paid?

The Fund expects to declare daily and pay monthly dividends of net
investment income. Dividends will be automatically reinvested in additional
shares of the Fund at NAV unless you request that they be paid to you in cash.
See "Taxes, Dividends and Distributions" at page 12.

<PAGE>

FUND EXPENSES

Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases .......................... None
Maximum Sales Load Imposed on Reinvested Dividends ............... None
Deferred Sales Load .............................................. None
Redemption Fees .................................................. None
Exchange Fee ..................................................... None

Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees .................................................. .301%
12b-1 Fees ....................................................... .125%
Other Expenses ................................................... .281%
Total Fund Operating Expenses .................................... .707%

<TABLE>
<CAPTION>
1 3 5 10
Example year years years 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: $7 $23 $39 $88
</TABLE>

The above example is based on data for the Fund's fiscal year ended December 31,
1994. The example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.

The purpose of the table is to assist an investor in understanding the various
costs and expenses that an investor in the Fund will bear, whether directly or
indirectly. For more complete descriptions of the various costs and expenses,
see "How the Fund is Managed." "Other Expenses" includes operating expenses of
the Fund, such as directors' and professional fees, registration fees, reports
to shareholders and transfer agency and custodian fees.

<PAGE>

FINANCIAL HIGHLIGHTS
(for a share of capital stock outstanding throughout each year indicated)

The following information, with respect to the five-year period ended
December 31, 1994, has been audited by Deloitte & Touche LLP, independent
accountants, whose report thereon was unqualified. This information should be
read in conjunction with the financial statements and notes thereto, which
appear in the Statement of Additional Information. The following financial
highlights contain selected data for a share of capital stock outstanding, total
return, ratios to average net assets and other supplemental data for the years
indicated. This information is based on data contained in the financial
statements.

Year ended December 31,
-----------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of year ..................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income and net
realized gains .............. .037 .027 .035 .058 .077 .086 .069 .061 .063 .076
Dividends and distributions ... (.037) (.027) (.035) (.058) (.077) (.086) (.069) (.061) (.063) (.076)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year .. $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ======

Total Return+:................. 3.72% 2.70% 3.59% 5.95% 8.00% 8.96% 7.11% 6.33% 6.48% 7.92%
==== ==== ==== ==== ==== ==== ==== ==== ==== ====

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) .$6,544,880 7,318,633 6,703,281 7,138,159 7,411,932 8,168,972 5,240,662 4,620,542 3,875,978 3,306,841
Average net assets (000) ......$7,071,381 7,742,989 7,116,739 7,763,251 8,262,329 6,947,060 5,139,264 4,412,175 3,846,982 3,368,056

Ratios to average net assets:
Expenses, including
distribution fee ............ .71% .71% .66% .68% .73% .69% .71% .69% .64% .62%
Expenses, excluding
distribution fee ............ .58% .58% .54% .56% .60% .57% .58% .57% .52% .49%
Net investment income ......... 3.65% 2.63% 3.43% 5.72% 7.62% 8.57% 6.98% 6.06% 6.22% 7.76%

- --------------------
<FN>
+ Total return is calculated assuming a purchase of shares on the first day and
a sale on the last day of each period reported and includes reinvestment of
dividends and distributions.
</FN>

</TABLE>
5

<PAGE>

CALCULATION OF YIELD

The Fund calculates its "current yield" based on the net change, exclusive
of realized and unrealized gains or losses, in the value of a hypothetical
account over a seven calendar day base period. The Fund also calculates its
"effective annual yield" assuming weekly compounding. The following is an
example of the current and effective annual yield calculations as of December
31, 1994:

Value of hypothetical account at end of period............... $1.001013253
Value of hypothetical account at beginning of period......... 1.000000000
-----------
Base period return........................................... $ .001013253
============
Current yield ($.001013253 X (365/7))........................ 5.28%
Effective annual yield, assuming weekly compounding.......... 5.43%

The yield will fluctuate from time to time and does not indicate future
performance.

The weighted average life to maturity of the Fund's portfolio on December
31, 1994 was 31 days.

Yield is computed in accordance with a standardized formula described in
the Statement of Additional Information. In addition, comparative performance
information may be used from time to time in advertising or marketing the Fund's
shares, including data from Lipper Analytical Services, Inc., Morningstar
Publications, Inc., IBC/Donoghue's Money Fund Report, The Bank Rate Monitor,
other industry publications, business periodicals and market indices.

HOW THE FUND INVESTS

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund is maximum current income consistent
with stability of capital and the maintenance of liquidity. The Fund invests
primarily in a portfolio of money market instruments maturing in thirteen months
or less. There can be no assurance that this objective will be achieved.

The Fund's investment objective is a fundamental policy and, therefore, may
not be changed without the approval of the holders of a majority of the Fund's
outstanding voting securities, as defined in the Investment Company Act of 1940,
as amended (the Investment Company Act). Policies that are not fundamental may
be modified by the Fund's Board of Directors.

The types of instruments utilized in seeking to accomplish this objective
include:

1. U.S. Treasury bills and other obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.

2. Obligations (including certificates of deposit and bankers' acceptances)
of (a) banks organized under the laws of the United States or any state thereof
(including foreign branches of such banks) or (b) U.S. branches of foreign banks
or (c) foreign banks and foreign branches thereof; provided that such banks
have, at the time of acquisition by the Fund of such obligations, total assets
of not less than $1 billion or its equivalent. The term "certificates of
deposit" includes both Eurodollar certificates of deposit, for which there is
generally a market, and Eurodollar time deposits, for which

<PAGE>

there is generally not a market. "Eurodollars" are U.S. dollars deposited
in banks outside the United States; the Fund invests in Eurodollar instruments
of foreign and domestic banks.

3. Commercial paper, variable amount demand master notes, bills, notes and
other obligations issued by a U.S. company, a foreign company or a foreign
government, its agencies or instrumentalities, maturing in thirteen months or
less, denominated in U.S. dollars, and, at the date of investment, rated at
least AA or A-2 by Standard & Poor's Ratings Group (S&P), Aa or Prime-2 by
Moody's Investors Service (Moody's) or AA or Duff 2 by Duff & Phelps Credit
Rating Co. (Duff and Phelps) or, if not rated, issued by an entity having an
outstanding unsecured debt issue rated at least AA or A-2 by S&P, Aa or Prime-2
by Moody's or AA or Duff 2 by Duff and Phelps. If such obligations are
guaranteed or supported by a letter of credit issued by a bank, such bank
(including a foreign bank) must meet the requirements set forth in the preceding
paragraph. If such obligations are guaranteed or insured by an insurance company
or other non-bank entity, such insurance company or other non-bank entity must
represent a credit of high quality, as determined by the Fund's investment
adviser under the supervision of the Fund's Board of Directors.

In selecting commercial paper and other corporate obligations for
investment by the Fund, the investment adviser considers ratings assigned by
major rating services, information concerning the financial history and
condition of the issuer and its revenue and expense prospects. The Board of
Directors monitors the credit quality of securities purchased for the Fund's
portfolio. If commercial paper or another corporate obligation held by the Fund
is assigned a lower rating or ceases to be rated, the investment adviser under
the supervision of the Board of Directors will promptly reassess whether that
security presents minimal credit risks and whether the Fund should continue to
hold the security in its portfolio. If a portfolio security presents greater
than minimal credit risks or is in default, the Fund will dispose of the
security as soon as reasonably practicable unless the Board of Directors
determines that to do so is not in the best interests of the Fund and its
shareholders.

The Fund utilizes the amortized cost method of valuation in accordance with
regulations issued by the Securities and Exchange Commission (SEC). See "How the
Fund Values its Shares." Accordingly, the Fund will limit its portfolio
investments to those instruments which present minimal credit risks and which
are of "eligible quality" as determined by the Fund's investment adviser under
the supervision of the Board of Directors. "Eligible quality," for this purpose,
means (i) a security rated in one of the two highest rating categories by at
least two major rating agencies assigning a rating to the security or issuer
(or, if only one agency assigned a rating, that agency) or (ii) an unrated
security deemed of comparable quality by the Fund's investment adviser under the
supervision of the Board of Directors. The purchase by the Fund of a security of
eligible quality that is rated by only one rating agency or is unrated must be
approved or ratified by the Board of Directors.

As long as the Fund utilizes the amortized cost method of valuation, it
will also comply with certain diversification requirements and will invest no
more than 5% of its total assets in "second-tier securities," with no more than
1% of its assets in any one issuer of a second-tier security. A "second-tier
security," for this purpose, is a security of eligible quality that does not
have the highest rating from at least two agencies assigning a rating to that
security or issuer (or, if only one agency assigned a rating, that agency) or an
unrated security that is deemed of comparable quality by the Fund's investment
adviser. The Fund will also maintain a dollar-weighted average portfolio
maturity of ninety days or less.

OTHER INVESTMENTS AND POLICIES

Repurchase Agreements

The Fund may on occasion enter into repurchase agreements whereby the
seller of a security agrees to repurchase that security from the Fund at a
mutually agreed-upon time and price. The period of maturity is usually quite
short, possibly overnight or a few days, although it may extend over a number of
months. The resale price is in excess of the

<PAGE>

purchase price, reflecting an agreed-upon rate of return effective for the
period of time the Fund's money is invested in the security. The Fund's
repurchase agreements will at all times be fully collateralized in an amount at
least equal to the purchase price, including accrued interest earned on the
underlying securities. The instruments held as collateral are valued daily, and
if the value of the instruments declines, the Fund will require additional
collateral. If the seller defaults and the value of the collateral securing the
repurchase agreement declines, the Fund may incur a loss. The Fund participates
in a joint repurchase account with other investment companies managed by
Prudential Mutual Fund Management, Inc. pursuant to an order of the SEC.

Liquidity Puts

The Fund also may purchase instruments of the types described above
together with the right to resell the instruments at an agreed-upon price or
yield within a specified period prior to the maturity date of the instruments.
Such a right to resell is commonly known as a "put," and the aggregate price
that the Fund pays for instruments with a put may be higher than the price that
otherwise would be paid for the instruments.

Floating Rate and Variable Rate Securities

The Fund may purchase "floating rate" and "variable rate" obligations. The
interest rates on such obligations fluctuate generally with changes in market
interest rates, and in some cases the Fund is able to demand repayment of the
principal amount of such obligations at par plus accrued interest. For
additional information concerning variable rate and floating rate obligations,
see "Investment Objectives and Policies" in the Statement of Additional
Information.

Securities Lending

The Fund may lend its portfolio securities to brokers or dealers, banks or
other recognized institutional borrowers of securities, provided that the
borrower at all times maintains cash collateral in an amount equal to at least
100% of the market value of the securities loaned. During the time portfolio
securities are on loan, the borrower will pay the Fund an amount equivalent to
any interest paid on such securities and the Fund may invest the cash collateral
and earn additional income. As a matter of fundamental policy, the Fund cannot
lend more than 10% of the value of its total assets.

Risks of Investing in Foreign Securities

The portfolio may contain obligations of foreign banks and foreign branches
of foreign banks, U.S. branches of foreign banks and foreign branches of U.S.
banks, as well as commercial paper, bills, notes and other obligations issued in
the United States by foreign issuers, including foreign governments, their
agencies and instrumentalities. Accordingly, an investment in the Fund involves
certain additional risks. These risks include future political and economic
developments in the country of the issuer, the possible imposition of
withholding taxes on interest income payable on such obligations held by the
Fund, the possible seizure or nationalization of foreign deposits and the
possible establishment of exchange controls or other foreign governmental laws
or restrictions which might affect adversely the payment of principal and
interest on such obligations held by the Fund. In addition, there may be less
publicly available information about a foreign issuer than about a domestic one,
and foreign issuers may not be subject to the same accounting, auditing and
financial recordkeeping standards and requirements as domestic issuers.
Securities issued by foreign issuers may be subject to greater fluctuations in
price than securities issued by U.S. entities. Finally, in the event of a
default with respect to any such foreign debt obligations, it may be more
difficult for the Fund to obtain or to enforce a judgment against the issuers of
such securities.

Illiquid Securities

The Fund may invest up to 10% of its net assets in illiquid securities
including securities with legal or contractual restrictions on resale
(restricted securities), securities that are not readily marketable in
securities markets either within

8
<PAGE>

or outside of the United States, privately placed commercial paper and
repurchase agreements which have a maturity of longer than seven days.
Restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933, as amended (the Securities Act), and privately placed
commercial paper that have a readily available market are not considered
illiquid for purposes of this limitation. The investment adviser will monitor
the liquidity of such restricted securities under the supervision of the Board
of Directors. Repurchase agreements subject to demand are deemed to have a
maturity equal to the applicable notice period.

Other Considerations

Although the Fund provides the advantage of diversification, there is still
an inherent market risk due to the nature of the investment. If interest rates
decline, then yield to shareholders will also decline. If there are unusually
heavy redemption requests because of changes in interest rates or for any other
reason, the Fund may have to sell a portion of its investment portfolio at a
time when it may be disadvantageous to do so. The Fund believes that its
borrowing provision for abnormally heavy redemption requests would help to
mitigate any adverse effects and would make the sale of its portfolio securities
unlikely. When a shareholder redeems shares, it is possible that the redemption
proceeds will be less than the amount invested.

INVESTMENT RESTRICTIONS

The Fund is subject to certain investment restrictions which, like its
investment objective, constitute fundamental policies. Fundamental policies
cannot be changed without the approval of the holders of a majority of the
Fund's outstanding voting securities, as defined in the Investment Company Act.
See "Investment Restrictions" in the Statement of Additional Information.

HOW THE FUND IS MANAGED

The Fund has a Board of Directors which, in addition to overseeing the
actions of the Fund's Manager, Subadviser and Distributor, as set forth below,
decides upon matters of general policy. The Fund's Manager conducts and
supervises the daily business operations of the Fund. The Fund's Subadviser
furnishes daily investment advisory services.

For the year ended December 31, 1994, the Fund's total expenses as a
percentage of average net assets were .71%. See "Financial Highlights."

MANAGER

Prudential Mutual Fund Management, Inc. (PMF or the Manager), One Seaport
Plaza, New York, New York 10292, is the Manager of the Fund and is compensated
for its services at an annual rate of .50 of 1% of the Fund's average daily net
assets up to $50 million and .30 of 1% of the Fund's average daily net assets in
excess of $50 million. PMF was incorporated in May 1987 under the laws of the
State of Delaware. For the fiscal year ended December 31, 1994, the Fund paid a
management fee of .301% of the Fund's average net assets. See "Manager" in the
Statement of Additional Information.

As of January 31, 1995, PMF served as the manager to 39 open-end investment
companies, constituting all of the Prudential Mutual Funds, and as manager or
administrator to 30 closed-end investment companies with aggregate assets of
approximately $45 billion.

<PAGE>

Under the Management Agreement with the Fund, PMF manages the investment
operations of the Fund and also administers the Fund's corporate affairs. See
"Manager" in the Statement of Additional Information.

Under a Subadvisory Agreement between PMF and The Prudential Investment
Corporation (PIC or the Subadviser), PIC furnishes investment advisory services
in connection with the management of the Fund and is reimbursed by PMF for its
reasonable costs and expenses incurred in providing such services. Under the
Management Agreement, PMF continues to have responsibility for all investment
advisory services and supervises PIC's performance of such services.

PMF and PIC are wholly-owned subsidiaries of The Prudential Insurance
Company of America (Prudential), a major diversified insurance and financial
services company.

DISTRIBUTOR

Prudential Mutual Fund Distributors, Inc. (PMFD or the Distributor), One
Seaport Plaza, New York, New York 10292, is a corporation organized under the
laws of the State of Delaware and serves as the Distributor of the Fund. PMFD is
a wholly-owned subsidiary of PMF.

Under a Distribution and Service Plan (the Plan) adopted by the Fund under
Rule 12b-1 under the Investment Company Act and a distribution agreement (the
Distribution Agreement), the Distributor incurs the expenses of distributing the
shares of the Fund. These expenses include account servicing fees paid to, or on
account of, financial advisers of Prudential Securities Incorporated (Prudential
Securities or PSI) and representatives of Pruco Securities Corporation (Prusec),
affiliated broker-dealers, account servicing fees paid to, or on account of,
other broker-dealers or financial institutions (other than national banks) which
have entered into agreements with the Distributor, advertising expenses, the
cost of printing and mailing prospectuses to potential investors and indirect
and overhead costs of Prudential Securities and Prusec associated with the sale
of Fund shares, including lease, utility, communications and sales promotion
expenses. The State of Texas requires that shares of the Fund may be sold in
that state only by dealers or other financial institutions which are registered
there as broker-dealers.

Under the Plan, the Fund reimburses the Distributor for its
distribution-related expenses at an annual rate of up to .125 of 1% of the
Fund's average daily net assets. Account servicing fees are paid based on the
average balance of Fund shares held in accounts of customers of financial
advisers. The entire distribution fee may be used to pay account servicing fees.

For the fiscal year ended December 31, 1994, the Fund paid PMFD a
distribution fee equal on an annual basis to .125% of the average net assets of
the Fund.

The Plan provides that it shall continue in effect from year to year
provided that each such continuance is approved annually by a majority vote of
the Board of Directors, including a majority of the Directors who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreement related to the Plan.
The Directors are provided with and review quarterly reports of expenditures
under the Plan.

For the fiscal year ended December 31, 1994, PMFD incurred distribution
expenses in the aggregate of $8,839,226, all of which was recovered through the
distribution fee paid by the Fund. The Fund records all payments under the Plan
as expenses in the calculation of its net investment income.

In addition to distribution and service fees paid by the Fund under the
Plan, the Manager (or one of its affiliates) may make payments out of its own
resources to dealers and other persons which distribute shares of the Fund. Such
payments may be calculated by reference to the net asset value of shares sold by
such persons or otherwise.

<PAGE>

On October 21, 1993, PSI entered into an omnibus settlement with the SEC,
state securities regulators (with the exception of the Texas Securities
Commissioner, who joined the settlement on January 18, 1994) and the National
Association of Securities Dealers, Inc. (the NASD) to resolve allegations that
from 1980 through 1990 PSI sold certain limited partnership interests in
violation of securities laws to persons for whom such securities were not
suitable and misrepresented the safety, potential returns and liquidity of these
investments. Without admitting or denying the allegations asserted against it,
PSI consented to the entry of an SEC Administrative Order which stated that
PSI's conduct violated the federal securities laws, directed PSI to cease and
desist from violating the federal securities laws, pay civil penalties, and
adopt certain remedial measures to address the violations.

Pursuant to the terms of the SEC settlement, PSI agreed to the imposition
of a $10,000,000 civil penalty, established a settlement fund in the amount of
$330,000,000 and procedures to resolve legitimate claims for compensatory
damages by purchasers of the partnership interests. PSI has agreed to provide
additional funds, if necessary, for the purpose of the settlement fund. PSI's
settlement with the state securities regulators included an agreement to pay a
penalty of $500,000 per jurisdiction. PSI consented to a censure and to the
payment of a $5,000,000 fine in settling the NASD action.

In October 1994, a criminal complaint was filed with the United States
Magistrate for the Southern District of New York alleging that PSI committed
fraud in connection with the sale of certain limited partnership interests in
violation of federal securities laws. An agreement was simultaneously filed to
defer prosecution of these charges for a period of three years from the signing
of the agreement, provided that PSI complies with the terms of the agreement.
If, upon completion of the three year period, PSI has complied with the terms of
the agreement, no prosecution will be instituted by the United States for the
offenses charged in the complaint. If on the other hand, during the course of
the three year period, PSI violates the terms of the agreement, the U.S.
Attorney can then elect to pursue these charges. Under the terms of the
agreement, PSI agreed, among other things, to pay an additional $330,000,000
into the fund established by the SEC to pay restitution to investors who
purchased certain PSI limited partnership interests.

For more detailed information concerning the foregoing matters, see
"Distributor" in the Statement of Additional Information, a copy of which may
be obtained at no cost by calling 1-800-225-1852.

The Fund is not affected by PSI's financial condition and is an entirely
separate legal entity from PSI, which has no beneficial ownership therein and
the Fund's assets, which are held by State Street Bank and Trust Company, an
independent custodian, are separate and distinct from PSI.

PORTFOLIO TRANSACTIONS

Prudential Securities may act as a broker for the Fund, provided that the
commissions, fees or other remuneration it receives are fair and reasonable. See
"Portfolio Transactions" in the Statement of Additional Information.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, serves as Custodian for the Fund's portfolio securities and
cash and, in that capacity, maintains certain financial and accounting books and
records pursuant to an agreement with the Fund. Its mailing address is P.O. Box
1713, Boston, Massachusetts 02105.

Prudential Mutual Fund Services, Inc. (PMFS), Raritan Plaza One, Edison,
New Jersey 08837, serves as Transfer Agent and Dividend Disbursing Agent and, in
those capacities, maintains certain books and records for the Fund. PMFS is a
wholly-owned subsidiary of PMF. Its mailing address is P.O. Box 15005, New
Brunswick, New Jersey 08906-5005.

<PAGE>

HOW THE FUND VALUES ITS SHARES

The Fund's net asset value per share, or NAV, is determined by subtracting
its liabilities from the value of its assets and dividing the remainder by the
number of outstanding shares. The Board of Directors has fixed the specific time
of day for the computation of the Fund's NAV to be as of 4:30 P.M., New York
time, immediately after the declaration of dividends.

The Fund will compute its NAV once daily on days that the New York Stock
Exchange is open for trading except on days on which no orders to purchase, sell
or redeem Fund shares have been received or days on which changes in the value
of the Fund's portfolio securities do not materially affect the net asset value.
The New York Stock Exchange is closed on the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

The Fund determines the value of its portfolio securities by the amortized
cost method. This method involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium regardless of impact of fluctuating interest rates on the market value
of the instrument. While this method provides certainty in valuation, it may
result in periods during which the value of a security in the Fund's portfolio
as determined by amortized cost, is higher or lower than the price the Fund
would receive if it sold such security. During these periods, the yield to a
shareholder may differ somewhat from that which could be obtained from a similar
fund which marks its portfolio securities to the market each day. For example,
during periods of declining interest rates, if the use of the amortized cost
method resulted in a lower value of the Fund's portfolio on a given day, a
prospective investor in the Fund would be able to obtain a somewhat higher yield
and existing shareholders would receive correspondingly less income. The
converse would apply during periods of rising interest rates. The Board of
Directors has established procedures designed to stabilize, to the extent
reasonably possible, the NAV of the shares of the Fund at $1.00 per share. See
"Net Asset Value" in the Statement of Additional Information.

TAXES, DIVIDENDS AND DISTRIBUTIONS

Taxation of the Fund

The Fund has elected to qualify and intends to remain qualified as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(the Internal Revenue Code). Accordingly, the Fund will not be subject to
federal income taxes on its net investment income and capital gains, if any,
that it distributes to shareholders.

Taxation of Shareholders

All dividends out of net investment income, together with distributions of
short-term capital gains, will be taxable as ordinary income to the shareholders
whether or not reinvested. The Fund does not expect to realize long-term
capital gains or losses. In general, tax-exempt shareholders will not be
required to pay taxes on amounts distributed to them.

The Internal Revenue Code imposes a 4% nondeductible excise tax to the
extent the Fund does not meet certain minimum distribution requirements by the
end of each calendar year. For this purpose, dividends declared in October,
November or December and paid in the following January will be treated as having
been paid by the Fund and received by shareholders in such prior year. Under
this rule, a shareholder may be taxed in one year on dividends or distributions
actually received in January of the following year.

Shareholders are advised to consult their own tax advisers regarding
specific questions as to federal, state or local taxes. See "Taxes" in the
Statement of Additional Information.

<PAGE>

Withholding Taxes

Under the Internal Revenue Code, the Fund is required to withhold and remit
to the U.S. Treasury 31% of dividends, capital gain income and redemption
proceeds on the accounts of those shareholders who fail to furnish their tax
identification numbers on IRS Form W-9 (or IRS Form W-8 in the case of certain
foreign shareholders) with the required certifications regarding the
shareholder's status under the federal income tax law. However, dividends of net
investment income and short-term capital gains to a foreign shareholder will
generally be subject to U.S. withholding tax at the rate of 30% (or lower treaty
rate).

Dividends and Distributions

All of the Fund's net income is declared as dividends daily to the
shareholders of record at the time of such declaration. Unless otherwise
requested by the shareholder, such dividends are automatically invested monthly
in additional Fund shares at net asset value. Shareholders may receive cash
payments from the Fund equal to the dividends earned during the month by
completing the appropriate section on the application form or by notifying PMFS
at least five business days prior to the payable date. Cash distributions are
paid by check within five business days after the dividend payment date. In the
event that all of a shareholder's shares are redeemed on a date other than the
monthly dividend payment date, the proceeds of such redemption will equal the
net asset value of the shares redeemed plus the amount of all dividends declared
through the date of redemption. Because declared dividends remain invested by
the Fund until the dividend payment date of each month in the same manner as
funds invested in shares, the foregoing procedure results in income to
shareholders in substantially the same amounts as if dividends were reinvested
in shares on a daily basis.

The Fund's net income for dividend purposes is determined immediately prior
to the calculation of net asset value at 4:30 P.M., New York time. Thus, a
shareholder begins to earn dividends on the first business day after his or her
order becomes effective and continues to earn dividends through the day on which
his or her shares are redeemed. Net income of the Fund consists of interest
accrued and discount earned less the estimated expenses of the Fund and all
realized gains and losses on the portfolio securities of the Fund. Net income
earned on Saturdays, Sundays and holidays is accrued in calculating the dividend
on the previous business day. Accordingly, a shareholder who redeems his or her
shares effective as of 4:30 P.M., New York time, on a Friday earns a dividend
which reflects the income earned by the Fund on the following Saturday and
Sunday. On the other hand, an investor whose purchase order is effective as of
4:30 P.M., New York time, on a Friday does not begin earning dividends until the
following business day.

GENERAL INFORMATION
DESCRIPTION OF SHARES

The Fund was incorporated in Maryland on December 22, 1975. The authorized
capital stock of the Fund consists of 15 billion shares of Common Stock having a
par value of $.10 per share.

The Board of Directors of the Fund is authorized to classify or to
reclassify any unissued shares of the Fund. However, the Board may not
reclassify shares that are issued and outstanding, and it may not create a class
or series of stock which is prior to any class or series of stock outstanding
with respect to rights upon liquidation, dissolution or winding up, or
distribution of the assets of the Fund. Each of the Fund's outstanding shares
has equal dividend, distribution, liquidation and voting rights and is
redeemable at the option of the holder. Shares are also redeemable at the option
of the Fund under certain circumstances as described under "Shareholder
Guide--How to Sell Your Shares." There are no conversion, pre-emptive or
exchange rights in connection with any shares of the Fund, nor are there
cumulative voting rights. All shares are fully paid and nonassessable when
issued.

13
<PAGE>

The Fund does not intend to hold annual meetings of shareholders unless
otherwise required by law. The Fund will not be required to hold annual meetings
of shareholders unless, for example, the election of Directors is required to be
acted on by shareholders under the Investment Company Act. Shareholders have
certain rights, including the right to call a meeting upon a vote of 10% of the
Fund's outstanding shares for the purpose of voting on the removal of one or
more Directors or to transact any other business.

ADDITIONAL INFORMATION

This Prospectus, including the Statement of Additional Information which
has been incorporated by reference herein, does not contain all the information
set forth in the Registration Statement filed by the Fund with the SEC under the
Securities Act of 1933. Copies of the Registration Statement may be obtained at
a reasonable charge from the SEC or may be examined, without charge, at the
office of the SEC in Washington, D.C.

SHAREHOLDER GUIDE

HOW TO BUY SHARES OF THE FUND

You may purchase shares of the Fund through Prudential Securities, Prusec,
or directly from the Fund through its Transfer Agent, Prudential Mutual Fund
Services, Inc. (PMFS or the Transfer Agent), Attention: Investment Services,
P.O. Box 15020, New Brunswick, New Jersey 08906-5020. The minimum initial
investment is $1,000. The minimum subsequent investment is $100. Prudential
Securities reserves the right to impose a higher minimum subsequent amount from
time to time as it may deem appropriate. All minimum investment requirements
are waived for certain retirement and employee savings plans and custodial
accounts for the benefit of minors. For purchases made through the Automatic
Savings Accumulation Plan, the minimum initial and subsequent investment is $50.
See "Shareholder Services" below.

Shares of the Fund are sold, without a sales charge, at the NAV next deter-
mined after receipt and acceptance by PMFS of a purchase order and payment in
proper form (i.e., a check or Federal Funds wired to State Street Bank and Trust
Company (State Street), the Fund's custodian). See "How the Fund Values its
Shares." When payment is received by PMFS prior to 4:30 P.M., New York time, in
proper form, a share purchase order will be entered at the price determined as
of 4:30 P.M., New York time, on that day, and the shares purchased will begin to
earn dividends on the business day following such investment. See "Taxes,
Dividends and Distributions."

Application forms can be obtained from PMFS, Prudential Securities or
Prusec. If a stock certificate is desired, it must be requested in writing for
each transaction. Certificates are issued only for full shares. Shareholders who
hold their shares through Prudential Securities will not receive stock
certificates. Shareholders cannot utilize Expedited Redemption or Check
Redemption or have a Systematic Withdrawal Plan if they have been issued
certificates.

The Fund reserves the right, in its discretion, to reject any purchase
order (including an exchange into the Fund) or to suspend or modify the
continuous offering of its shares. See "How to Sell Your Shares" below.

Your dealer is responsible for forwarding payment promptly to the Fund. The
Distributor reserves the right to cancel any purchase order for which payment
has not been received by the fifth business day following the investment.

Transactions in Fund shares may be subject to postage and other charges
imposed by your dealer.

Purchases through Prudential Securities.

If you have an account with Prudential Securities (or open such an
account), you may ask Prudential Securities to purchase shares of the Fund on
your behalf. On the business day following confirmation that a free credit
balance (i.e.,

<PAGE>

immediately available funds) exists in your account, Prudential Securities, at
your request, will effect a purchase order for shares of the Fund in an amount
up to such balance at the NAV determined on that day. Funds held by Prudential
Securities on behalf of its clients in the form of free credit balances are
delivered to the Fund by Prudential Securities and begin earning dividends the
second business day after receipt of the order by Prudential Securities.
Accordingly, Prudential Securities will have the use of such free credit
balances during this period.

Shares of the Fund purchased by Prudential Securities on behalf of its
clients will be held by Prudential Securities as record holder. Prudential
Securities will therefore receive statements and dividends directly from the
Fund and will in turn provide investors with Prudential Securities account
statements reflecting purchases, redemptions and dividend payments. Although
Prudential Securities clients who purchase shares of the Fund through Prudential
Securities may not redeem shares of the Fund by check, Prudential Securities
provides its clients with alternative forms of immediate access to monies
invested in shares of the Fund.

Prudential Securities clients wishing additional information concerning
investment in Fund shares made through Prudential Securities should call their
Prudential Securities financial adviser.

Self-Directed Investment. Prudential Securities clients not electing
Autosweep may continue to place orders for the purchase of Fund shares through
Prudential Securities, subject to minimum initial and subsequent investment
requirements as described above.

A Prudential Securities client who has not elected Autosweep (Automatic
Investment) and who does not place a purchase order promptly after funds are
credited to his or her Prudential Securities account will have a free credit
balance with Prudential Securities and will not begin earning dividends on
shares of the Fund until the second business day after receipt of the order by
Prudential Securities from the client. Accordingly, Prudential Securities will
have the use of such free credit balances during this period.

Purchases through Prusec

You may purchase shares of the Fund by placing an order with your Prusec
representative accompanied by payment for the purchase price of such shares and,
in the case of a new account, a completed application form. You should also
submit an IRS Form W-9. The Prusec representative will then forward these items
to the Transfer Agent. See "Purchase by Mail" below.

Purchase by Wire

For an initial purchase of shares of the Fund by wire, you must first
telephone PMFS at (800) 225-1852 (toll-free) to receive an account number. The
following information will be requested: your name, address, tax identification
number, dividend distribution election, amount being wired and wiring bank.
Instructions should then be given by you to your bank to transfer funds by wire
to State Street Bank and Trust Company (State Street), Boston, Massachusetts,
Custody and Shareholder Services Division, Attention: Prudential MoneyMart
Assets, specifying on the wire the account number assigned by PMFS and your
name.

<PAGE>

If you arrange for receipt by State Street of Federal Funds prior to 4:30
P.M., New York time, on a business day, you may purchase shares of the Fund as
of that day and receive dividends commencing on the next business day.

In making a subsequent purchase order by wire, you should wire State Street
directly and should be sure that the wire specifies Prudential MoneyMart Assets
and your name and individual account number. It is not necessary to call PMFS to
make subsequent purchase orders utilizing Federal Funds. The minimum amount
which may be invested by wire is $1,000.

Purchase by Mail

Purchase orders for which remittance is to be made by check or money order
may be submitted directly by mail to Prudential Mutual Fund Services, Inc.,
Attention: Investment Services, P.O. Box 15020, New Brunswick, New Jersey
08906-5020, together with payment of the purchase price of such shares and, in
the case of a new account, a completed application form. You should also submit
an IRS Form W-9. If PMFS receives an order to purchase shares of the Fund and
payment in proper form prior to 4:30 P.M., New York time, the purchase order
will be effective on that day and you will begin earning dividends on the
following business day. See "Taxes, Dividends and Distributions." Checks
should be made payable to Prudential MoneyMart Assets. Certified checks are
not necessary, but checks must be drawn on a bank located in the United States.
There are restrictions on the redemption of shares purchased by check while
the funds are being collected. See "How to Sell Your Shares" below.

The Prudential Advantage Account Program

Shares of the Fund are offered to participants in the Prudential Advantage
Account Program (the Advantage Account Program), a financial services program
available to clients of Pruco Securities Corporation. Investors participating in
the Advantage Account Program may select the Fund as their primary investment
vehicle. Such investors will have free credit cash balances of $1.00 or more in
their Securities Account (Available Cash) (a component of the Advantage
Account Program carried through Prudential Securities) automatically invested in
shares of the Fund. Specifically, an order to purchase shares of the Fund is
placed (i) in the case of Available Cash resulting from the proceeds of
securities sales, on the settlement date of the securities sale, and (ii) in the
case of Available Cash resulting from non-trade related credits (i.e., receipt
of dividends and interest payments, or a cash payment by the participant into
his or her Securities Account), on the business day after receipt by Prudential
Securities of the non-trade related credit.

All shares purchased pursuant to these automatic purchase procedures will
begin earning dividends on the business day after the order is placed.
Prudential Securities will arrange for investment in shares of the Fund at 4:30
P.M. on the day the order is placed and cause payment to be made in Federal
Funds for the shares prior to 4:30 P.M. on the next business day. Prudential
Securities will have the use of free credit cash balances until delivery to the
Fund.

Redemptions will be automatically effected by Prudential Securities to
satisfy debit balances in a Securities Account created by activity therein or
arising under the Advantage Account Program, such as those incurred by use of
the Visa(R) Account, including Visa purchases, cash advances and Visa Account
checks. Each Advantage Account Program Securities Account will be automatically
scanned for debits each business day as of the close of business on that day
and after application of any free credit cash balances in the account to such
debits, a sufficient number of shares of the Fund (if selected as the Primary
Fund) and, if necessary, shares of other Advantage Account Funds owned by the
Advantage Account Program participant which have not been selected as his or her
Primary Fund or shares of a participant's money market funds managed by PMF
which are not primary Advantage Account funds will be redeemed as of that
business day to satisfy any remaining debits in the Securities Account. Shares
may not be purchased until all debits, overdrafts and other requirements in the
Securities Account are satisfied.

Advantage Account Program charges and expenses are not reflected in the
table of Fund Expenses. See "Fund Expenses."

16
<PAGE>

For information on participation in the Advantage Account Program,
investors should telephone (800) 235-7637 (toll-free).

HOW TO SELL YOUR SHARES

You can redeem your shares at any time for cash at the NAV per share next
determined after the redemption request is received in proper form by the
Transfer Agent or Prudential Securities. See "How the Fund Values its Shares."

Shares for which a redemption request is received by PMFS prior to 4:30
P.M., New York time, are entitled to a dividend on the day on which the request
is received. By pre-authorizing Expedited Redemption, you may arrange to have
payment for redeemed shares made in Federal Funds wired to your bank, normally
on the next bank business day following the date of receipt of the redemption
instructions. Should you redeem all of your shares, you will receive the amount
of all dividends declared for the month-to-date on those shares. See "Taxes,
Dividends and Distributions."

If redemption is requested by a corporation, partnership, trust or
fiduciary, written evidence of authority acceptable to the Transfer Agent must
be submitted before such request will be accepted. All correspondence and
documents concerning redemptions should be sent to the Fund in care of its
Transfer Agent, Prudential Mutual Fund Services, Inc., Attention: Redemption
Services, P.O. Box 15010, New Brunswick, New Jersey 08906-5010.

If the proceeds of the redemption (a) exceed $50,000, (b) are to be paid to
a person other than the record owner, (c) are to be sent to an address other
than the address on the Transfer Agent's records or (d) are to be paid to a
corporation, partnership, trust or fiduciary, the signature(s) on the redemption
request must be guaranteed by an "eligible guarantor institution." An
"eligible guarantor institution" includes any bank, broker, dealer or credit
union. The Transfer Agent reserves the right to request additional information
from, and make reasonable inquiries of, any eligible guarantor institution. For
clients of Prusec, a signature guarantee may be obtained from the agency or
office manager of most Prudential Insurance and Financial Services or Preferred
Services offices.

Normally, the Fund makes payment on the next business day for all shares
redeemed, but in any event, payment will be made within seven days after receipt
by PMFS of stock certificates and/or of a redemption request in proper form.
However, the Fund may suspend the right of redemption or postpone the date of
payment (a) for any periods during which the New York Stock Exchange is closed
(other than for customary weekend or holiday closings), (b) for any periods when
trading in the markets which the Fund normally utilizes is closed or restricted
or an emergency exists as determined by the SEC so that disposal of the Fund's
investments or determination of its net asset value is not reasonably
practicable or (c) for such other periods as the SEC may permit for protection
of the Fund's shareholders.

Payment for redemption of recently purchased shares will be delayed until
the Fund or its Transfer Agent has been advised that the purchase check has been
honored, up to 10 calendar days from the time of receipt of the purchase check
by the Transfer Agent. Such delay may be avoided by purchasing shares by wire or
by certified or official bank checks. The Fund makes no charge for redemption.

Redemption of Shares Purchased through Prudential Securities

Prudential Securities clients for whom Prudential Securities has purchased
shares of the Fund may have these shares redeemed only by instructing their
Prudential Securities financial adviser orally or in writing.

Prudential Securities has advised the Fund that it has established
procedures pursuant to which shares of the Fund held by a Prudential Securities
client having a deficiency in his or her Prudential Securities account will be
redeemed automatically to the extent of that deficiency to the nearest highest
dollar, unless the client notifies Prudential Securities to the contrary. The
amount of the redemption will be the lesser of (a) the total net asset value of
Fund shares held in the client's Prudential Securities account or (b) the
deficiency in the client's Prudential Securities account at the close of
business on the date such deficiency is due. Accordingly, a Prudential
Securities client utilizing this automatic

17
<PAGE>

redemption procedure and who wishes to pay for a securities transaction or
satisfy any other debit balance in his or her account other than through such
automatic redemption procedure must do so not later than the day of settlement
for such securities transaction or the date the debit balance is incurred.
Prudential Securities clients who have elected to utilize Autosweep will not be
entitled to dividends declared on the date of redemption.

Redemption of Shares Purchased through PMFS

If you purchase shares of the Fund through PMFS, you may use Check
Redemption, Expedited Redemption or Regular Redemption. Prudential Securities
clients for whom Prudential Securities has purchased shares may not use such
services.

Regular Redemption. You may redeem your shares by sending a written
request, accompanied by duly endorsed stock certificates, if issued, to
Prudential Mutual Fund Services, Inc., Attention: Redemption Services, P.O. Box
15010, New Brunswick, New Jersey 08906-5010. In this case, all stock
certificates and certain written requests for redemption must be endorsed by the
shareholder with signature guaranteed, as described above. Regular redemption is
made by check sent to the shareholder's address.

Expedited Redemption. By pre-authorizing Expedited Redemption, you may
arrange to have payment for redeemed shares made in Federal Funds wired to your
bank, normally on the next business day following redemption. In order to use
Expedited Redemption, you may so designate at the time the initial investment is
made or at a later date. Once an Expedited Redemption authorization form has
been completed, the signature on the authorization form guaranteed as set forth
above and the form returned to Prudential Mutual Fund Services, Inc., Attention
Account Maintenance, P.O. Box 15015, New Brunswick, New Jersey 08906-5015,
requests for redemption may be made by telegraph, letter or telephone. To
request Expedited Redemption by telephone, you should call PMFS at (800)
255-1852. Calls must be received by PMFS before 4:30 P.M., New York time, to
permit redemption as of such date. Requests by letter should be addressed to
Prudential Mutual Fund Services, Inc., at the address set forth above.

A signature guarantee is not required under Expedited Redemption once the
authorization form is properly completed and returned. The Expedited Redemption
privilege may be used only to redeem shares in an amount of $200 or more,
except that, if an account for which Expedited Redemption is requested has an
NAV of less than $200, the entire account must be redeemed. The proceeds of
redeemed shares in the amount of $1,000 or more are transmitted by wire to your
account at a domestic commercial bank which is a member of the Federal Reserve
System. Proceeds of less than $1,000 are forwarded by check to your designated
bank account.

During periods of severe market or economic conditions, Expedited
Redemption may be difficult to implement and you should redeem shares by mail as
described above.

Check Redemption. At your request, State Street will establish a personal
checking account for you. Checks drawn on this account can be made payable to
the order of any person in any amount greater than $500. When such check is
presented to State Street for payment, State Street presents the check to the
Fund as authority to redeem a sufficient number of shares of the Fund in the
shareholder's account to cover the amount of the check. If insufficient shares
are in the account, or if the purchase was made by check within 10 calendar
days, the check will be returned marked "insufficient funds." Checks in an
amount less than $500 will not be honored. Shares for which certificates have
been issued cannot be redeemed by check. PMFS reserves the right to impose a
service charge to establish a checking account and order checks.

Involuntary Redemption. Because of the relatively high cost of maintaining
an account, the Fund reserves the right to redeem, upon 60 days' written notice,
an account which is reduced by a shareholder to an NAV of $500 or less due to
redemption. You may avoid such redemption by increasing the NAV of your account
to an amount in excess of $500.

Redemption in Kind. If the Board of Directors determines that it would be
detrimental to the best interests of the remaining shareholders of the Fund to
make payment wholly or partially in cash, the Fund may pay the redemption price

18
<PAGE>

in whole or in part by a distribution in kind of securities from the portfolio
of the Fund, in lieu of cash, in conformity with the applicable rules of the
SEC. Securities will be readily marketable and will be valued in the same manner
as in a regular redemption. See "How the Fund Values Its Shares." If your shares
are redeemed in kind, you will incur brokerage costs in converting the assets
into cash. The Fund, however, has elected to be governed by Rule 18f-1
under the Investment Company Act under which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or one percent of the net
asset value of the Fund during any 90-day period for any one shareholder.

90-Day Repurchase Privilege. If you redeem your shares and have not
previously exercised the repurchase privilege, you may reinvest any portion or
all of the proceeds of such redemption in shares of the Fund at the NAV next
determined after the order is received, which must be within 90 days after the
date of the redemption. You will receive pro rata credit for any contingent
deferred sales charge paid in connection with the redemption. You must notify
the Fund's Transfer Agent, either directly or through Prudential Securities or
Prusec, at the time the repurchase privilege is exercised, that you are entitled
to credit for any contingent deferred sales charge you previously paid. Exercise
of the repurchase privilege will not affect the federal income tax treatment of
any gain realized upon the redemption. If the redemption resulted in a loss,
some or all of the loss, depending on the amount reinvested, will not be allowed
for federal income tax purposes.

Class B and Class C Purchase Privilege. You may direct that the proceeds of
a redemption of Fund shares be invested in Class B shares or Class C shares of
any Prudential Mutual Fund by calling your Prudential Securities financial
adviser or the Transfer Agent at (800) 225-1852. The transaction will be
effected on the basis of the relative NAV.

HOW TO EXCHANGE YOUR SHARES

As a shareholder of the Fund, you have an exchange privilege (the Exchange
Privilege) with certain other Prudential Mutual Funds, including one or more
specified money market funds and funds sold with an initial sales charge,
subject to the minimum investment requirements of such funds. You may exchange
your shares for Class A shares of the Prudential Mutual Funds on the basis of
relative NAV, plus the applicable sales charge. No additional sales charge is
imposed in connection with subsequent exchanges. You may not exchange your
shares for Class B shares of the Prudential Mutual Funds, except that shares
acquired prior to January 22, 1990 subject to a contingent deferred sales charge
can be exchanged for Class B shares. See "How to Sell Your Shares--Class B and
Class C Purchase Privilege" above and "Shareholder Investment Account--Exchange
Privilege" in the Statement of Additional Information. An exchange will be
treated as a redemption and purchase for tax purposes. You may not exchange your
shares for Class C Shares of the Prudential Mutual Funds.

In order to exchange shares by telephone, you must authorize the telephone
exchange privilege on your initial application form or by written notice to the
Transfer Agent and hold shares in non-certificate form. Thereafter, you may call
the Fund at (800) 225-1852 to execute a telephone exchange of shares weekdays,
except holidays, between the hours of 8:00 A.M. and 6:00 P.M., New York time.
For your protection and to prevent fraudulent exchanges, your telephone call
will be recorded and you will be asked to provide your personal identification
number. A written confirmation of the exchange transaction will be sent to you.
Neither the Fund nor its agents will be liable for any loss, liability or cost
which results from acting upon instructions reasonably believed to be genuine
under the foregoing procedures. All exchanges will be made on the basis of the
relative NAV of the two funds next determined after the request is received in
good order. The Exchange Privilege is available only in states where the
exchange may legally be made.

If you hold shares through Prudential Securities, you must exchange your
shares by contacting your Prudential Securities financial adviser.

If you hold certificates, the certificates, signed in the name(s) shown on
the face of the certificates, must be returned in order for the shares to be
exchanged. See "How to Sell Your Shares" above.

19
<PAGE>

You may also exchange shares by mail by writing to Prudential Mutual Fund
Services, Inc., Attention: Exchange Processing, P.O. Box 15010, New Brunswick,
New Jersey 08906-5010.

In periods of severe market or economic conditions, the telephone exchange
of shares may be difficult to implement and you should make exchanges by mail by
writing to Prudential Mutual Fund Services, Inc., at the address noted above.

The Exchange Privilege may be modified or terminated at any time on 60
days' notice to shareholders.

SHAREHOLDER SERVICES

In addition to the Exchange Privilege, as a shareholder in the Fund, you
can take advantage of the following additional services and privileges:

o Automatic Reinvestment of Dividends and/or Distributions. For your
convenience, all dividends and distributions are automatically reinvested in
full and fractional shares of the Fund at NAV. You may direct the Transfer Agent
in writing not less than 5 full business days prior to the record date to have
subsequent dividends and/or distributions sent in cash rather than reinvested.
If you hold shares through Prudential Securities, you should contact your
financial adviser.

o Automatic Savings Accumulation Plan (ASAP). Under ASAP you may make
regular purchases of Fund shares in amounts as little as $50 via an automatic
charge to a bank account or Prudential Securities account (including a Command
Account). For additional information about this service, you may contact your
Prudential Securities financial adviser, Prusec representative or the Transfer
Agent directly.

o Tax-Deferred Retirement Plans. Various tax-deferred retirement plans,
including a 401(k) plan, self-directed individual retirement accounts and
"tax-sheltered accounts" under Section 403(b)(7) of the Internal Revenue Code
are available through the Distributor. These plans are for use by both
self-employed individuals and corporate employers. These plans permit either
self-direction of accounts by participants, or a pooled account arrangement.
Information regarding the establishment of these plans, the administration,
custodial fees and other details is available from Prudential Securities or the
Transfer Agent. If you are considering adopting such a plan, you should consult
with your own legal or tax adviser with respect to the establishment and
maintenance of such a plan.

o Systematic Withdrawal Plan. A systematic withdrawal plan is available for
shareholders which provides for monthly or quarterly checks. For additional
information about the service, you may contact your Prudential Securities
financial adviser, Prusec representative or Transfer Agent directly.

o Multiple Accounts. Special procedures have been designed for banks and
other institutions that wish to open multiple accounts. An institution may open
a single master account by filing an application form with the Transfer Agent,
Attention: Customer Service, P.O. Box 15005, New Brunswick, New Jersey 08906,
signed by personnel authorized to act for the institution. Individual
sub-accounts may be opened at the time the master account is opened by listing
them on the application form, or they may be added at a later date by written
advice or by filing forms supplied by the Fund. Procedures are available to
identify sub-accounts by name and number within the master account name. The
investment minimums set forth above are applicable to the aggregate amounts
invested by a group and not to the amount credited to each sub-account.

o Purchase by Holders of Prudential Securities Unit Trusts. Holders of
Prudential sponsored Unit Trusts may elect to have monthly distributions paid by
such Unit Trusts reinvested in shares of the Fund without compliance with the
investment minimums described under "How to Buy Shares of the Fund."

20
<PAGE>

o Reports to Shareholders. The Fund will send you annual and semi-annual
reports. The financial statements appearing in annual reports are audited by
independent accountants. In order to reduce duplicate mailing and printing
expenses, the Fund will provide one annual and semi-annual shareholder report
and annual prospectus per household. You may request additional copies of such
reports by calling (800) 225-1852 or by writing to the Fund at One Seaport
Plaza, New York, New York 10292.

o Shareholder Inquiries. Inquiries should be addressed to the Fund at One
Seaport Plaza, New York, New York 10292, or by telephone, at (800) 225-1852
(toll free) or, from outside the U.S.A., at (908) 417-7555 (collect).

For additional information regarding the services and privileges described
above, see "Shareholder Investment Account" in the Statement of Additional
Information.

21
<PAGE>

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<PAGE>
THE PRUDENTIAL MUTUAL FUND FAMILY

Prudential Mutual Fund Management offers a broad range of mutual funds
designed to meet your individual needs. We welcome you to review the investment
options available through our family of funds. For more information on the
Prudential Mutual Funds, including charges and expenses, contact your Prudential
Securities financial adviser or Prusec registered representative or telephone
the Fund at (800) 225-1852 for a free prospectus. Read the prospectus
carefully before you invest or send money.

Taxable Bond Funds

Prudential Adjustable Rate Securities Fund, Inc.
Prudential Diversified Bond Fund, Inc.
Prudential GNMA Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential Structured Maturity Fund, Inc.
Income Portfolio
Prudential U.S. Government Fund
The BlackRock Government Income Trust

Tax-Exempt Bond Funds

Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Yield Series
Insured Series
Modified Term Series
Prudential Municipal Series Fund
Arizona Series
Florida Series
Georgia Series

Hawaii Income Series

Maryland Series
Massachusetts Series
Michigan Series
Minnesota Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.

Global Funds

Prudential Europe Growth Fund, Inc.
Prudential Global Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Global Natural Resources Fund, Inc.

Prudential Intermediate Global Income Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential Short-Term Global Income Fund, Inc.
Global Assets Portfolio
Short-Term Global Income Portfolio
Global Utility Fund, Inc.

Equity Funds

Prudential Allocation Fund
Conservatively Managed Portfolio
Strategy Portfolio
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Growth Opportunity Fund, Inc.
Prudential IncomeVertible(R) Fund, Inc.
Prudential Multi-Sector Fund, Inc.
Prudential Strategist Fund, Inc.
Prudential Utility Fund, Inc.
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund

Money Market Funds

o Taxable Money Market Funds
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Special Money Market Fund
Money Market Series
Prudential MoneyMart Assets
o Tax-Free Money Market Funds
Prudential Tax-Free Money Fund
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
o Command Funds
Command Money Fund
Command Government Fund
Command Tax-Free Fund
o Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series

A-1
<PAGE>

No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those contained
in this Prospectus, in connection with the offer contained herein, and, if given
or made, such other information or representations must not be relied upon as
having been authorized by the Fund or the Distributor. This Prospectus does not
constitute an offer by the Fund or by the Distributor to sell or a solicitation
of any offer to buy any of the securities offered hereby in any jurisdiction to
any person to whom it is unlawful to make such offer in such jurisdiction.

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

TABLE OF CONTENTS

Page
----

FUND HIGHLIGHTS ............................................ 2
Risk Factors and Special Characteristics ................. 2
FUND EXPENSES .............................................. 4
FINANCIAL HIGHLIGHTS ....................................... 5
CALCULATION OF YIELD ....................................... 6
HOW THE FUND INVESTS ....................................... 6
Investment Objective and Policies ........................ 6
Other Investments and Policies ........................... 7
Investment Restrictions .................................. 9
HOW THE FUND IS MANAGED .................................... 9
Manager .................................................. 9
Distributor .............................................. 10
Portfolio Transactions ................................... 11
Custodian and Transfer and
Dividend Disbursing Agent .............................. 11
HOW THE FUND VALUES ITS SHARES ............................. 12
TAXES, DIVIDENDS AND DISTRIBUTIONS ......................... 12
GENERAL INFORMATION ........................................ 13
Description of Shares .................................... 13
Additional Information ................................... 14
SHAREHOLDER GUIDE .......................................... 14
How to Buy Shares of the Fund ............................ 14
How to Sell Your Shares .................................. 17
How to Exchange Your Shares .............................. 19
Shareholder Services ..................................... 20
PRUDENTIAL MUTUAL FUND FAMILY .............................. A-1

- --------------------------------------------------------------------------------
MF 108A 430230J

CUSIP No.:74435H-10-2

Prudential
MoneyMart
Assets

----------

Prudential Mutual Funds
Building Your Future
On Our Strength SM

PROSPECTUS

February 28, 1995

<PAGE>

Prudential Mutual Funds
Supplement dated September 5, 1995

SHAREHOLDER GUIDE

HOW TO BUY SHARES OF THE FUND/TRUST
Purchases through Prudential Securities

Prudential Securities has modified its procedures for automatic investment
effective September 5, 1995. Accordingly, the following paragraph is restated in
its entirety.

Automatic Investment. Prudential Securities has advised the Fund that it
has instituted procedures pursuant to which, upon enrollment by a Prudential
Securities client, Prudential Securities will make automatic investments of free
credit cash balances of $1,000 or more ($1.00 for IRAs and Benefit Plans)
(Eligible Credit Balances) held in such client's account in shares of the Fund
(Autosweep). Under these procedures, for accounts other than IRA and Benefit
Plans, an order to purchase shares of the Fund is placed (i) in the case of
Eligible Credit Balances resulting from the proceeds of a securities sale, at
the opening of business on the day following the settlement of the securities
sale, and (ii) in the case of Eligible Credit Balances resulting from a
non-trade related credit (e.g., receipt of a dividend or interest payment,
maturity of a bond or a cash payment into the securities account), at the
opening of business semi-monthly. For IRAs and Benefit Plans, orders will be
placed by Prudential Securities (i) on the settlement date of the securities
sale, in the case of Eligible Credit Balances resulting from the proceeds of a
securities sale and (ii) on the business day after receipt by Prudential
Securities of the non-trade related credit, in the case of Eligible Credit
Balances resulting from a non-trade related credit. Each time an order is placed
under these procedures resulting from the settlement of a securities sale, any
non-trade related credit in the client's account will also be automatically
invested. For the purposes of Autosweep, ``Benefit Plans'' include (i) employee
benefit plans as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 (ERISA) other than governmental plans as defined in Section
3(32) of ERISA and church plans as defined in Section 3(33) of ERISA, (ii)
pension, profit-sharing or other employee benefit plans qualified under Section
401 of the Internal Revenue Code and (iii) deferred compensation and annuity
plans under Section 457 or 403(b)(7) of the Internal Revenue Code. ``IRAs'' are
Individual Retirement Accounts as defined in Section 408(a) of the Internal
Revenue Code. All shares purchased pursuant to these procedures will begin
earning dividends on the business day after the order is placed. Prudential
Securities will have the use of Eligible Credit Balances until monies are
delivered to the Fund.

Listed below are the names of the Prudential Mutual Funds and the dates of
the prospectuses to which this supplement relates.

Name of Fund Prospectus Date

Prudential Government Securities Trust
(Money Market Series) August 1, 1995
(U.S. Treasury Series) August 1, 1995
Prudential MoneyMart Assets February 28, 1995

MF950C-12

<PAGE>
PRUDENTIAL
MONEYMART ASSETS

Statement of Additional Information
Dated February 28, 1995

Prudential-Bache MoneyMart Assets Inc., doing business as Prudential
MoneyMart Assets (the Fund), is an open-end, diversified, management investment
company whose investment objective is maximum current income consistent with
stability of capital and maintenance of liquidity. The Fund pursues this
objective by investing primarily in a portfolio of short-term money market
instruments maturing within thirteen months of the date of acquisition. There
can be no assurance that the Fund's investment objective will be achieved. See
"Investment Objective and Policies." The Fund's address is One Seaport Plaza,
New York, New York 10292, and its telephone number is (800) 225-1852.

This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Fund's Prospectus, dated February 28, 1995, a copy
of which may be obtained from the Fund upon request at the address noted above.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Cross-
reference
to page in
Page Prospectus
---- ----------------
<S> <C> <C>

General Information and History............................................. B-2 13

Investment Objective and Policies........................................... B-2 6

Investment Restrictions..................................................... B-3 9
Suitability for Investors................................................... B-4 --
Calculation of Yield........................................................ B-5 6

Directors and Officers...................................................... B-5 9

Manager..................................................................... B-8 9
Distributor................................................................. B-9 10
Purchase and Redemption of Fund Shares...................................... B-10 14
Shareholder Investment Account.............................................. B-12 20
Dividends................................................................... B-14 12
Net Asset Value............................................................. B-14 12
Portfolio Transactions...................................................... B-14 11
Taxes....................................................................... B-15 12
Custodian, Transfer and Dividend Disbursing Agent and Independent
Accountants............................................................... B-16 11
Financial Statements........................................................ B-17 --
Independent Auditors' Report................................................ B-25 --

Appendix A--Description of Ratings.......................................... A-1 --
</TABLE>

- --------------------------------------------------------------------------------
MF108B

<PAGE>

GENERAL INFORMATION AND HISTORY

On February 25, 1991, Prudential-Bache Securities Inc. changed its name to
Prudential Securities Incorporated (Prudential Securities). Effective March 15,
1991, the Fund began doing business as "Prudential MoneyMart Assets."

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is maximum current income consistent with
stability of capital and maintenance of liquidity. This objective is pursued by
investing primarily in a portfolio of money market instruments maturing in
thirteen months or less.

Floating Rate and Variable Rate Securities. The Fund may purchase floating
rate and variable rate securities. Investments in floating or variable rate
securities normally will involve securities which provide that the rate of
interest is set as a spread to a designated base rate, such as rates on Treasury
bills, and, in some cases, that the purchaser can demand payment of the
obligation at specified intervals or after a specified notice period (in each
case a period of less than thirteen months) at par plus accrued interest, which
amount may be more or less than the amount paid for them. Variable rate
securities provide for a specified periodic adjustment in the interest rate,
while floating rate securities have an interest rate which changes whenever
there is a change in the designated base interest rate.

Puts. The Fund may purchase instruments of the types described in its
Prospectus under "How the Fund Invests--Investment Objective and Policies"
together with the right to resell the instruments at an agreed-upon price or
yield within a specified period prior to the maturity date of the instruments.
Such a right to resell is commonly known as a "put," and the aggregate price
which the Fund pays for instruments with puts may be higher than the price which
otherwise would be paid for the instruments. Consistent with the Fund's
investment objective and applicable rules issued by the Securities and Exchange
Commission (SEC) and subject to the supervision of the Board of Directors, the
purpose of this practice is to permit the Fund to be fully invested while
preserving the necessary liquidity to meet unusually large redemptions and to
purchase at a later date securities other than those subject to the put. Puts
may be exercised prior to the expiration date in order to fund obligations to
purchase other securities or to meet redemption requests. These obligations may
arise during periods in which proceeds from sales of Fund shares and from recent
sales of portfolio securities are insufficient to meet such obligations or when
the funds available are otherwise allocated for investment. In addition, puts
may be exercised prior to the expiration date in the event the Fund's investment
adviser revises its evaluation of the creditworthiness of the issuer of the
underlying security. In determining whether to exercise puts prior to their
expiration date and in selecting which puts to exercise in such circumstances,
the Fund's investment adviser considers, among other things, the amount of cash
available to the Fund, the expiration dates of the available puts, any future
commitments for securities purchases, the yield, quality and maturity dates of
the underlying securities, alternative investment opportunities and the
desirability of retaining the underlying securities in the Fund's portfolio.

The Fund values instruments which are subject to puts at amortized cost; no
value is assigned to the put. The cost of the put, if any, is carried as an
unrealized loss from the time of purchase until it is exercised or expires.

Since the value of the put is dependent on the ability of the put writer to
meet its obligation to repurchase, the Fund's policy is to enter into put
transactions only with such brokers, dealers or financial institutions which
present minimal credit risks. There is a credit risk associated with the
purchase of puts in that the broker, dealer or financial institution might
default on its obligation to repurchase an underlying security. In the event
such a default should occur, the Fund is unable to predict whether all or any
portion of any loss sustained could subsequently be recovered from the broker,
dealer or financial institution.

The Fund will invest no more than 5% of its total assets in securities
issued by or subject to puts from the same institution. For purposes of this
limitation, unconditional puts or guarantees with respect to a security will not
be deemed to be issued by the institution providing the guarantee or put if the
value of all securities held by the Fund and issued or guaranteed by the issuer
providing the guarantee or put are limited to 10% of the Fund's total assets.

Repurchase Agreements. The Fund participates in a joint repurchase account
with other investment companies managed by Prudential Mutual Fund Management,
Inc. pursuant to an order of the SEC. On a daily basis, any uninvested cash
balances of the Fund may be aggregated with those of such investment companies
and invested in one or more repurchase agreements. Each fund participates in the
income earned or accrued in the joint account based on the percentage of its
investment.

Illiquid Securities. The Fund may not invest more than 10% of its net
assets in illiquid securities, including securities that are illiquid by virtue
of the absence of a readily available market or legal or contractual
restrictions on resale and repurchase agreements which have a maturity of longer
than seven days. Historically, illiquid securities have included securities
subject to contractual or legal restrictions on resale because they have not
been registered under the Securities Act of 1933, as amended (Securities Act),
securities which are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid

B-2
<PAGE>

securities because of the potential for delays on resale and uncertainty in
valuation. Limitations on resale may have an adverse effect on the marketability
of portfolio securities and a mutual fund might be unable to dispose of
restricted or other illiquid securities promptly or at reasonable prices and
might thereby experience difficulty satisfying redemptions within seven days. A
mutual fund might also have to register such restricted securities in order to
dispose of them resulting in additional expense and delay. Adverse market
conditions could impede such a public offering of securities.

In recent years, however, a large institutional market has developed for
certain securities that are not registered under the Securities Act, including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments.

Rule 144A of the Securities Act allows for a broader institutional trading
market for securities otherwise subject to restriction on resale to the general
public. Rule 144A establishes a "safe harbor" from the registration
requirements of the Securities Act for resales of certain securities to
qualified institutional buyers. The investment adviser anticipates that the
market for certain restricted securities such as institutional commercial paper
and foreign securities will expand further as a result of this new regulation
and the development of automated systems for the trading, clearance and
settlement of unregistered securities of domestic and foreign issuers, such as
the PORTAL System sponsored by the National Association of Securities Dealers,
Inc.

Restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act and commercial paper for which there is a readily available
market will not be deemed to be illiquid. The investment adviser will monitor
the liquidity of such restricted securities subject to the supervision of the
Board of Directors. In reaching liquidity decisions, the investment adviser will
consider, inter alia, the following factors: (1) the frequency of trades and
quotes for the security; (2) the number of dealers wishing to purchase or sell
the security and the number of other potential purchasers; (3) dealer
undertakings to make a market in the security; and (4) the nature of the
security and the nature of the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer). In addition, in order for commercial paper that is issued in
reliance on Section 4(2) of the Securities Act to be considered liquid, (i) it
must be rated in one of the two highest rating categories by at least two
nationally recognized statistical rating organizations (NRSRO), or if only one
NRSRO rates the securities, by that NRSRO, or, if unrated, be of comparable
quality in the view of the investment adviser; and (ii) it must not be "traded
flat" (i.e., without accrued interest) or in default as to principal or
interest. Repurchase agreements subject to demand are deemed to have a maturity
equal to the notice period.

INVESTMENT RESTRICTIONS

The Fund invests primarily in money market instruments maturing in thirteen
months or less. In connection with its investment objective and policies as set
forth in the Prospectus, the Fund has adopted the following investment
restrictions, none of which may be changed without the approval of the holders
of a majority of the Fund's outstanding voting securities. A "majority of the
Fund's outstanding voting securities," when used in this Statement of
Additional Information, means the lesser of (i) 67% of the voting shares
represented at a meeting at which more than 50% of the outstanding voting shares
are present in person or represented by proxy or (ii) more than 50% of the
outstanding voting shares.

The Fund may not engage in any of the practices described in paragraphs
1-13 below:

1. Purchase common stock or other voting securities, preferred stock,
warrants or other equity securities.

2. Purchase any securities (other than obligations of the U.S. Government,
its agencies and instrumentalities) if as a result 25% or more of the value of
the Fund's total assets (determined at the time of investment) would be invested
in the securities of one or more issuers conducting their principal business
activities in the same industry, provided that there is no limitation with
respect to money market instruments of domestic banks, U.S. branches of foreign
banks that are subject to the same regulations as U.S. banks and foreign
branches of domestic banks (provided that the domestic bank is unconditionally
liable in the event of the failure of the foreign branch to make payment on its
instruments for any reason).

3. Purchase the securities of any one issuer, other than the U.S.
Government or its agencies and instrumentalities, if more than 5% of the value
of the Fund's total assets would be invested in securities of such issuer.

4. Make cash loans except through the purchase of debt obligations and the
entry into repurchase agreements permitted under "Investment Objective and
Policies." The Fund may also engage in the practice of lending its securities
only against fully comparable collateral. See paragraph 13 below.

5. Borrow money, except from banks for temporary or emergency purposes and
then only in amounts up to 10% of the value of the Fund's net assets. This
borrowing provision is included solely to facilitate the orderly sale of
portfolio securities to accommodate abnormally heavy redemption requests, if
they should occur, or to permit the Fund to obtain short-term credits necessary
for the
B-3
<PAGE>

settlement of transactions, and is not for investment purposes. Interest paid on
borrowings is not available for investment by the Fund. Secured temporary
borrowings may take the form of reverse repurchase agreements, pursuant to which
the Fund would sell portfolio securities for cash and simultaneously agree to
repurchase them at a specified date for the same amount of cash plus an interest
component. The SEC has issued a release requiring, in effect, that the Fund
maintain, in a segregated account with State Street Bank and Trust Company
(State Street), liquid assets equal in value to the amount owed.

6. Mortgage, pledge or hypothecate any assets, except in an amount up to
15% of the value of the Fund's net assets, but only to secure borrowings for
temporary or emergency purposes as described in paragraph 5 above.

7. Purchase or sell real estate, real estate investment trust securities,
commodities or commodity contracts, or oil and gas interests.

8. Act as an underwriter of securities.

9. Purchase securities on margin, except for the use of short-term credit
necessary for clearance of purchases or sales of portfolio securities, or make
short sales of securities or maintain a short position.

10. Purchase securities, other than obligations of the U.S. Government, its
agencies or instrumentalities, of any issuer having a record, together with
predecessors, of less than three years of continuous operations if, immediately
after such purchase, more than 5% of the Fund's total assets would be invested
in such securities.

11. Make investments for the purpose of exercising control or management.

12. Purchase securities of other investment companies, except in connection
with a merger, consolidation, acquisition or reorganization.

13. The Fund may lend its portfolio securities if such loans are secured
continuously by collateral in cash maintained on a daily basis at an amount at
least equal at all times to the market value of the securities loaned. The Fund
must maintain the right to call such loans and to obtain the securities loaned
at any time on five days' notice. During the existence of a loan, the Fund
continues to receive the equivalent of the interest paid by the issuer on the
securities loaned and also has the right to receive the interest on investment
of the cash collateral in short-term money market instruments. If the management
of the Fund determines to make securities loans, the value of the securities
loaned will not exceed 10% of the value of the Fund's total assets.

Whenever any fundamental investment policy or investment restriction states
a maximum percentage of the Fund's assets, it is intended that if the percentage
limitation is met at the time the action is taken, a later change in percentage
resulting from changing total or net asset values will not be considered a
violation of such policy. However, in the event that the Fund's asset coverage
for borrowings falls below 300%, the Fund will take prompt action to reduce its
borrowings, as required by applicable law.

In order to comply with certain state "blue sky" restrictions, the Fund
will not as a matter of operating policy, (i) mortgage, pledge or hypothecate in
excess of 10% of its net assets, or (ii) invest in securities of issuers which
are restricted as to disposition, if more than 15% of its total assets would be
invested in such securities (this restriction shall not apply to mortgage-backed
securities, asset backed securities or obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities).

SUITABILITY FOR INVESTORS

The Fund is designed primarily to provide a convenient means of investing
short-term funds where the direct purchase of money market instruments may be
impractical, uneconomical or undesirable.

Money market instruments such as those to be purchased by the Fund are
generally available only in denominations of $100,000 or more. Frequently,
higher yields may be obtained by the purchase of instruments in blocks or
denominations of $1,000,000, $5,000,000 or more. As compared with direct
purchase, an investment in the Fund permits participation in such money market
instruments while affording the advantage of diversification and a high degree
of liquidity. Further, the Fund relieves the investor of most investment
decisions and bookkeeping problems associated with the direct purchase of money
market instruments, such as making numerous buy and sell decisions, scheduling
maturities, reinvesting income, providing for safekeeping and investing in round
lots.

B-4

<PAGE>

The Fund has developed special procedures to assist banks and other
institutions choosing to establish multiple accounts. Banks should consult their
legal advisers regarding state and federal laws applicable to the purchase of
Fund shares for fiduciary accounts.

CALCULATION OF YIELD

The Fund will prepare a current quotation of yield from time to time. The
yield quoted will be the simple annualized yield for an identified seven
calendar day period. The yield calculation will be based on a hypothetical
account having a balance of exactly one share at the beginning of the seven-day
period. The base period return will be the change in the value of the
hypothetical account during the seven-day period, including dividends declared
on any shares purchased with dividends on the share but excluding any capital
changes. The yield will vary as interest rates and other conditions affecting
money market instruments change. Yield also depends on the quality, length of
maturity and type of instruments in the Fund's portfolio, and its operating
expenses. The Fund may also prepare an effective annual yield computed by
compounding the unannualized seven-day period return as follows: by adding 1 to
the unannualized seven-day period return, raising the sum to a power equal to
365 divided by 7, and subtracting 1 from the result.

The Fund's yield fluctuates, and an annualized yield quotation is not a
representation by the Fund as to what an investment in the Fund will actually
yield for any given period. Actual yields will depend upon not only changes in
interest rates generally during the period in which the investment in the Fund
is held, but also on any realized or unrealized gains and losses and changes in
the Fund's expenses.

DIRECTORS AND OFFICERS

Directors and officers of the Fund, together with information as to their
principal business occupations during the last five years, are shown below.

<TABLE>
<CAPTION>
Position Business Affiliation and
Name and Address with Fund Principal Occupation
- ---------------------- ------------------- ---------------------------------------------------
<S> <C> <C>

William S. Field (65) Director Retired Chairman, Prudential Equity Investors,
c/o Prudential Mutual Inc., a subsidiary of The Prudential Insurance
Fund Management, Inc. Company of America (Prudential) (1984-1994);
One Seaport Plaza Senior Vice President, Prudential (since 1979);
New York, New York served in various capacities at Prudential (since
10292 1953); Director of Sunglass Hut International,
Inc. and Commodities Corp.
Delayne Dedrick Gold Director Marketing and Management Consultant.
(56)
c/o Prudential Mutual
Fund Management, Inc.
One Seaport Plaza
New York, New York
10292

*Harry A. Jacobs, Jr. Director Senior Director (since January 1986) of Prudential
(73) Securities Incorporated (Prudential Securities);
One Seaport Plaza formerly, Interim Chairman and Chief Executive
New York, New York Officer (June 1993-October 1993) of Prudential
10292 Mutual Fund Management, Inc. (PMF); Chairman of
the Board and Chief Executive Officer of Bache
Group Inc. (1977-1982); formerly Chairman of the
Board of Prudential-Bache Securities Inc.
(1982-1985); Director of The First Australia
Fund, Inc., The First Australia Prime Income
Fund, Inc., The Global Government Plus Fund,
Inc., The Global Total Return Fund, Inc. and the
Center for National Policy; Trustee of The
Trudeau Institute.
*Lawrence C. McQuade President and Vice Chairman of PMF (since 1988); Managing
(67) Director Director, Investment Banking, Prudential
One Seaport Plaza Securities (1988-1991); Director of Czech and
New York, New York Slovak American Enterprise Fund (since October
10292 1994), Quixote Corporation (since February 1992)
and BUNZL, PLC (since June 1991); formerly
Director of Crazy Eddie Inc. (1987-1990) and
Kaiser Tech., Ltd. and Kaiser Aluminum and
Chemical Corp. (March 1987-November 1988);
formerly Executive Vice President and Director of
W.R. Grace & Co. (1975-1987); President and
Director of The Global Government Plus Fund,
Inc., The Global Total Return Fund, Inc. and The
High Yield Income Fund Inc.

</TABLE>

B-5
<PAGE>
<TABLE>
<CAPTION>
Position Business Affiliation and
Name and Address with Fund Principal Occupation
- ---------------------- ------------------- ---------------------------------------------------
<S>
<C> <C>

Thomas A. Owens, Jr. Director Consultant; Director of EMCORE Corp. (manufacturer
(72) of electronic materials).
c/o Prudential Mutual
Fund Management, Inc.
One Seaport Plaza
New York, New York
10292

*Richard A. Redeker Director President, Chief Executive Officer and Director
(51) (since October 1993) of PMF; Executive Vice
One Seaport Plaza President, Director and Member of Operating
New York, New York Committee (since October 1993), Prudential
10292 Securities; Director (since October 1993) of
Prudential Securities Group, Inc. (PSG);
Executive Vice President (since July 1994), The
Prudential Investment Corporation (PIC);
Director (since January 1994) of Prudential
Mutual Fund Distributors (PMFD) and Prudential
Mutual Fund Services, Inc. (PMFS); formerly
Senior Executive Vice President and Director of
Kemper Financial Services, Inc. (September
1978-September 1993); Director of The Global
Government Plus Fund, Inc., The Global Total
Return Fund, Inc. and The High Yield Income Fund,
Inc.
Sidney M. Spielvogel Director Managing Director, Corporate Capital Consultants,
(69) Inc. (since April 1994); formerly, Vice President
c/o Prudential Mutual (January 1992-March 1994) of Reich & Co., Inc.;
Fund Management, Inc. Vice President (March 1988-January 1992) of
One Seaport Plaza Jesup, Josephthal & Co. Inc.; formerly Managing
New York, New York Director, Corporate Finance (January 1986-January
10292 1988) of Prudential Securities; prior thereto,
Senior Vice President (more than five years) of
Prudential Securities; Director of Supreme
Equipment & Systems Corporation (until July
1993).
Nancy H. Teeters (64) Director Economist; formerly Vice President and Chief
c/o Prudential Mutual Economist (March 1986-June 1990) of International
Fund Management, Inc. Business Machines Corporation; Member of the
One Seaport Plaza Board of Governors of the Horace H. Rackham
New York, New York School of Graduate Studies of the University of
10292 Michigan; Director of Inland Steel Corporation
(since July 1991), Global Utility Fund, Inc., The
First Financial Fund, Inc. and The Global Total
Return Fund, Inc.
Robert H. Wellington Director Retired Chairman and Chief Executive Officer (since
(72) September 1990), Chairman and CEO (1988-September
c/o Prudential Mutual 1990), President and Chief Executive Officer
Fund Management, Inc. (1981-1988), AMSTED Industries Incorporated
One Seaport Plaza (diversified manufacturer of railroad,
New York, New York construction and building and industrial
10292 products); Director of AMSTED Industries
Incorporated.
Robert F. Gunia (48) Vice President Chief Administrative Officer (since July 1990),
One Seaport Plaza Director (since January 1989), Executive Vice
New York, New York President, Treasurer and Chief Financial Officer
10292 (since June 1987) of PMF; Senior Vice President
(since March 1987) of Prudential Securities;
Executive Vice President, Treasurer, Comptroller
and Director, PMFD (since March 1991); Director,
PMFS (since June 1987); Vice President and
Director of The Asia Pacific Fund,Inc. (since
May 1989).
S. Jane Rose (49) Secretary Senior Vice President (since January 1991), Senior
One Seaport Plaza Counsel (since June 1987) and First Vice
New York, New York President (June 1987-December 1990) of PMF;
10292 Senior Vice President and Senior Counsel (since
July 1992) of Prudential Securities; formerly
Vice President and Associate General Counsel of
Prudential Securities.
Grace Torres (35) Treasurer and First Vice President (since March 1994), Prudential
One Seaport Plaza Principal Financial Mutual Fund Management, Inc.; First Vice
New York, New York and Accounting President of Prudential Securities (since March
10292 Officer 1994); prior thereto, Vice President, Bankers
Trust Corporation.

</TABLE>

B-6
<PAGE>
<TABLE>
<CAPTION>
Position Business Affiliation and
Name and Address with Fund Principal Occupation
- ---------------------- ------------------- ---------------------------------------------------
<S> <C> <C>

Deborah A. Docs (37) Assistant Secretary Vice President (since January 1993), Associate Vice
One Seaport Plaza President (January 1990-December 1992), Assistant
New York, New York General Counsel (since November 1991), Assistant
10292 Vice President (January 1989-December 1989) and
Legal Associate (1987-1991) of PMF; Vice
President (since January 1993), Associate Vice
President (January 1992-December 1992) and
Assistant General Counsel (since January 1992) of
Prudential Securities.

- ---------------
* "Interested" Director, as defined in the Investment Company Act of 1940, as
amended (Investment Company Act), by reason of his affiliation with PMF,
Prudential Securities, Prudential or a broker-dealer.

</TABLE>

Directors and officers of the Fund are also trustees, directors and
officers of some or all of the other investment companies distributed by
Prudential Securities or Prudential Mutual Fund Distributors, Inc.

The officers conduct and supervise the daily business operations of the
Fund, while the Directors, in addition to their functions set forth under
"Manager" and "Distributor," review such actions and decide on general policy.

Directors may receive their Directors' fees pursuant to a deferred fee
agreement with the Fund. Under the terms of the agreement, the Fund accrues
daily the amount of such Director's fees in installments which accrue interest
at a rate equivalent to the prevailing rate applicable to 90-day U.S. Treasury
Bills at the beginning of each calendar quarter or, pursuant to an SEC exemptive
order, at the daily rate of return of the Fund (the Fund rate). Payment of the
interest so accrued is also deferred and accruals become payable at the option
of the Director. The Fund's obligation to make payments of deferred Directors'
fees, together with interest thereon, is a general obligation of the Fund.

Each Director who is not an affiliated person of PMF or PIC currently
receives $10,000 as an annual Director's fee, plus expenses, and $1,000 plus
expenses for service on each Board committee. An aggregate of approximately
$66,000 in fees was paid by the Fund to such Directors as a group for 1994.

The following table sets forth the aggregate compensation paid by the Fund
for the fiscal year ended December 31, 1994 to the Directors who are not
affiliated with the Manager and the aggregate compensation paid to such
Directors for service on the Fund's board and that of all other investment
companies managed by Prudential Mutual Fund Management, Inc. (Fund Complex) for
the calendar year ended December 31, 1994.

Compensation Table
<TABLE>
<CAPTION>
Total
Pension or Compensation
Retirement From Fund
Aggregate Benefits Accrued Estimated Annual and Fund
Compensation As Part of Fund Benefits Upon Complex Paid
Name and Position From Fund Expenses Retirement to Directors
- ------------------------------------------ ------------ ----------------- ----------------- -------------
<S> <C> <C> <C> <C>
William S. Field--Director $ 6,000 None N/A $ 6,000(1)*
Delayne Dedrick Gold--Director $ 12,000 None N/A $185,000(24)*
Thomas A. Owens, Jr.--Director $ 12,000 None N/A $100,500(12)*
Sidney M. Spielvogel--Director $ 12,000 None N/A $ 12,000(1)*
Nancy Hays Teeters--Director $ 12,000 None N/A $ 95,000(12)*
Robert H. Wellington--Director $ 12,000 None N/A $ 27,000(3)*

- ------------------
* Indicates number of funds in Fund Complex (including the Fund) to which
aggregate compensation relates.
</TABLE>

As of January 27, 1995, the Directors and officers of the Fund, as a group,
beneficially owned less than one percent of the outstanding shares of Common
Stock of the Fund.

As of January 27, 1995, Prudential Securities held, solely of record on
behalf of other persons, 6,440,669,875 shares of the Fund's Common Stock,
representing approximately 95% of the shares then outstanding. Prudential
Securities had the sole power to vote 83,315,752 shares held as of January 27,
1995 for the benefit of participating employees of Prudential Securities in the
Prudential Securities 401(k) Plan, representing about 1% of the shares then
outstanding.

B-7

<PAGE>

MANAGER

The manager of the Fund is Prudential Mutual Fund Management, Inc. (PMF or
the Manager), One Seaport Plaza, New York, New York 10292. PMF serves as manager
to all of the other investment companies that, together with the Fund, comprise
the "Prudential Mutual Funds." See "How the Fund Is Managed--Manager" in the
Prospectus. As of January 31, 1995, PMF managed and/or administered open-end and
closed-end management investment companies with assets of approximately $45
billion. According to the Investment Company Institute, as of August 31, 1994,
the Prudential Mutual Funds were the 12th largest family of mutual funds in the
United States.

For its services, PMF receives, pursuant to a management agreement (the
Management Agreement) with the Fund, a fee at an annual rate of .50 of 1% of the
Fund's average daily net assets up to $50 million and .30 of 1% of the Fund's
average daily net assets in excess of $50 million. The fee is computed daily and
payable monthly. The Management Agreement also provides that in the event the
expenses of the Fund (including the fees of the Manager, but excluding interest,
taxes, brokerage commissions, distribution fees and litigation and
indemnification expenses and other extraordinary expenses not incurred in the
ordinary course of the Fund's business) for any fiscal year exceed the lowest
applicable annual expense limitation established and enforced pursuant to the
statutes or regulations of any jurisdiction in which shares of the Fund are then
qualified for offer and sale, the Manager will reduce its fee by the amount of
such excess. Expenses in excess of the total compensation payable to PMF will be
paid by PMF. Any such reductions of payments are subject to readjustment during
the year. No such reductions were required during the fiscal year ended December
31, 1994. Currently, the Fund believes that the most restrictive expense
limitation of state securities commissions is 2 1/2% of the Fund's average daily
net assets up to $30 million, 2% of the next $70 million of such assets and
1 1/2% of such assets in excess of $100 million.

In connection with its management of the corporate affairs of the Fund, PMF
bears the following expenses:

(a) the salaries and expenses of all personnel of the Fund and the
Manager, except the fees and expenses of Directors who are not affiliated
persons of the Manager or the Fund's investment adviser;

(b) all expenses incurred by the Manager or by the Fund in connection
with managing the ordinary course of the Fund's business, other than those
assumed by the Fund, as described below; and

(c) the costs and expenses payable to PIC pursuant to the subadvisory
agreement between PMF and PIC (the Subadvisory Agreement).

Under the terms of the Management Agreement, the Fund is responsible for
the payment of the following expenses, including (a) the fees payable to the
Manager, (b) the fees and expenses of Directors who are not affiliated with PMF
or the Fund's investment adviser, (c) the fees and certain expenses of the
Fund's Custodian and Transfer and Dividend Disbursing Agent, including the cost
of providing records to the Manager in connection with its obligation of
maintaining required records of the Fund and of pricing the Fund's shares, (d)
the fees and charges of the Fund's legal counsel and independent accountants,
(e) brokerage commissions and any issue or transfer taxes chargeable to the Fund
in connection with its securities transactions, (f) all taxes and corporate fees
payable by the Fund to governmental agencies, (g) the fees of any trade
association of which the Fund is a member, (h) the cost of stock certificates
representing shares of the Fund, (i) the cost of fidelity and liability
insurance, (j) the fees and expenses involved in registering and maintaining
registration of the Fund and of its shares with the SEC and registering the Fund
as a broker or dealer and qualifying its shares under state securities laws,
including the preparation and printing of the Fund's registration statements and
prospectuses for such purposes, (k) allocable communications expenses with
respect to investor services and all expenses of shareholders' and Directors'
meetings and of preparing, printing and mailing reports, proxy statements and
prospectuses to shareholders, (l) litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the Fund's
business, and (m) distribution expenses.

The Management Agreement also provides that PMF will not be liable for any
error of judgment or for any loss suffered by the Fund in connection with the
matters to which the Management Agreement relates, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith, gross
negligence or reckless disregard of duty. The Management Agreement provides that
it will terminate automatically if assigned, and that it may be terminated
without penalty by either party upon not more than 60 days' nor less than 30
days' written notice. The Management Agreement provides that it will continue in
effect for a period of more than two years from the date of execution only so
long as such continuance is specifically approved at least annually in
accordance with the requirements of the Investment Company Act.

The Management Agreement was last approved by the Board of Directors of the
Fund, including a majority of the Directors who are not parties to such contract
or interested persons of such parties (as defined in the Investment Company
Act), on May 11, 1994, and was approved by shareholders of the Fund on April 27,
1988.

For the fiscal years ended December 31, 1994, 1993 and 1992, PMF received
net management fees of $21,320,747, $23,332,701, and $21,422,436, respectively.

B-8

<PAGE>

PMF has entered into the Subadvisory Agreement with PIC, a wholly-owned
subsidiary of Prudential. The Subadvisory Agreement provides that PIC furnish
investment advisory services in connection with the management of the Fund. In
connection therewith, PIC is obligated to keep certain books and records of the
Fund. PMF continues to have responsibility for all investment advisory services
pursuant to the Management Agreement and supervises PIC's performance of such
services. PIC is reimbursed by PMF for the reasonable costs and expenses
incurred by PIC in furnishing those services.

The Subadviser maintains a corporate credit unit which provides credit
analysis and research on taxable fixed-income securities including money market
instruments. The portfolio manager consults routinely with the credit unit in
managing the Fund's portfolio. The credit unit staff, including 7 credit
analysts, reviews on an ongoing basis commercial paper issuers, commercial
banks, non-bank financial institutions and issuers of other taxable fixed-income
obligations. Credit analysts have broad access to research and financial
reports, data retrieval services and industry analysts. They maintain
relationships with the management of corporate issuers and from time to time
visit companies in whose securities the Fund may invest.

The Subadvisory Agreement was last approved by the Board of Directors,
including a majority of the Directors who are not parties to such contract or
interested persons of such parties, as defined in the Investment Company Act, on
May 11 1994, and was approved by shareholders of the Fund on April 27, 1988.

The Subadvisory Agreement provides that it will terminate in the event of
its assignment (as defined in the Investment Company Act) or upon the
termination of the Management Agreement. The Subadvisory Agreement may be
terminated by the Fund, PMF or PIC upon not less than 30 days' or more than 60
days' written notice. The Subadvisory Agreement provides that it will continue
in effect for a period of more than two years from its execution only so long as
such continuance is specifically approved by the Board of Directors at least
annually in accordance with the requirements of the Investment Company Act.

The Manager and the Subadviser are subsidiaries of Prudential which, as of
December 31, 1994, is one of the largest financial institutions in the world and
the largest insurance company in North America. Prudential has been engaged in
the insurance business since 1875. In July 1994, Institutional Investor ranked
Prudential the second largest institutional money manager of the 300 largest
money management organizations in the United States as of December 31, 1993.

DISTRIBUTOR

Prudential Mutual Fund Distributors, Inc. (PMFD), One Seaport Plaza, New
York, New York 10292, acts as the Fund's distributor.

Plan of Distribution

See "How the Fund is Managed--Distributor" in the Prospectus.

Under the Fund's Plan of Distribution and the Distribution Agreement with
PMFD, the Fund pays PMFD, as distributor, a distribution fee of up to 0.125% of
the average daily net assets of the Fund, computed daily and payable monthly, to
reimburse PMFD for distribution expenses.

For the fiscal year ended December 31, 1994, PMFD incurred distribution
expenses in the aggregate of $8,839,226, all of which was recovered through the
distribution fee paid by the Fund.

It is estimated that of this amount, 0.8% ($68,030) was spent on printing
and mailing of prospectuses to other than current shareholders and 99.2%
($8,771,196) on the aggregate of (i) account servicing fee credits to Prudential
Securities branch offices for payments of account servicing fees to account
executives (85.3% or 7,542,382) and (ii) an allocation of overhead and other
branch office distribution-related expenses (13.9% or 1,228,814). The term
"overhead and other branch office distribution-related expenses" represents
(a) the expenses of operating branch offices of Prudential Securities and Pruco
Securities Corporation (Prusec), affiliated broker-dealers, in connection with
the sale of Fund shares, including lease costs, the salaries and employee
benefits of operations and sales support personnel, utility costs,
communications costs and the costs of stationery and supplies, (b) the costs of
client sales seminars, (c) travel expenses of mutual fund sales coordinators to
promote the sale of Fund shares and (d) other incidental expenses relating to
branch promotion of Fund sales. No interest or carrying charges are included as
part of the Fund's distribution expenses.

Pursuant to Rule 12b-1 under the Investment Company Act, the Plan of
Distribution was last approved by the Board of Directors, including a majority
of the Directors who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan, cast in person at a meeting called for the
purpose of voting on the Plan, on May 11, 1994. The Plan of Distribution was
approved by a majority of the Fund's outstanding voting securities on April 27,
1988.

The Plan continues in effect from year to year, provided that each such
continuance is approved at least annually by a vote of the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreement related to the Plan (the Rule 12b-1 Directors) cast in
person at a meeting called for the purpose of voting on such continuance. The
Plan may be terminated at any time, without penalty, by the vote of a majority
of
B-9

<PAGE>

the Rule 12b-1 Directors or by the vote of the holders of a majority of the
outstanding voting securities of the Fund on not more than 30 days' written
notice to any other party to the Plan. The Plan may not be amended to increase
materially the amounts to be spent by the Fund thereunder without shareholder
approval, and all material amendments are required to be approved by the Board
of Directors in the manner described above. The Plan will automatically
terminate in the event of its assignment.

Pursuant to the Plan, the Directors will review at least quarterly a
written report of the distribution expenses incurred on behalf of the Fund by
PMFD. The report includes an itemization of the distribution expenses and the
purpose of such expenditures. In addition, as long as the Plan remains in
effect, the selection and nomination of Directors shall be committed to the Rule
12b-1 Directors.

Pursuant to the Distribution Agreement, the Fund has agreed to indemnify
PMFD to the extent permitted by applicable law against certain liabilities under
the Securities Act of 1933, as amended. The Distribution Agreement was last
approved by the Board of Directors, including a majority of the Rule 12b-1
Directors on May 11, 1994.

On October 21, 1993, PSI entered into an omnibus settlement with the SEC,
state securities regulators in 51 jurisdictions and the NASD to resolve
allegations that PSI sold interests in more than 700 limited partnerships (and a
limited number of other types of securities) from January 1, 1980 through
December 31, 1990, in violation of securities laws to persons for whom such
securities were not suitable in light of the individuals' financial condition or
investment objectives. It was also alleged that the safety, potential returns
and liquidity of the investments had been misrepresented. The limited
partnerships principally involved real estate, oil and gas producing properties
and aircraft leasing ventures. The SEC Order (i) included findings that PSI's
conduct violated the federal securities laws and that an order issued by the SEC
in 1986 requiring PSI to adopt, implement and maintain certain supervisory
procedures had not been complied with; (ii) directed PSI to cease and desist
from violating the federal securities laws and imposed a $10 million civil
penalty; and (iii) required PSI to adopt certain remedial measures including
the establishment of a Compliance Committee of its Board of Directors. Pursuant
to the terms of the SEC settlement, PSI established a settlement fund in the
amount of $330,000,000 and procedures, overseen by a court approved Claims
Administrator, to resolve legitimate claims for compensatory damages by
purchasers of the partnership interests. PSI has agreed to provide additional
funds, if necessary, for that purpose. PSI's settlement with the state
securities regulators included an agreement to pay a penalty of $500,000 per
jurisdiction. PSI consented to a censure and to the payment of a $5,000,000 fine
in settling the NASD action. In settling the above referenced matters, PSI
neither admitted nor denied the allegations asserted against it.

On January 18, 1994, PSI agreed to the entry of a Final Consent Order and a
Parallel Consent Order by the Texas Securities Commissioner. The firm also
entered into a related agreement with the Texas Securities Commissioner. The
allegations were that the firm had engaged in improper sales practices and other
improper conduct resulting in pecuniary losses and other harm to investors
residing in Texas with respect to purchases and sales of limited partnership
interests during the period of January 1, 1980 through December 31, 1990.
Without admitting or denying the allegations, PSI consented to a reprimand,
agreed to cease and desist from future violations, and to provide voluntary
donations to the State of Texas in the aggregate amount of $1,500,000. The firm
agreed to suspend the creation of new customer accounts, the general
solicitation of new accounts, and the offer for sale of securities in or from
PSI's North Dallas office to new customers during a period of twenty consecutive
business days, and agreed that its other Texas offices would be subject to the
same restrictions for a period of five consecutive business days. PSI also
agreed to institute training programs for its securities salesmen in Texas.

On October 27, 1994, Prudential Securities Group, Inc. and PSI entered into
agreements with the United States Attorney deferring prosecution (provided PSI
complies with the terms of the agreement for three years) for any alleged
criminal activity related to the sale of certain limited partnership programs
from 1983 to 1990. In connection with these agreements, PSI agreed to add the
sum of $330,000,000 to the Fund established by the SEC and executed a
stipulation providing for a reversion of such funds to the United States Postal
Inspection Service. PSI further agreed to obtain a mutually acceptable outside
director to sit on the Board of Directors of PSG and the Compliance Committee of
PSI. The new director will also serve as an independent "ombudsman" whom PSI
employees can call anonymously with complaints about ethics and compliance.
Prudential Securities shall report any allegations or instances of criminal
conduct and material improprieties to the new director. The new director will
submit compliance reports which shall identify all such allegations or instances
of criminal conduct and material improprieties every three months for a
three-year period.

PURCHASE AND REDEMPTION OF FUND SHARES

Purchase of Shares

The Fund reserves the right to reject any initial or subsequent purchase
order (including an exchange) and the right to limit investments in the Fund
solely to existing or past shareholders of the Fund.

Reopening an Account

Subject to the minimum investment restrictions, an investor may reopen an
account, without filing a new application form, at any time during the calendar
year the account is closed, provided that the information on the old form is
still applicable.

B-10

<PAGE>

Redemption of Shares

Investors who purchase shares directly from Prudential Mutual Fund
Services, Inc. (PMFS or the Transfer Agent) may use the following procedures:

Check Redemption. At a shareholder's request, State Street Bank and Trust
Company (State Street) will establish a personal checking account for the
shareholder. Checks drawn on this account can be made payable to the order of
any person in any amount equal to or greater than $500. The payee of the check
may cash or deposit it like any other check drawn on a bank. When such a check
is presented to State Street for payment, State Street presents the check to the
Fund as authority to redeem a sufficient number of shares in a shareholder's
account in the Fund to cover the amount of the check. This enables the
shareholder to continue earning daily dividends until the check is cleared.
Canceled checks are returned to the shareholder by State Street.

Shareholders are subject to State Street's rules and regulations governing
checking accounts, including the right of State Street not to honor checks in
amounts exceeding the value of the shareholder's account at the time the check
is presented for payment.

Shares for which certificates have been issued are not available for
redemption to cover checks. A shareholder should be certain that adequate shares
for which certificates have not been issued are in his or her account to cover
the amount of the check. See "Shareholder Guide--How to Sell Your Shares" in
the Prospectus. Since the dollar value of an account is constantly changing, it
is not possible for a shareholder to determine in advance the total value of his
or her account so as to write a check for the redemption of the entire account.

The Fund reserves the right to assess a service charge, payable to State
Street, to establish a checking account and to order checks. State Street, PMFS
and the Fund have reserved the right to modify this checking account privilege
or to place a charge for each check presented for payment for any individual
account or for all accounts in the future.

The Fund, PMFS or State Street may terminate Check Redemption at any time
upon 30 days' notice to participating shareholders. To receive further
information, contact Prudential Mutual Fund Services, Inc., Attention:
Redemption Services, P.O. Box 15010, New Brunswick, New Jersey 08906-5010, or
telephone (800) 225-1852 (toll-free). Check Redemption is not available to
investors for whom Prudential Securities has purchased shares.

Expedited Redemption. In order to use Expedited Redemption, a shareholder
may so designate at the time the initial application form is filed or at a later
date. Once the Expedited Redemption authorization form has been completed, the
signature(s) on the authorization form guaranteed as set forth below and the
form returned to PMFS, requests for redemption may be made by telegraph, letter
or telephone. A signature guarantee is not required under Expedited Redemption
once the authorization form is properly completed and returned. The Expedited
Redemption privilege may be used only to redeem shares in an amount of $200 or
more, except that, if an account for which Expedited Redemption is requested has
a net asset value of less than $200, the entire account must be redeemed. The
proceeds of redeemed shares in the amount of $1,000 or more are transmitted by
wire to the shareholder's account at a domestic commercial bank which is a
member of the Federal Reserve System. Proceeds of less than $1,000 are forwarded
by check to the shareholder's designated bank account. See "Shareholder
Guide--How to Sell Your Shares" in the Prospectus.

To request Expedited Redemption by telephone, a shareholder should call
PMFS at (800) 225-1852. Calls must be received by PMFS before 4:30 P.M., New
York time, in order for the redemption to be effective on that day. Requests by
letter should be addressed to Prudential Mutual Fund Services, Inc., Attention:
Account Maintenance, P.O. Box 15015, New Brunswick, New Jersey 08906-5015.

In order to change the name of the commercial bank or account designated to
receive redemption proceeds, it is necessary to execute a new Expedited
Redemption authorization form and submit it to PMFS at the address set forth
above. Each signature must be guaranteed by an "eligible guarantor
institution," which includes any bank, broker, dealer or credit union. The
Transfer Agent reserves the right to request additional information from, and
make reasonable inquiries of, any eligible guarantor institution. Guarantees
must be signed by an authorized signatory of the eligible guarantor institution,
and "Signature Guaranteed" should appear with the signature. For clients of
Pruco Securities Corporation (Prusec) signature guarantees may be obtained from
the agency or office manager of most Prudential Insurance and Financial Services
or Preferred Services offices. PMFS may request further documentation from
corporations, executors, administrators, trustees or guardians.

Regular Redemption. Shareholders may redeem their shares by sending to
Prudential Mutual Fund Services, Inc., Attention: Redemption Services, P.O. Box
15010, New Brunswick, New Jersey 08906-5010, a written request, accompanied by
duly endorsed stock certificates, if issued. In this case, all stock
certificates and all written requests for redemption must be endorsed by the
shareholder with the signature guaranteed, as described above. PMFS may request
further documentation from corporations, executors, administrators, trustees or
guardians. Regular redemption is made by check mailed to the shareholder's
address.

B-11

<PAGE>

SHAREHOLDER INVESTMENT ACCOUNT

Upon the initial purchase of shares of the Fund, a Shareholder Investment
Account is established for each investor under which a record of the shares held
is maintained by the Transfer Agent. If a stock certificate is desired, it must
be requested in writing for each transaction. Certificates are issued only for
full shares and may be redeposited in the account at any time. There is no
charge to the investor for issuance of a certificate. Whenever a transaction
takes place in the Shareholder Investment Account, the shareholder will be
mailed a statement showing the transaction and the status of such account.

Procedure for Multiple Accounts

Special procedures have been designed for banks and other institutions that
wish to open multiple accounts. An institution may open a single master account
by filing an Application and Order Form with PMFS, signed by personnel
authorized to act for the institution. Individual sub-accounts may be opened at
the time the master account is opened by listing them, or they may be added at a
later date by written advice or by filing forms supplied by PMFS. Procedures are
available to identify sub-accounts by name and number within the master account
name. The investment minimums described in the Prospectus under "Shareholder
Guide--How to Buy Shares of the Fund" are applicable to the aggregate amounts
invested by a group, and not to the amount credited to each sub-account.

PMFS provides each institution with a written confirmation for each
transaction in a sub-account and, on a monthly basis, with a statement which
sets forth for each master account its share balance and income earned for the
month. In addition, each institution receives a statement for each individual
account setting forth transactions in the sub-account for the year-to-date, the
total number of shares owned as of the dividend payment date and the dividends
paid for the current month, as well as for the year-to-date. For further
information on the sub-accounting system and procedures, contact PMFS.

Exchange Privilege

The Fund makes available to its shareholders the privilege of exchanging
their shares for shares of certain other Prudential Mutual Funds, including one
or more specified money market funds, subject in each case to the minimum
investment requirements of such funds. Class A shares of such other Prudential
Mutual Funds may also be exchanged for shares of the Fund. All exchanges are
made on the basis of relative net asset value next determined after receipt of
an order in proper form and any applicable sales charge. An exchange will be
treated as a redemption and purchase for tax purposes. Shares may be exchanged
for shares of another fund only if shares of such fund may legally be sold under
applicable state laws.

It is contemplated that the exchange privilege may be applicable to new
mutual funds whose shares may be distributed by the Distributor.

Shareholders of the Fund may exchange their shares for Class A shares of
the Prudential Mutual Funds and shares of the money market funds specified
below.

The following other money market funds participate in the Class A Exchange
Privilege:

Prudential California Municipal Fund
(California Money Market Series)
Prudential Government Securities Trust
(Money Market Series)
(U.S. Treasury Money Market Series)
Prudential Municipal Series Fund
(Connecticut Money Market Series)
(Massachusetts Money Market Series)
(New Jersey Money Market Series)
(New York Money Market Series)
Prudential Tax-Free Money Fund

Shareholders of the Fund may not exchange their shares for Class B or Class
C shares of the Prudential Mutual Funds or shares of Prudential Special Money
Market Fund, a money market fund, except that shares acquired prior to January
22, 1990 subject to a contingent deferred sales charge can be exchanged for
Class B shares.

Additional details about the Exchange Privilege and prospectuses for each
of the Prudential Mutual Funds are available from the Fund's Transfer Agent,
Prudential Securities or Prusec. The Exchange Privilege may be modified,
terminated or suspended on sixty days' notice, and any fund, including the Fund,
or the Distributor, has the right to reject any exchange application relating to
such fund's shares.

B-12

<PAGE>

Automatic Savings Accumulation Plan (ASAP)

Under ASAP, an investor may arrange to have a fixed amount automatically
invested in shares of the Fund monthly by authorizing his or her bank account or
Prudential Securities Account (including a Command Account) to be debited to
invest specified dollar amounts in shares of the Fund. The investor's bank must
be a member of the Automatic Clearing House System. Stock certificates are not
issued to ASAP participants.

Further details about this program and an application form are available
from the Transfer Agent, Prudential Securities or Prusec.

Systematic Withdrawal Plan

A systematic withdrawal plan is available for shareholders through
Prudential Securities or the Transfer Agent. Such withdrawal plan provides for
monthly or quarterly checks in any amount, except as provided below, up to the
value of the shares in the shareholder's account.

In the case of shares held through the Transfer Agent (i) a $10,000 minimum
account value applies, (ii) withdrawals may not be for less than $100 and (iii)
the shareholder must elect to have all dividends and/or distributions
automatically reinvested in additional full and fractional shares at net asset
value on shares held under this plan.

Prudential Securities and the Transfer Agent act as agents for the
shareholder in redeeming sufficient full and fractional shares to provide the
amount of the periodic withdrawal payment. The systematic withdrawal plan may be
terminated at any time, and the Distributor reserves the right to initiate a fee
of up to $5 per withdrawal, upon 30 days' written notice to the shareholder.

Withdrawal payments should not be considered as dividends, yield or income.
If periodic withdrawals continuously exceed reinvested dividends and
distributions, the shareholder's original investment will be correspondingly
reduced and ultimately exhausted. Furthermore, each withdrawal constitutes a
redemption of shares, and any gain or loss realized must be recognized for
federal income tax purposes. Each shareholder should consult his or her own tax
adviser with regard to the tax consequences of the systematic withdrawal plan,
particularly if used in connection with a retirement plan.

Tax-Deferred Retirement Plans

Various tax-deferred retirement plans, including a 401(k) plan,
self-directed individual retirement accounts and "tax-deferred accounts" under
Section 403(b)(7) of the Internal Revenue Code are available through the
Distributor. These plans are for use by both self-employed individuals and
corporate employers. These plans permit either self-direction of accounts by
participants, or a pooled account arrangement. Information regarding the
establishment of these plans, the administration, custodial fees and other
details are available from Prudential Securities or the Transfer Agent.

Investors who are considering the adoption of such a plan should consult
with their own legal counsel or tax adviser with respect to the establishment
and maintenance of any such plan.

Tax-Deferred Retirement Accounts

Individual Retirement Accounts. An individual retirement account (IRA)
permits the deferral of federal income tax on income earned in the account until
the earnings are withdrawn. The following chart represents a comparison of the
earnings in a personal savings account with those in an IRA, assuming a $2,000
annual contribution, an 8% rate of return and a 39.6% federal income tax bracket
and shows how much more retirement income can accumulate within an IRA as
opposed to a taxable individual savings account.

<TABLE>
<CAPTION>
Tax-Deferred Compounding<F1>
Contributions Personal
Made Over: Savings IRA
- -------------- --------- ---------
<S> <C> <C>
10 years $ 26,165 $ 31,291
15 years 44,675 58,649
20 years 68,109 98,846
25 years 97,780 157,909
30 years 135,346 244,692

<FN>
- ---------------
<F1> The chart is for illustrative purposes only and does not represent the
performance of the Fund or any specific investment. It shows taxable versus
tax-deferred compounding for the periods and on the terms indicated. Earnings in
the IRA account will be subject to tax when withdrawn from the account.
</FN>
</TABLE>

B-13

<PAGE>

DIVIDENDS

The Fund's net income is declared as dividends daily and is automatically
reinvested monthly in additional shares of the Fund unless the shareholder
elects in writing not less than five full business days prior to the payable
date to receive such distribution in cash. The Fund endeavors to maintain its
net asset value at $1.00 per share. As a result of a significant expense or
realized loss, it is possible that the Fund's net asset value may fall below
$1.00 per share. Should the Fund incur or anticipate any unusual or unexpected
significant expense or loss which would disproportionately affect the Fund's
income for a particular period, the Board of Directors at that time would
consider whether to adhere to the present dividend policy described in the
Prospectus or to revise it in light of the then prevailing circumstances in
order to ameliorate to the extent possible the disproportionate effect of such
expense or loss on then existing shareholders. Such expenses or losses may
nevertheless result in a shareholder's receiving no dividends for the period
during which he or she held shares of the Fund and in his or her receiving a
price per share upon redemption lower than that which he or she paid.

Dividends derived from investment income received by the Fund on portfolio
securities, together with distributions of any net short-term capital gains, are
taxable to the shareholders as ordinary income. Distributions of net long-term
capital gains are taxed to the shareholders at capital gains rates regardless of
the length of their holding period of Fund shares. However, the Fund's portfolio
generally will be managed in such a way as not to realize any net long-term
capital gains. Dividends and distributions are taxable to shareholders even if
reinvested in additional shares.

NET ASSET VALUE

The Fund uses the amortized cost method of valuation to determine the value
of its portfolio securities. In that regard, the Fund's Board of Directors has
determined to maintain a dollar-weighted average portfolio maturity of 90 days
or less, to purchase only instruments having remaining maturities of thirteen
months or less, and to invest only in securities determined by the Manager or
the Subadviser, under the direction of the Board of Directors, to be of minimal
credit risk and of eligible quality. Subject to the Fund's compliance with the
conditions of applicable rules promulgated by the SEC relating to the amortized
cost method of valuation, the remaining maturity of an instrument held by the
Fund that is subject to a put is deemed to be the period remaining until the
principal amount can be recovered through demand or, in the case of a variable
rate instrument, the next interest reset date, if longer. The value assigned to
the put is zero. The Board of Directors also has established procedures designed
to stabilize, to the extent reasonably possible, the Fund's price per share as
computed for the purpose of sales and redemptions at $1.00. Such procedures will
include review of the Fund's portfolio holdings by the Board, at such intervals
as deemed appropriate, to determine whether the Fund's net asset value
calculated by using available market quotations deviates from $1.00 per share
based on amortized cost. The extent of any deviation will be examined by the
Board, and if such deviation exceeds 1/2 of 1%, the Board will promptly consider
what action, if any, will be initiated. In the event the Board of Directors
determines that a deviation exists which may result in material dilution or
other unfair results to investors or existing shareholders, the Board will take
such corrective action as it regards necessary and appropriate, including the
sale of portfolio instruments prior to maturity to realize gains or losses, the
shortening of average portfolio maturity, the withholding of dividends or the
establishment of net asset value per share by using available market quotations.

PORTFOLIO TRANSACTIONS

The Manager is responsible for decisions to buy and sell securities for the
Fund, the selection of brokers and dealers to effect the transactions and the
negotiation of brokerage commissions, if any. For purposes of this section the
term "Manager" includes the Subadviser. The Fund does not normally incur any
brokerage commission expense on such transactions. In the market for money
market instruments, securities are generally traded on a "net" basis, with
dealers acting as principal for their own accounts without a stated commission,
although the price of the security usually includes a profit to the dealer. In
underwritten offerings, securities are purchased at a fixed price which includes
an amount of compensation to the underwriter, generally referred to as the
underwriter's concession or discount. On occasion, certain money market
instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid.

In placing orders for portfolio securities of the Fund, the Manager is
required to give primary consideration to obtaining the most favorable price and
efficient execution. This means that the Manager will seek to execute each
transaction at a price and commission, if any, which provide the most favorable
total cost or proceeds reasonably attainable under the circumstances. While the
Manager generally seeks reasonably competitive spreads or commissions, the Fund
will not necessarily be paying the lowest spread or commission available. Within
the framework of this policy, the Manager may consider research and investment
services provided by brokers or dealers who effect or are parties to portfolio
transactions of the Fund, the Manager or the Manager's other clients. Such
research and investment services are those which brokerage houses customarily
provide to institutional investors and include statistical and economic data and
research reports on particular companies and industries. Such services are used
by the Manager in connection with all of its investment activities, and some of
such services obtained in connection with the execution of transactions for the
Fund may be used in managing other investment accounts. Conversely, brokers
furnishing such services may be selected for the execution of transactions of
such other accounts, whose aggregate assets are far larger than those of the
Fund, and the services furnished by such

B-14

<PAGE>

brokers may be used by the Manager in providing investment management for the
Fund. While such services are useful and important in supplementing its own
research and facilities, the Manager believes that the value of such services is
not determinable and does not significantly reduce expenses. The Fund does not
reduce the fee it pays to the Manager by any amount that may be attributed to
the value of such services. The Fund will not effect any securities transactions
with or through Prudential Securities as broker or dealer. The Fund paid no
brokerage commissions for the fiscal years ended December 31, 1994, 1993 and
1992.

TAXES

Federal

The Fund has elected to qualify, and intends to remain qualified, as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the Internal Revenue Code). This relieves the Fund (but not
its shareholders) from paying federal income tax on net investment income and
capital gains, if any, realized during the taxable year which is distributed to
shareholders, provided that it distributes at least 90% of its net investment
income and short-term capital gains, and permits net capital gains, if any, of
the Fund (i.e., the excess of net long-term capital gains over net short-term
capital losses) to be treated as long-term capital gains of the shareholders,
regardless of how long shareholders have held their shares in the Fund.

Qualification of the Fund as a regulated investment company requires, among
other things, that (a) at least 90% of the Fund's annual gross income (without
reduction for losses from the sale or other disposition of securities) be
derived from dividends, interest, proceeds from loans of securities and gains
from the sale or other disposition of securities, options thereon, futures
contracts, options thereon, forward contracts and foreign currencies; (b) the
Fund derives less than 30% of its gross income from gains (without reduction for
losses) from the sale or other disposition of securities, options thereon,
futures contracts, options thereon, forward contracts and foreign currencies
held for less than three months and (c) the Fund diversifies its holdings so
that, at the end of each quarter of the taxable year, (i) at least 50% of the
market value of its assets is represented by cash, U.S. Government securities
and other securities limited in respect of any one issuer to an amount not
greater than 5% of the assets of the Fund and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its assets
is invested in the securities of any one issuer (other than U.S. Government
securities).

Gains or losses on sales of securities by the Fund will be treated as
long-term capital gains or losses if the securities have been held by it for
more than one year. Other gains or losses on the sale of securities will be
short-term capital gains or losses. In addition, debt securities acquired by the
Fund may be subject to original issue discount and market discount rules.

The Fund is required to distribute 98% of its ordinary income in the same
calendar year in which it is earned. The Fund is also required to distribute
during the calendar year 98% of the capital gain net income it earned during the
twelve months ending on October 31 of such calendar year, as well as all
undistributed ordinary income and undistributed capital gain net income from the
prior year or the twelve-month period ending on October 31 of such prior year,
respectively. To the extent it does not meet these distribution requirements,
the Fund will be subject to a non-deductible 4% excise tax on the undistributed
amount. The Fund intends to distribute its income and capital gains in the
manner necessary to avoid imposition of the 4% excise tax. For purposes of this
excise tax, income on which the Fund pays income tax is treated as distributed.

Distributions of net investment income and of the excess of net short-term
capital gains over net long-term capital losses will be taxable to the
shareholder at ordinary income rates regardless of whether the shareholder
receives such distributions in additional shares or cash. Distributions of net
capital gains (i.e., the excess of net long-term capital gains over net
short-term capital losses), if any, are taxable as long-term capital gains
regardless of how long the investor has held his or her shares. However, if a
shareholder holds shares in the Fund for not more than six months, then any loss
recognized on the sale of such shares will be treated as long-term capital loss
to the extent of any distribution on the shares which was treated as long-term
capital gain. Because none of the Fund's net income is anticipated to arise from
dividends on common or preferred stock, none of its distributions to
shareholders will be eligible for the dividends received deduction for
corporations under the Internal Revenue Code. Shareholders will be notified
annually by the Fund as to the federal tax status of distributions made by the
Fund.

Any gain or loss realized upon a sale or redemption of shares by a
shareholder who is not a dealer in securities will be treated as long-term
capital gain or loss if the shares have been held more than one year and
otherwise as short-term capital gain or loss. Any such loss, however, although
otherwise treated as a short-term capital loss, will be treated as long-term
capital loss to the extent of any net long-term capital gain distributions
received by the shareholder, if the shares have been held for six months or
less.

A shareholder may realize a gain or loss on the redemption of his or her
shares depending upon the net asset value when redeemed. The Fund, however,
intends to maintain a constant net asset value.

In general, tax-exempt shareholders will not be required to pay taxes on
amounts distributed to them. If such shareholders incurred debt in order to
acquire or hold their shares in the Fund, amounts distributed to them may be
subject to the unrelated business income tax.

B-15

<PAGE>

State and Local

Under the laws of certain states, distributions of net income may be
taxable to shareholders as income even though a portion of such distributions
may be derived from interest on U.S. Government obligations which, if realized
directly, would be exempt from state income taxes. Shareholders are advised to
consult their tax advisers concerning the application of state and local taxes.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
AND INDEPENDENT ACCOUNTANTS

State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, serves as Custodian for the Fund's portfolio securities and
cash, and in that capacity maintains certain financial and accounting books and
records pursuant to an agreement with the Fund.

Prudential Mutual Fund Services, Inc. (PMFS), Raritan Plaza One, Edison,
New Jersey 08818, serves as Transfer and Dividend Disbursing Agent and in those
capacities maintains certain books and records for the Fund. PMFS is a
wholly-owned subsidiary of PMF. PMFS provides customary transfer agency services
to the Fund, including the handling of shareholder communications, the
processing of shareholder transactions, the maintenance of shareholder account
records, payment of dividends and distributions and related functions. For these
services, PMFS receives an annual fee per shareholder account, a new account
set-up fee for each manually established account and a monthly inactive zero
balance account fee per shareholder account. PMFS is also reimbursed for its
out-of-pocket expense, including but not limited to postage, stationery,
printing, allocable communications expenses and other costs. For the fiscal year
ended December 31, 1994, the Fund incurred fees of approximately $15,538,800 for
such services. As of December 31, 1994, approximately $2,661,400 of such fees
were due to PMFS.

Deloitte & Touche LLP, Two World Financial Center, New York, New York
10281, serves as the Fund's independent public accountants and, in that
capacity, audits the Fund's annual financial statements.

B-16

<PAGE>
PRUDENTIAL MONEYMART ASSETS Portfolio of Investments
December 31, 1994
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
BANK NOTES--9.9%
First National Bank of
Chicago
$131,500 5.69%, 2/22/95............. $ 131,500,000
17,000 5.18%, 2/27/95............. 16,984,902
NationsBank of Dallas,
Texas, NA
55,000 6.03%, 1/31/95............. 55,000,000
PNC Bank, Ohio, NA
36,000 3.50%, 1/31/95............. 35,996,238
PNC Bank, Pittsburgh
Pennsylvania, NA
100,000 5.52%, 1/6/95.............. 99,998,893
119,000 5.15%, 2/22/95............. 119,000,320
Republic National Bank of
New York
193,000 4.30%, 3/8/95.............. 192,905,864
--------------
Total Bank Notes
(amortized cost
$651,386,217)............ 651,386,217
--------------
CERTIFICATES OF DEPOSIT--
EURODOLLAR--0.9%
Bayerische Vereinsbank AG
59,000 5.83%, 1/23/95
(amortized cost
$59,000,714)............. 59,000,714
--------------
CERTIFICATES OF DEPOSIT--
YANKEE--18.4%
Bank of Tokyo
100,000 6.46%, 3/30/95............. 100,000,000
Bank of Montreal
345,000 5.80%, 1/30/95............. 345,000,000
Caisse Nationale De Credit
Agricole
9,000 5.56%, 1/30/95............. 8,998,139
Fuji Bank, Ltd.
75,000 5.83%, 1/17/95............. 75,000,000
100,000 5.91%, 1/23/95............. 100,000,000
National Westminster Bank,
Plc.
35,000 5.54%, 1/31/95............. 34,991,966
Sanwa Bank Ltd.
45,000 5.85%, 1/23/95............. 45,000,000
50,000 6.04%, 2/2/95.............. 50,000,000
Societe Generale
North America, Inc.
67,000 5.65%, 2/6/95.............. 67,000,000
263,000 5.65%, 2/7/95.............. 263,000,000
Sumitomo Bank, Ltd.
13,000 5.89%, 1/25/95............. 13,000,000
50,000 5.96%, 1/30/95............. 50,000,000
53,000 6.06%, 2/1/95.............. 53,000,000
--------------
Total Certificates of
Deposit--Yankee
(amortized cost
$1,204,990,105).......... 1,204,990,105
--------------
COMMERCIAL PAPER--51.8%
American General Finance
Corp.
15,000 5.46%, 1/17/95............. 14,963,600
American Home Products
Corp.
145,763 5.90%, 1/31/95............. 145,046,332
American Honda Finance
Corp.
23,600 5.98%, 1/31/95............. 23,482,393
12,100 6.00%, 1/31/95............. 12,039,500
Aristar, Inc.
6,000 5.85%, 1/17/95............. 5,984,400
11,000 5.54%, 1/23/95............. 10,962,759
Associates Corp. of North
America
10,000 5.77%, 1/25/95............. 9,961,533
163,000 5.77%, 1/30/95............. 162,242,367
50,000 6.05%, 1/30/95............. 49,756,319
14,000 5.77%, 1/31/95............. 13,932,683
27,000 6.25%, 3/14/95............. 26,662,500
Bankers Trust New York
Corp.
200,000 5.44%, 1/23/95............. 199,335,111
</TABLE>

See Notes to Financial Statements.
B-17

<PAGE>
PRUDENTIAL MONEYMART ASSETS
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--(cont'd.)
Beneficial Corp.
$ 40,000 6.25%, 3/15/95............. $ 39,493,056
Chrysler Financial Corp.
45,000 5.75%, 1/18/95............. 44,877,813
83,000 5.75%, 1/19/95............. 82,761,375
Ciesco, Inc.
12,000 5.50%, 1/11/95............. 11,981,667
CIT Group Holdings, Inc.
10,000 5.50%, 1/17/95............. 9,975,556
100,000 5.77%, 1/31/95............. 99,519,167
44,000 5.97%, 2/1/95.............. 43,773,803
39,000 6.27%, 3/13/95............. 38,517,733
Commercial Credit Co.
24,000 5.75%, 1/31/95............. 23,885,000
Dean Witter, Discover & Co.
22,000 5.78%, 1/23/95............. 21,922,291
8,859 5.97%, 2/1/95.............. 8,813,457
Deere & Co.
46,000 6.05%, 2/1/95.............. 45,760,353
Duracell Inc.
11,000 6.30%, 2/10/95............. 10,923,000
Ford Motor Credit Corp.
342,900 5.78%, 2/1/95.............. 341,193,311
General Electric Capital
Corp.
37,000 5.43%, 1/12/95............. 36,938,611
36,000 5.50%, 1/12/95............. 35,939,500
100,000 5.50%, 1/13/95............. 99,816,667
99,000 5.78%, 2/2/95.............. 98,491,360
69,000 6.45%, 4/18/95............. 67,677,213
General Motors Acceptance
Corp.
339,500 5.74%, 1/17/95............. 338,633,898
Greyhound Financial Corp.
7,150 6.20%, 1/13/95............. 7,135,223
5,000 6.32%, 2/7/95.............. 4,967,522
Greyhound Financial Corp.
6,000 6.33%, 2/7/95.............. 5,960,965
25,000 6.29%, 2/8/95.............. 24,834,014
Hanson Finance (U.K.), Plc.
31,150 6.28%, 3/1/95.............. 30,829,397
22,100 6.26%, 3/3/95.............. 21,865,580
42,000 6.27%, 3/7/95.............. 41,524,525
66,000 6.27%, 3/9/95.............. 65,229,835
Heller Financial Services,
Inc.
35,000 6.05%, 1/18/95............. 34,900,007
26,000 6.30%, 3/13/95............. 25,676,950
26,000 6.30%, 3/14/95............. 25,672,400
Household Finance Corp.
37,000 5.50%, 1/11/95............. 36,943,472
27,000 5.50%, 1/12/95............. 26,954,625
37,000 5.79%, 1/30/95............. 36,827,426
IBM Credit Corp.
115,000 5.76%, 1/23/95............. 114,595,200
International Lease Finance
Corp.
13,000 5.75%, 1/18/95............. 12,964,701
ITT Financial Corp.
41,000 5.82%, 1/17/95............. 40,893,947
Maguire/Thomas Partners
10,000 6.125%, 1/13/95............ 9,979,583
6,000 6.22%, 2/9/95.............. 5,959,570
Merrill Lynch & Co., Inc.
41,000 5.75%, 1/17/95............. 40,895,222
23,000 5.77%, 1/19/95............. 22,933,645
Morgan Stanley Group, Inc.
100,000 6.27%, 3/1/95.............. 98,972,415
NationsBank Corp.
25,000 5.40%, 1/23/95............. 24,917,500
Preferred Receivables
Funding Corp.
13,000 5.65%, 1/11/95............. 12,979,597
10,050 5.47%, 1/17/95............. 10,025,567
</TABLE>

See Notes to Financial Statements.
B-18
<PAGE>
PRUDENTIAL MONEYMART ASSETS
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--(cont'd.)
Sears Roebuck Acceptance
Corp.
$ 56,000 5.87%, 1/27/95............. $ 55,762,591
45,000 5.83%, 2/3/95.............. 44,759,513
17,000 6.05%, 2/6/95.............. 16,897,150
62,500 5.88%, 2/21/95............. 61,979,375
Smith Barney Shearson, Inc.
30,000 5.76%, 1/18/95............. 29,918,400
17,000 5.80%, 1/25/95............. 16,934,267
71,000 5.78%, 1/26/95............. 70,715,014
WCP Funding Inc.
5,000 6.125%, 2/6/95............. 4,969,375
Westpac Capital Corp.,
Delaware
26,000 5.50%, 1/17/95............. 25,936,444
36,000 6.28%, 3/14/95............. 35,547,840
Whirlpool Corp.
13,000 5.66%, 2/2/95.............. 12,934,596
Whirlpool Financial Corp.
6,000 5.60%, 2/6/95.............. 5,966,400
11,000 5.60%, 2/9/95.............. 10,933,267
30,000 5.61%, 2/10/95............. 29,813,000
WMX Technologies Inc.
13,000 5.20%, 5/12/95............. 12,754,011
--------------
Total Commercial Paper
(amortized cost
$3,395,524,459).......... 3,395,524,459
--------------
MEDIUM--TERM OBLIGATIONS--0.8%
Beneficial Corp.
9,500 9.50%, 5/25/95............. 9,641,889
Society National Bank of
Cleveland
40,000 3.55%, 1/20/95............. 39,996,648
--------------
Total Medium--Term
Obligations
(amortized cost
$49,638,537)............. 49,638,537
--------------
TIME DEPOSITS--EURODOLLAR--0.9%
Chemical Bank of New York
2,875 4.50%, 1/3/95.............. 2,875,000
Mitsubishi Bank, Ltd.
53,562 7.00%, 1/3/95.............. 53,562,000
--------------
Total Time
Deposits--Eurodollar
(amortized cost
$56,437,000)............. 56,437,000
--------------
VARIABLE RATE INSTRUMENTS+--17.6%
American Express Centurion
Bank
29,000 6.06%, 1/5/95.............. 28,998,287
51,000 6.125%, 1/19/95............ 50,996,655
13,000 5.94%, 1/30/95............. 12,999,038
Beneficial Corp.
73,000 6.14%, 1/19/95............. 72,972,737
Goldman, Sachs & Co.
345,000 5.375%, 1/27/95............ 345,000,000
Lehman Brothers Hldgs.,
Inc.
185,000 6.36%, 1/26/95............. 185,000,000
Merrill Lynch & Co., Inc.
83,000 6.07%, 1/3/95.............. 82,987,844
65,000 6.07%, 1/23/95............. 64,990,831
Money Market Auto Loan
Trust
91,450 6.34%, 1/17/95............. 91,450,000
Money Market Credit Card
Trust
55,362 6.22%, 1/10/95............. 55,360,568
</TABLE>

See Notes to Financial Statements.
B-19

<PAGE>
PRUDENTIAL MONEYMART ASSETS
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
VARIABLE RATE INSTRUMENTS(D)--(cont'd.)
Morgan Stanley Group, Inc.
$ 50,000 5.75%, 1/17/95............. $ 50,000,000
10,000 6.41%, 1/18/95............. 10,000,000
95,000 5.94%, 2/15/95............. 95,000,000
5,000 5.75%, 1/11/95............. 5,000,000
--------------
Total Variable Rate
Instruments
(amortized cost
$1,150,755,960).......... 1,150,755,960
--------------
Total Investments--100.3%
(amortized cost
$6,567,732,992*)......... 6,567,732,992
Liabilities in excess of
other
assets--(0.3%)........... (22,852,949)
--------------
Net Assets--100%........... $6,544,880,043
==============
</TABLE>
- ---------------
* The cost of securities for federal income tax
purposes is the same as for financial reporting
purposes.
(D) For purposes of amortized cost valuation, the
maturity date of these instruments is considered
to be the later of the next date on which the
security can be redeemed at par or the next date
on which the rate of interest is adjusted.

The industry classification of portfolio holdings shown as a
percentage of net assets as of December 31, 1994 was as follows:

<TABLE>
<S> <C>
Commercial Banks.......................... 33.3%
Personal Credit Institutions.............. 21.1
Security Brokers & Dealers................ 17.6
Short-Term Business Credit................ 12.8
Bank Holding Companies--Domestic.......... 3.4
Asset Backed Securities................... 2.9
Tobacco................................... 2.4
Pharmaceutical............................ 2.2
Finance Lessors........................... 1.8
Household Appliance....................... 0.9
Farm Machinery............................ 0.7
Financial Services........................ 0.6
Equipment Rental & Leasing................ 0.2
Refuse Systems/Sanitary................... 0.2
Miscellaneous Electrical Equipment........ 0.2
------
100.3
Liabilities in excess of other assets..... (0.3)
------
100.0%
======
</TABLE>

See Notes to Financial Statements.

B-20
<PAGE>
PRUDENTIAL MONEYMART ASSETS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
December 31,
Assets 1994
--------------
<S> <C>
Investments, at amortized cost which approximates value................................. $6,567,732,992
Receivable for Fund shares sold......................................................... 102,081,759
Interest receivable..................................................................... 35,815,018
Other assets............................................................................ 159,811
--------------
6,705,789,580
--------------
Liabilities
Bank overdraft.......................................................................... 62,702
Payable for Fund shares reacquired...................................................... 151,790,175
Accrued expenses........................................................................ 4,321,839
Dividends payable....................................................................... 2,451,391
Due to Manager.......................................................................... 1,698,429
Due to Distributor...................................................................... 389,293
Deferred director's fees................................................................ 195,708
--------------
160,909,537
--------------
Net Assets.............................................................................. $6,544,880,043
==============
Net assets were comprised of:
Common stock, at par ($.10 par value;
15,000,000,000 shares authorized for issuance)...................................... $ 654,488,004
Paid-in capital in excess of par...................................................... 5,890,392,039
--------------
Net assets at December 31, 1994......................................................... $6,544,880,043
==============
Net asset value, offering price and redemption price per share
($6,544,880,043 / 6,544,880,043 shares of common stock issued and outstanding)........ $1.00
==============
</TABLE>

See Notes to Financial Statements.

B-21

<PAGE>

PRUDENTIAL MONEYMART ASSETS
Statement of Operations

<TABLE>
<CAPTION>
Year Ended
December 31,
Net Investment Income 1994
------------
<S> <C>
Income
Interest............................ $308,274,967
------------
Expenses
Management fee...................... 21,320,747
Distribution fee.................... 8,839,226
Transfer agent's fees and
expenses............................ 16,946,000
Shareholder reports................. 1,300,000
Registration fees................... 695,000
Custodian's fees and expenses....... 510,000
Insurance expense................... 175,600
Directors' fees..................... 88,000
Audit fee........................... 36,000
Legal fees.......................... 23,000
Miscellaneous....................... 64,271
------------
Total expenses.................... 49,997,844
------------
Net investment income................. 258,277,123
Realized Gain on Investments
Net realized gain on investment
transactions........................ 147,440
------------
Net Increase in Net Assets
Resulting from Operations............. $258,424,563
============
</TABLE>

PRUDENTIAL MONEYMART ASSETS
Statement of Changes in Net Assets

<TABLE>
<CAPTION>
Year Ended December 31,
Increase (Decrease) ----------------------------------
in Net Assets 1994 1993
---------------- ---------------
<S> <C> <C>
Operations
Net investment
income.......... $ 258,277,123 $ 203,524,243
Net realized gain
on investment
transactions.... 147,440 2,572,145
---------------- ---------------
Net increase in
net assets
resulting from
operations...... 258,424,563 206,096,388
---------------- ---------------
Dividends and
distributions to
shareholders...... (258,424,563) (206,096,388)
---------------- ---------------
Fund share
transactions
(at $1 per share)
Proceeds from
shares
subscribed...... 26,869,523,481 33,414,007,948
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions... 245,955,917 196,483,621
Cost of shares
reacquired...... (27,889,232,548) (32,995,139,159)
---------------- ---------------
Net increase
(decrease) in
net assets from
Fund share
transactions.... (773,753,150) 615,352,410
---------------- ---------------
Total increase
(decrease)...... (773,753,150) 615,352,410
Net Assets
Beginning of year... 7,318,633,193 6,703,280,783
---------------- ---------------
End of year......... $ 6,544,880,043 $ 7,318,633,193
================ ===============
</TABLE>

See Notes to Financial Statements.

B-22

<PAGE>

PRUDENTIAL MONEYMART ASSETS
Notes to Financial Statements

Prudential-Bache MoneyMart Assets Inc., doing business as Prudential
MoneyMart Assets (the "Fund"), is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Fund
invests primarily in a portfolio of money market instruments maturing in
thirteen months or less whose ratings are within the two highest rating
categories by a nationally recognized statistical rating organization or, if not
rated, are of comparable quality. The ability of the issuers of the securities
held by the Fund to meet their obligations may be affected by economic
developments in a specific industry or region.

Note 1. Accounting The following is a summary of significant
Policies accounting policies followed by the Fund in the
preparation of its financial statements.

SECURITIES VALUATIONS: Portfolio securities are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of the difference between the principal amount due at
maturity and cost.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis.

FEDERAL INCOME TAXES: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income to its shareholders.
Therefore, no federal income tax provision is required.

DIVIDENDS AND DISTRIBUTIONS: All of the Fund's net investment income and net
realized gains or losses, if any, are declared as dividends daily to the
shareholders of record at the time of such declaration. Net investment income of
the Fund consists of interest accrued and discount earned less estimated
expenses applicable to the dividend period. Payment of dividends is made
monthly.

Note 2. Management The Fund has a management agreement with
and Distribution Prudential Mutual Fund Management, Inc.
Agreements ("PMF"). Pursuant to this agreement, PMF has
responsibility for all investment advisory
services and supervises the subadviser's performance of such services. PMF has
entered into a subadvisory agreement with The Prudential Investment Corporation
("PIC"); PIC furnishes investment advisory services in connection with the
management of the Fund. PMF pays for the cost of the subadviser's services, the
compensation of officers of the Fund, occupancy and certain clerical and
bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

The management fee paid PMF is computed daily and payable monthly, at an
annual rate of .50 of 1% of the Fund's average monthly net assets up to $50
million and .30 of 1% of the Fund's average monthly net assets in excess of $50
million.

The Fund has a distribution agreement with Prudential Mutual Fund
Distributors, Inc. ("PMFD"). To reimburse PMFD for its expenses incurred
pursuant to a plan of distribution, the Fund pays PMFD a reimbursement, accrued
daily and payable monthly at an annual rate of .125 of 1% of the Fund's average
daily net assets. PMFD pays various broker-dealers, including Prudential
Securities Incorporated ("PSI") and Pruco Securities Corporation, affiliated
broker-dealers, for account servicing fees and other expenses incurred by such
broker-dealers.

PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.

Note 3. Other Prudential Mutual Fund Services, Inc. ("PMFS"), a
Transactions wholly-owned subsidiary of PMF, serves as the
with Affiliates Fund's transfer agent. During the year ended
December 31, 1994, the Fund incurred fees of
approximately $15,538,800 for the services of PMFS. As of December 31, 1994,
approximately $2,661,400 of such fees were due to PMFS. Transfer agent fees
and expenses in the Statement of Operations include certain out-of-pocket
expenses paid to non-affiliates.

B-23
<PAGE>

PRUDENTIAL MONEYMART ASSETS
Financial Highlights
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1994 1993 1992 1991 1990
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year.................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net realized gains........ .037 .027 .035 .058 .077
Dividends and distributions to shareholders......... (.037) (.027) (.035) (.058) (.077)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year........................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== ==========
TOTAL RETURN #:...................................... 3.72% 2.70% 3.59% 5.95% 8.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)....................... $6,544,880 $7,318,633 $6,703,281 $7,138,159 $7,411,932
Average net assets (000)............................ $7,071,381 $7,742,989 $7,116,739 $7,763,251 $8,262,329
Ratios to average net assets:
Expenses, including distribution fee.............. .71% .71% .66% .68% .73%
Expenses, excluding distribution fee.............. .58% .58% .54% .56% .60%
Net investment income............................. 3.65% 2.63% 3.43% 5.72% 7.62%

<FN>
- ---------------
# Total return is calculated assuming a purchase of shares on the first day and
a sale on the last day of each year reported and includes reinvestment of
dividends and distributions.
</FN>
</TABLE>
See Notes to Financial Statements.

B-24
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Shareholders and Board of Directors
Prudential MoneyMart Assets

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Prudential MoneyMart Assets, as of December 31,
1994, the related statements of operations for the year then ended and of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
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, 1994 by correspondence with the custodian. 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 Prudential MoneyMart
Assets as of December 31, 1994, 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

New York, New York
February 1, 1995

B-25

<PAGE>

APPENDIX A

DESCRIPTION OF RATINGS

Bond Ratings

Moody's Investors Service--Bonds which are rated Aaa are judged to be of
the best quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues. Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than Aaa securities. Bonds
which are rated A possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future. Moody's
applies numerical modifiers "1", "2" and "3" in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier "1" indicates that the company ranks in the higher end of its generic
rating category; the modifier "2" indicates a mid-range ranking; and the
modifier "3" indicates that the company ranks in the lower end of its generic
rating category.

Standard & Poor's Ratings Group--Debt rated AAA has the highest rating
assigned by Standard & Poor's. Capacity to pay interest and repay principal is
extremely strong. Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in small degree.
Debt rated A has a strong capacity to pay interest and repay principal although
it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

Duff and Phelps Credit Rating Co.--The following summarizes the ratings
used by Duff & Phelps for long-term debt:

"AAA": Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.

"AA+", "AA" or "AA-": High credit quality. Protection factors are
strong. Risk is modest but may vary slightly from time to time because of
economic conditions.

"A+", "A" or "A-": Protection factors are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.

Commercial Paper Ratings

Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations which have an original maturity not
exceeding one year. Issuers rated "Prime-1" or "P-1"(or supporting
institutions) have a superior ability for repayment of senior short-term debt
obligations. Issuers rated "Prime-2" or "P-2" (or supporting institutions)
have a strong ability for repayment of senior short-term debt obligations.
Issuers rated "Prime-3" or "P-3" (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations.

An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market. The
designation A-1 indicates that the degree of safety regarding timely payment is
strong. A "+" designation is applied to those issues rated A-1 which possess
extremely strong safety characteristics. Capacity for timely payment on issues
with the designation A-2 is satisfactory. However, the relative degree of safety
is not as high as for issues designated A-1. Issues carrying the designation A-3
have adequate capacity for timely payment. They are however, somewhat more
vulnerable to the adverse effects of changes in circumstances than obligations
carrying the higher designations.

The following summarizes the ratings used by Duff & Phelps for short-term
debt, which apply to all obligations with maturities of under one year,
including commercial paper.

Duff 1+: Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative sources of
funds, is outstanding and safety is just below risk-free U.S. Treasury
short-term obligations.

Duff 1: Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk factors are
minor.

Duff 1-: High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.

A-1

<PAGE>

Duff 2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.

Duff 3: Satisfactory liquidity and other protection factors qualify issue
as to investment grade. Risk factors are larger and subject to more variation.
Nevertheless, timely payments is expected.

A-2

<PAGE>

Prudential Mutual Funds
Supplement dated September 29, 1995

The following information supplements the Statement of Additional Information of
each of the Funds listed below.

MANAGER

Prudential Mutual Fund Management, Inc. (PMF or the Manager), the Manager
of the Fund, is a subsidiary of Prudential Securities Incorporated (PSI) and The
Prudential Insurance Company of America (Prudential). PMF has three wholly-owned
subsidiaries: Prudential Mutual Fund Distributors, Inc., Prudential Mutual Fund
Services, Inc. (PMFS or the Transfer Agent) and Prudential Mutual Fund
Investment Management, Inc. PMFS serves as the transfer agent for the Prudential
Mutual Funds and, in addition, provides customer service, record keeping and
management and administration services to qualified plans. The Prudential
Investment Corporation (PIC) serves as the investment adviser for each of the
Funds listed below, except for The BlackRock Government Income Trust, Global
Utility Fund, Inc. and Nicholas-Applegate Fund, Inc. See ``How the Fund is
Managed - Manager'' in the Prospectus of each Fund. The unit of PIC which
provides investment advisory services to the Funds is known as Prudential Mutual
Fund Investment Management.

Prudential is one of the largest diversified financial services
institutions in the world and, based on total assets, the largest insurance
company in North America as of December 31, 1994. Its primary business is to
offer a full range of products and services in three areas: insurance,
investments and home ownership for individuals and families; health-care
management and other benefit programs for employees of companies and members of
groups; and asset management for institutional clients and their associates.
Prudential (together with its subsidiaries) employs nearly 100,000 persons
worldwide, and maintains a sales force of approximately 19,000 agents, 3,400
insurance brokers and 6,000 financial advisers. It insures or provides other
financial services to more than 50 million people worldwide --to more than one
of every five people in the United States. Prudential is a major issuer of
annuities, including variable annuities. Prudential seeks to develop innovative
products and services to meet consumer needs in each of its business areas. As
of December 31, 1994, Prudential through its subsidiaries provided automobile
insurance for more than 1.8 million cars and insured more than 1.5 million
homes. For the year ended December 31, 1994, The Prudential Bank, a subsidiary
of Prudential, served 940,000 customers in 50 states providing credit card
services and loans totaling more than $1.2 billion. Assets held by PSI for its
clients totaled approximately $150 billion at December 31, 1994. During 1994,
over 28,000 new customer accounts were opened each month at PSI. The Prudential
Real Estate Affiliates, the fourth largest real estate brokerage network in the
United States, has more than 34,000 brokers and agents and more than 1,100
offices in the United States.

Based on data for the year ended December 31, 1994 for the Prudential
Mutual Funds, on an average day, there are approximately $80 million in common
stock transactions, over $100 million in bond transactions and over $4.1 billion
in money market transactions. In 1994, the Prudential Mutual Funds effected more
than 57,000 trades in money market securities and held on average $21 billion of
money market securities. Based on complex-wide data for the year ended December
31, 1994, on an average day, 7,168 shareholders telephoned PMFS, the Transfer
Agent of the Prudential Mutual Funds, on the Prudential Mutual Funds' toll-free
number. On an annual basis, that represents approximately 1.8 million telephone
calls and approximately 1.1 million fund transactions.

(over)

<PAGE>

Listed below are the names of the Prudential Mutual Funds and the dates of
the Statements of Additional Information to which this supplement relates.

Name of Fund Statement Date

The BlackRock Government Income Trust August 31, 1995
Command Government Fund August 31, 1995
Command Money Fund August 31, 1995
Command Tax-Free Fund August 31, 1995
Global Utility Fund, Inc. February 1, 1995
Nicholas-Applegate Fund, Inc. March 6, 1995
Nicholas-Applegate Growth Equity Fund
Prudential California Municipal Fund
California Money Market Series December 30, 1994
Prudential Government Securities Trust
Money Market Series August 1, 1995
U.S. Treasury Money Market Series August 1, 1995
Prudential Institutional Liquidity Portfolio, Inc. May 30, 1995
Institutional Money Market Series
Prudential MoneyMart Assets February 28, 1995
Prudential Municipal Series Fund
Connecticut Money Market Series December 30, 1994
Massachusetts Money Market Series December 30, 1994
New Jersey Money Market Series December 30, 1994
New York Money Market Series December 30, 1994
Prudential Special Money Market Fund August 29, 1995
Money Market Series
Prudential Tax-Free Money Fund, Inc. August 1, 1995

MF950C-13

<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

(1) Financial Statements included in the Prospectus constituting Part A of
this Post-Effective Amendment to the Registration Statement:

Financial Highlights.

(2) Financial Statements included in the Statement of Additional
Information constituting Part B of this Post-Effective Amendment to
the Registration Statement:

Portfolio of Investments as of December 31, 1994 and as of June 30,
1995 (unaudited).

Statement of Assets and Liabilities as of December 31, 1994 and as
of June 30, 1995 (unaudited).

Statement of Operations for the Year Ended December 31, 1994 and for
the six months ended June 30, 1995 (unaudited).

Statement of Changes in Net Assets for the Years Ended December 31,
1994 and 1993 and for the six months ended June 30, 1995 (unaudited).

Notes to Financial Statements

Financial Highlights

Independent Auditors' Report

(b) Exhibits:

1. (a) Articles of Amendment, incorporated by reference to Exhibit No. 1
to Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A filed on May 1, 1989 (File No. 2-55301). Amendment to
Articles of Incorporation, incorporated by reference to Exhibit No. 1
to Post-Effective Amendment No. 20 to the Registration Statement on
Form N-1A (File No. 2-55301). Articles of Incorporation, incorporated
by reference to Exhibit No. 1 to the Registration Statement and
Post-Effective Amendment No. 1 to the Registration Statement (File No.
2-55301), as amended on Form N-1Q filed on July 29, 1982 (File No.
811-2619).

(b) Articles Supplementary, incorporated by reference to Exhibit No.
1(b) to Post-Effective Amendment No. 24 to the Registration Statement
on Form N-1A filed on March 2, 1990 (File No. 2-55301).

2. By-Laws, incorporated by reference to Exhibit No. 2 to Post-Effective
Amendment No. 29 to the Registration Statement on Form N-1A filed via
EDGAR on February 24, 1995 (File No. 2-55301).

4. (a) Form of stock certificate, incorporated by reference to Exhibit
No. 4 to Post-Effective Amendment No. 22 to the Registration Statement
on Form N-1A filed on February 29, 1988 (File No. 2-55301).

(b) Instruments defining rights of shareholders incorporated by
reference to Exhibits 1(a), 1(b) and 2 to Post-Effective Amendment No.
28 to this Registration Statement on Form N-1A filed on February 17,
1993 (File No. 2-55301).

5. (a) Management Agreement between the Registrant and Prudential Mutual
Fund Management, Inc., incorporated by reference to Exhibit No. 5(a)
to Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A filed on May 1, 1989 (File No. 2-55301).

(b) Subadvisory Agreement between Prudential Mutual Fund Management,
Inc. and The Prudential Investment Corporation, incorporated by
reference to Exhibit No. 5(b) to Post-Effective Amendment No. 23 to
the Registration Statement on Form N-1A filed on May 1, 1989 (File No.
2-55301).

6. (a) Distribution Agreement between the Registrant and Prudential
Mutual Fund Distributors, Inc., incorporated by reference to Exhibit
No. 6 to Post-Effective Amendment No. 23 to the Registration Statement
on Form N-1A filed on May 1, 1989 (File No. 2-55301).

(b) Amended and Restated Distribution Agreement between the Registrant
and Prudential Mutual Fund Distributors, Inc., incorporated by
reference to Exhibit 6(b) to Post-Effective Amendment No. 28 to the
Registration Statement on Form N-1A filed on February 17, 1994 (File
No. 2-55301).

C-1

<PAGE>

8. Custodian Contract with State Street Bank and Trust Company,
incorporated by reference to Exhibit No. 8 to Post-Effective Amendment
No. 25 to the Registration Statement on Form N-1A filed on April 12,
1991 (File No. 2-55301).

9. Transfer Agency and Service Agreement, incorporated by reference to
Exhibit No. 9(a) to Post-Effective Amendment No. 22 to the
Registration Statement on Form N-1A filed on February 29, 1988 (File
No. 2-55301).

10. (a) Opinion of Gardner, Carton & Douglas, incorporated by reference to
Exhibit No. 3(b) to Post-Effective Amendment No. 9 to the
Registration Statement on Form N-1A (File No. 2-55301).

(b) Opinion of Gardner, Carton & Douglas, incorporated by reference to
Exhibit No. 10(b) to Post-Effective Amendment No. 27 to the
Registration Statement on Form N-1A filed on February 25, 1993
(File No. 2-55301).

(c) Opinion on Gardner, Carton & Douglas, incorporated by reference to
Post-Effective Amendment No. 29 to the Registration Statement on Form
N-1A filed via EDGAR on February 24, 1995 (File No. 2-55301).

11. Consent of Independent Accountants.*

15. (a) Plan of Distribution, incorporated by reference to Exhibit No. 15
to Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A filed on May 1, 1989 (File No. 2-55301).

(b) Distribution and Service Plan between the Registrant and
Prudential Mutual Fund Distributors, Inc., incorporated by reference
to Exhibit 15(b) to Post-Effective Amendment No. 28 on Form N-1A filed
on February 17, 1994 (File No. 2-55301).

17. Financial Data Schedule.*

18. Rule 18f-3 Plan.*

- ------------
*Filed herewith.

Item 25. Persons Controlled by or under Common Control with Registrant

None.

Item 26. Number of Holders of Securities

As of October 13, 1995, there were 1,113,941 record holders of common
stock, $.10 par value per share.

Item 27. Indemnification.

As permitted by Sections 17(h) and 17(i) of the Investment Company Act of
1940 ("Investment Company Act") and pursuant to Article X of the Registrant's
By-Laws (Exhibit 2 to the Registration Statement) and Section 2-418 of the
Maryland General Corporation Law, officers, directors, employees and agents of
the Registrant may be indemnified against certain liabilities in connection with
the Registrant except liabilities arising from misfeasance, bad faith, gross
negligence or reckless disregard in the conduct of their respective duties. As
permitted by Section 17(i) of the Investment Company Act, pursuant to Section 9
of the Distribution Agreement (Exhibit 6 to the Registration Statement),
Prudential Mutual Fund Distributors, Inc., as Distributor of the Fund, may be
indemnified against certain liabilities it may incur. Such Article X of the
By-Laws and Section 9 of the Distribution Agreement are hereby incorporated by
reference in their entirety.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant and the principal underwriter pursuant to
the foregoing provisions or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission (the "Commission") such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
and the principal underwriter in connection with the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such director,
officer or controlling person or the principal underwriter in connection with
the shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

Section 8 of the Management Agreement (Exhibit 5(a) to the Registration
Statement) limits the liability of Prudential Mutual Fund Management, Inc.
("PMF") to losses resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3) of the
Investment Company Act) or losses resulting from willful misfeasance, bad faith
or gross negligence in the performance of its duties or from reckless disregard
by PMF of its obligations and duties under the Management Agreement. Section 4
of the Subad-

C-2

<PAGE>

visory Agreement (Exhibit 5(b) to the Registration Statement) limits the
liability of The Prudential Investment Corporation ("PIC") to losses resulting
from willful misfeasance, bad faith or gross negligence in the performance of
its duties, or from reckless disregard by PIC of its obligations and duties
under the Subadvisory Agreement.

The Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws in a manner consistent with Release No. 11330 of the
Commission under the Investment Company Act so long as the interpretation of
Sections 17(h) and 17(i) of such Act remain in effect and are consistently
applied.

The Registrant maintains an insurance policy insuring its officers and
directors against certain liabilities and certain costs of defending claims
against such officers and directors, to the extent such officers and directors
are not found to have committed conduct constituting conflict of interest,
intentional non-compliance with statutes or regulations or dishonesty,
fraudulent or criminal acts or omissions. The insurance policy also insures the
Registrant against the costs of indemnification payments to officers and
directors under certain circumstances.

Item 28. Business and other Connections of Investment Adviser

(a) Prudential Mutual Fund Management, Inc.

See "Manager" in the Statement of Additional Information.

The business and other connections of PMF directors and officers are listed
in Schedules A and D of Form ADV of PMF as currently on file with the
Commission, the text of which is hereby incorporated by reference (File No.
801-31104, filed on March 30, 1995).

The business and other connections of the directors and officers of PMF are
set forth below. Except as otherwise indicated, the address of each person is
One Seaport Plaza, New York, NY 10292.

Name and Address Position with PMF Principal Occupations
- ---------------- ----------------- ---------------------
<S> <C> <C>

Brendan D. Boyle Executive Vice President, Executive Vice President, Director of Marketing and
Director of Marketing and Director, PMF; Senior Vice President, Prudential Securities
Director Incorporated (Prudential Securities); Chairman and Director
of Prudential Mutual Fund Distributors, Inc. (PMFD)

Stephen P. Fisher Senior Vice President Senior Vice President, PMF; Senior Vice President,
Prudential Securities; Vice President, PMFD

Frank W. Giordano Executive Vice President, Executive Vice President, General Counsel, Secretary and
General Counsel, Director, PMF and PMFD; Senior Vice President, Prudential
Secretary and Director Securities; Director, Prudential Mutual Fund Services, Inc.
(PMFS)

Robert F. Gunia Executive Vice President, Executive Vice President, Chief Financial and Administrative
Chief Financial and Officer, Treasurer and Director, PMF; Senior Vice President,
Administrative Officer, Prudential Securities; Executive Vice President, Chief
Treasurer and Director Financial Officer,Treasurer and Director, PMFD; Director,
PMFS

Theresa A. Hamacher Director Director, PMF; Vice President, The Prudential Insurance
Company of America (Prudential); Vice President, The
Prudential Investment Corporation (PIC)

Timothy J. O'Brien Director President, Chief Executive Officer, Chief Operating Officer
and Director, PMFD; Chief Executive Officer and Director,
PMFS; Director, PMF

Richard A. Redeker President, Chief Executive President, Chief Executive Officer and Director, PMF;
Officer and Director Executive Vice President, Director and Member of Operating
Committee, Prudential Securities; Director, Prudential
Securities Group, Inc. (PSG); Executive Vice President, PIC;
Director, PMFD; Director, PMFS

S. Jane Rose Senior Vice President, Senior Vice President, Senior Counsel and Assistant
Senior Counsel and Assistant Secretary, PMF; Senior Vice President and Senior Counsel,
Secretary Prudential Securities
</TABLE>

C-3

<PAGE>

(b) The Prudential Investment Corporation (PIC)

See "How the Fund is Managed--Manager" in the Prospectus constituting Part
A of this Registration Statement and "Manager" in the Statement of Additional
Information constituting Part B of this Registration Statement.

The business and other connections of PIC's directors and executive
officers are as set forth below. Except as otherwise indicated, the address of
each person is Prudential Plaza, Newark, NJ 07102.

Name and Address Position with PIC Principal Occupations
- ---------------- ----------------- ---------------------
<S> <C> <C>

William M. Bethke Senior Vice President Senior Vice President, Prudential; Senior Vice President, PIC
Two Gateway Center
Newark, NJ 07102

John D. Brookmeyer, Jr. Senior Vice President and Senior Vice President, Prudential; Senior Vice President and
51 JFK Parkway Director Director, PIC
Short Hills, NJ 07078

Barry M. Gillman Director Director, PIC

Theresa A. Hamacher Vice President Vice President, Prudential; Vice President, PIC; Director,
PMF

Harry E. Knapp, Jr. President, Chairman of the President, Chairman of the Board, Director and Chief
Board, Director and Chief Executive Officer, PIC; Vice President, Prudential
Executive Officer

William P. Link Senior Vice President Executive Vice President, Prudential;
Four Gateway Center Senior Vice President, PIC
Newark, NJ 07102

Richard A. Redeker Executive Vice President President, Chief Executive Officer and Director, PMF;
Executive Vice President, Director and Member of Operating
Committee, Prudential Securities; Director, PSG; Executive
Vice President, PIC; Director, PMFD; Director, PMFS

Eric A. Simonson Vice President and Director Vice President and Director, PIC; Executive Vice President,
Prudential

Claude J. Zinngrabe, Jr. Executive Vice President Vice President, Prudential; Executive Vice President, PIC

</TABLE>

Item 29. Principal Underwriters

(i) Prudential Mutual Fund Distributors, Inc.

Prudential Mutual Fund Distributors, Inc. is distributor for Command
Government Fund, Command Money Fund, Command Tax-Free Fund, Prudential
California Municipal Fund (California Money Market Series), Prudential
Government Securities Trust (Money Market Series and U.S. Treasury Money Market
Series), Prudential Institutional Liquidity Portfolio, Inc., Prudential-Bache
MoneyMart Assets Inc., Prudential Municipal Series Fund (Connecticut Money
Market Series, Massachusetts Money Market Series, New York Money Market Series
and New Jersey Money Market Series), Prudential-Bache Special Money Market Fund,
Inc. (d/b/a Prudential Special Money Market Fund), Prudential-Bache Tax-Free
Money Fund, Inc. (d/b/a Prudential Tax-Free Money Fund), and for Class A shares
of Prudential Adjustable Rate Securities Fund, Inc., Prudential Allocation Fund,
Prudential California Municipal Fund (California Income Series and California
Series), Prudential Diversified Bond Fund, Inc., Prudential Equity Fund, Inc.,
Prudential Equity Income Fund, Prudential Europe Growth Fund, Inc., Prudential
Global Fund, Inc., Prudential Global Genesis Fund, Inc., Prudential Global
Natural Resources Fund, Inc., Prudential GNMA Fund, Inc., Prudential Government
Income Fund, Inc., Prudential Growth Opportunity Fund, Inc., Prudential High
Yield Fund, Inc., Prudential Intermediate Global Income Fund, Inc., Prudential
Mortgage Income Fund, Inc., Prudential Multi-Sector Fund, Inc., Prudential
Municipal Bond Fund, Prudential Municipal Series Fund (Arizona Series, Georgia
Series, Hawaii Income Series, Maryland Series, Massachusetts Series, Michigan
Series, Minnesota Series, New Jersey Series, North Carolina Series, Ohio Series
and Pennsylvania Series), Prudential National Municipals Fund, Inc., Prudential
Pacific Growth Fund, Inc., Prudential Global Limited Maturity Fund, Inc.,
Prudential Structured Maturity Fund, Inc., Prudential U.S. Government Fund and
Prudential Utility Fund, Inc., Global Utility Fund, Inc., Nicholas-Applegate
Fund, Inc. (Nicholas-Applegate Growth Equity Fund) and The BlackRock Government
Income Trust.

C-4

<PAGE>

(b) Prudential Mutual Fund Distributors, Inc.

Positions and Positions and
Offices with Offices with
Name(1) Underwriter Registrant
- ------- ------------- -------------
<S> <C> <C>
Joanne Accurso-Soto ...... Vice President None

Dennis N. Annarumma....... Vice President, Assistant Treasurer and Assistant Comptroller None

Phyllis J. Berman ........ Vice President None
Brendan D. Boyle ......... Chairman and Director None
Stephen P. Fisher ........ Vice President None
Frank W. Giordano ........ Executive Vice President, General Counsel, Secretary and Director None

Robert F. Gunia .......... Executive Vice President, Chief Financial Officer, Treasurer and Director Vice President

Timothy J. O'Brien ....... President, Chief Executive Officer, Chief Operating Officer and Director None

Richard A. Redeker ....... Director Director and
President

Andrew J. Varley ......... Vice President None

Anita L. Whelan .......... Vice President and Assistant Secretary None

</TABLE>

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

(1) The address of each person named is One Seaport Plaza, New York, NY 10292.

Item 30. Location of Accounts and Records

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules thereunder are maintained at the
offices of State Street Bank and Trust Company, One Heritage Drive, North
Quincy, Massachusetts 02171, The Prudential Investment Corporation, Prudential
Plaza, 745 Broad Street, Newark, New Jersey 07102, the Registrant, One Seaport
Plaza, New York, New York 10292, and Prudential Mutual Fund Services, Inc.,
Raritan Plaza One, Edison, New Jersey 08837. Documents required by Rules
31a-1(b)(5), (6), (7), (9), (10) and (11) and 31a-1(f) will be kept at Two
Gateway Center, documents required by Rules 31a-1(b)(4) and (11) and 31a-1(d) at
One Seaport Plaza and the remaining accounts, books and other documents required
by such other pertinent provisions of Section 31(a) and the Rules promulgated
thereunder will be kept by State Street Bank and Trust Company and Prudential
Mutual Fund Services, Inc.

Item 31. Management Services

Other than as set forth under the captions "How the Fund is
Managed--Manager" and "How the Fund is Managed--Distributor" in the Prospectus
and the captions "Manager" and "Distributor" in the Statement of Additional
Information, constituting Parts A and B, respectively, of this Registration
Statement, Registrant is not a party to any management-related service contract.

Item 32. Undertakings

Not applicable.

C-5

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
and State of New York, on the 26th day of October, 1995.

PRUDENTIAL-BACHE MONEYMART ASSETS INC.

/s/ RICHARD A. REDEKER
-------------------------------------
(Richard A. Redeker, President)

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ RICHARD A. REDEKER President and Director October 26, 1995
- -------------------------------
Richard A. Redeker

/s/ WILLIAM S. FIELD Director October 26, 1995
- -------------------------------
William S. Field

/s/ DELAYNE D. GOLD Director October 26, 1995
- -------------------------------
Delayne D. Gold

/s/ HARRY A. JACOBS, JR. Director October 26, 1995
- -------------------------------
Harry A. Jacobs, Jr.

/s/ THOMAS A. OWENS, JR. Director October 26, 1995
- -------------------------------
Thomas A. Owens, Jr.

/s/ SIDNEY M. SPIELVOGEL Director October 26, 1995
- -------------------------------
Sidney M. Spielvogel

/s/ NANCY HAYS TEETERS Director October 26, 1995
- -------------------------------
Nancy Hays Teeters

/s/ ROBERT H. WELLINGTON Director October 26, 1995
- -------------------------------
Robert H. Wellington

/s/ GRACE TORRES Principal Financial and October 26, 1995
- ------------------------------- Accounting Officer
Grace Torres

<PAGE>

EXHIBIT INDEX

1. (a) Articles of Amendment, incorporated by reference to Exhibit 1 to
Post-Effective Amendment No. 23 to the Registration Statement on Form N-1A
filed on May 1, 1989 (File No. 2-55301). Amendment to Articles of
Incorporation, incorporated by reference to Exhibit No. 1 to Post-Effective
Amendment No. 20 to the Registration Statement on Form N1-A (File No.
2-55301). Articles of Incorporation, incorporated by reference to Exhibit
No. 1 to the Registration Statement and Post-Effective Amendment No. 1 to
the Registration Statement (File No. 2-55301), as amended in Form N-1Q
filed on July 29, 1982 (File No. 811-2619).

(b) Articles Supplementary, incorporated by reference to Exhibit No. 1(b)
to Post-Effective Amendment No. 24 to the Registration Statement on Form
N-1A filed on March 2, 1990 (File No. 2-55301).

2. By-Laws, incorporated by reference to Exhibit No. 2 to Post-Effective
Amendment No. 29 to the Registration Statement on Form N-1A filed via EDGAR
on February 24, 1995 (File No. 2-55301).

4. (a) Form of stock certificate, incorporated by reference to Exhibit No. 4
to Post-Effective Amendment No. 22 to the Registration Statement on Form
N-1A filed on February 28, 1988 (File No. 2-55301).

(b) Instruments defining rights of shareholders incorporated by reference
to Exhibits 1(a), 1(b) and 2 to Post-Effective Amendment No. 28 to this
Registration Statement on Form N-1A filed on February 17, 1993 (File No.
2-55301).

5. (a) Management Agreement between the Registrant and Prudential Mutual Fund
Management, Inc., incorporated by reference to Exhibit No. 5(a) to
Post-Effective Amendment No. 23 to the Registration Statement on Form N-1A
filed on May 1, 1989 (File No. 2-55301).

(b) Subadvisory Agreement between Prudential Mutual Fund Management, Inc.
and The Prudential Investment Corporation, incorporated by reference to
Exhibit No. 5(b) to Post-Effective Amendment No. 23 to the Registration
Statement on Form N-1A filed on May 1, 1989 (File No. 2-55301).

6. (a) Distribution Agreement between the Registrant and Prudential Mutual
Fund Distributors, Inc., incorporated by reference to Exhibit No. 6 to
Post-Effective Amendment No. 23 to the Registration Statement on Form
N-1A filed on May 1, 1989 (File No. 2-55301).

(b) Amended and Restated Distribution Agreement between the Registrant and
Prudential Mutual Fund Distributors, Inc., incorporated by reference to
Exhibit 6(b) to Post-Effective Amendment No. 28 to the Registration
Statement on Form N-1A filed on February 17, 1994 (File No. 2-55301).

8. Custodian Contract with State Street Bank and Trust Company, incorporated
by reference to Exhibit No. 8 to Post-Effective Amendment No. 25 to the
Registration Statement on Form N-1A filed on April 12, 1992 (File No.
2-55301).

9. Transfer Agency and Service Agreement, incorporated by reference to Exhibit
No. 9(a) to Post-Effective Amendment No. 22 to the Registration Statement
on Form N-1A filed on February 28, 1988 (File No. 2-55301).

10. (a) Opinion of Gardner, Carton & Douglas, incorporated by reference to
Exhibit No. [3(b)] to Post-Effective Amendment No. 9 to the Registration
Statement (File No. 2-55301).

(b) Opinion of Gardner, Carton & Douglas, incorporated by reference to
Exhibit 10(b) to Post-Effective Amendment No. 27 to the Registration
Statement filed on February 25, 1993 (File No. 2-55301).

(c) Opinion of Gardner, Carton & Douglas, incorporated by reference to
Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A
filed via EDGAR on February 24, 1995 (File No. 2-55301).

11. Consent of Independent Accountants.*

15. (a) Plan of Distribution, incorporated by reference to Exhibit No. 15 to
Post-Effective Amendment No. 23 to the Registration Statement on Form N-1A
(File No. 2-55301).

(b) Distribution and Service Plan between the Registrant and Prudential
Mutual Fund Services, Inc., incorporated by reference to Exhibit 15(b) to
Post-Effective Amendment No. 28 on Form N-1A filed on February 17, 1994
(File No. 2-55301).

17. Financial Data Schedule.*

18. Rule 18f-3 Plan.*

- ----------------
* Filed herewith.

PRUDENTIAL MONEY MART ASSETS

Form of

Distribution Agreement

(Class Z Shares)
----------------

Agreement made as of _______, 1995, between Prudential Money Mart Assets, a
Maryland Corporation/Massachusetts business trust (the Fund) and Prudential
Securities Incorporated, a Delaware Corporation (the Distributor).

WITNESSETH

WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the Investment Company Act), as a [diversified/non-diversified],
open-end, management investment company and it is in the interest of the Fund to
offer its Class Z shares for sale continuously;

WHEREAS, the Distributor is a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, and is engaged in the business of selling
shares of registered investment companies either directly or through other
broker-dealers; and

WHEREAS, the Fund and the Distributor wish to enter into an agreement with
each other, with respect to the continuous offering of the Fund's Class Z shares
from and after the date hereof in order to promote the growth of the Fund and
facilitate the distribution of its Class Z shares.

NOW, THEREFORE, the parties agree as follows:

Section 1. Appointment of the Distributor
------------------------------
The Fund hereby appoints the Distributor as the principal underwriter and
distributor of the Class Z shares of the Fund to sell Class Z shares to the
public on behalf of the Fund and the Distributor hereby accepts such appointment
and agrees to act hereunder. The Fund hereby agrees during the term of this
Agreement to sell Class Z shares of the Fund through the Distributor on the
terms and conditions set forth below.

Section 2. Exclusive Nature of Duties
--------------------------
The Distributor shall be the exclusive representative of the Fund to act as
principal underwriter and distributor of the Fund's Class Z shares, except that:

2.1 The exclusive rights granted to the Distributor to sell Class Z shares
of the Fund shall not apply to Class Z shares of the Fund issued in connection
with the merger or consolidation of any other investment company or personal
holding company with the Fund or the acquisition by purchase or otherwise of all
(or substantially all) of the assets or the outstanding shares of any such
company by the Fund.

<PAGE>

2.2 Such exclusive rights shall not apply to Class Z shares issued by the
Fund pursuant to reinvestment of dividends or capital gains distributions.

2.3 Such exclusive rights shall not apply to Class Z shares issued by the
Fund pursuant to the reinstatement privilege afforded redeeming shareholders.

2.4 Such exclusive rights shall not apply to purchases made through the
Fund's transfer and dividend disbursing agent in the manner set forth in the
currently effective Prospectus of the Fund. The term "Prospectus" shall mean the
Prospectus and Statement of Additional Information included as part of the
Fund's Registration Statement, as such Prospectus and Statement of Additional
Information may be amended or supplemented from time to time, and the term
"Registration Statement" shall mean the Registration Statement filed by the Fund
with the Securities and Exchange Commission and effective under the Securities
Act of 1933, as amended (the Securities Act), and the Investment Company Act, as
such Registration Statement is amended from time to time.

Section 3. Purchase of Class Z Shares from the Fund
----------------------------------------
3.1 The Distributor shall have the right to buy from the Fund on behalf of
investors the Class Z shares needed, but not more than the Class Z shares needed
(except for clerical errors in transmission) to fill unconditional orders for
Class Z shares placed with the Distributor by investors or registered and
qualified securities dealers and other financial institutions (selected
dealers).

3.2 The Class Z shares shall be sold by the Distributor on behalf of the
Fund and delivered by the Distributor or selected dealers, as described in
Section 6.4 hereof, to investors at the offering price as set forth in the
Prospectus.

3.3 The Fund shall have the right to suspend the sale of its Class Z shares
at times when redemption is suspended pursuant to the conditions in Section 4.3
hereof or at such other times as may be determined by the Board of
Directors/Trustees. The Fund shall also have the right to suspend the sale of
its Class Z shares if a banking moratorium shall have been declared by federal
or New York authorities.

3.4 The Fund, or any agent of the Fund designated in writing by the Fund,
shall be promptly advised of all purchase orders for Class Z shares received by
the Distributor. Any order may be rejected by the Fund; provided, however, that
the Fund will not arbitrarily or without reasonable cause refuse to accept or
confirm orders for the purchase of Class Z shares. The Fund (or its agent) will
confirm orders upon their receipt, will make appropriate book entries and upon
receipt by the Fund (or its

<PAGE>

agent) of payment therefor, will deliver deposit receipts for such Class Z
shares pursuant to the instructions of the Distributor. Payment shall be made to
the Fund in New York Clearing House funds or federal funds. The Distributor
agrees to cause such payment and such instructions to be delivered promptly to
the Fund (or its agent).

Section 4. Repurchase or Redemption of Class Z Shares by the Fund
------------------------------------------------------
4.1 Any of the outstanding Class Z shares may be tendered for redemption at
any time, and the Fund agrees to repurchase or redeem the Class Z shares so
tendered in accordance with its Articles of Incorporation/Declaration of Trust
as amended from time to time, and in accordance with the applicable provisions
of the Prospectus. The price to be paid to redeem or repurchase the Class Z
shares shall be equal to the net asset value determined as set forth in the
Prospectus. All payments by the Fund hereunder shall be made in the manner set
forth in Section 4.2 below.

4.2 The Fund shall pay the total amount of the redemption price as defined
in the above paragraph pursuant to the instructions of the Distributor on or
before the seventh day subsequent to its having received the notice of
redemption in proper form. The proceeds of any redemption of Class Z shares
shall be paid by the Fund to or for the account of the redeeming shareholder, in
each case in accordance with applicable provisions of the Prospectus.

4.3 Redemption of Class Z shares or payment may be suspended at times when
the New York Stock Exchange is closed for other than customary weekends and
holidays, when trading on said Exchange is restricted, when an emergency exists
as a result of which disposal by the Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Fund fairly
to determine the value of its net assets, or during any other period when the
Securities and Exchange Commission, by order, so permits.

Section 5. Duties of the Fund
------------------
5.1 Subject to the possible suspension of the sale of Class Z shares as
provided herein, the Fund agrees to sell its Class Z shares so long as it has
Class Z shares available.

5.2 The Fund shall furnish the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of Class Z shares, and this
shall include one certified copy, upon request by the Distributor, of all
financial statements examined for the Fund by independent public accountants.
The Fund shall make available to the Distributor such number of copies of its
Prospectus and annual and interim reports as the

3
<PAGE>

Distributor shall reasonably request.

5.3 The Fund shall take, from time to time, but subject to the necessary
approval of the Board of Directors/Trustees and the shareholders, all necessary
action to fix the number of authorized Class Z shares and such steps as may be
necessary to register the same under the Securities Act, to the end that there
will be available for sale such number of Class Z shares as the Distributor
reasonably may expect to sell. The Fund agrees to file from time to time such
amendments, reports and other documents as may be necessary in order that there
will be no untrue statement of a material fact in the Registration Statement, or
necessary in order that there will be no omission to state a material fact in
the Registration Statement which omission would make the statements therein
misleading.

5.4 The Fund shall use its best efforts to qualify and maintain the
qualification of any appropriate number of its Class Z shares for sales under
the securities laws of such states as the Distributor and the Fund may approve;
provided that the Fund shall not be required to amend its [Articles of
Incorporation/Declaration of Trust] or By-Laws to comply with the laws of any
state, to maintain an office in any state, to change the terms of the offering
of its Class Z shares in any state from the terms set forth in its Registration
Statement, to qualify as a foreign corporation in any state or to consent to
service of process in any state other than with respect to claims arising out of
the offering of its Class Z shares. Any such qualification may be withheld,
terminated or withdrawn by the Fund at any time in its discretion. As provided
in Section 7.1 hereof, the expense of qualification and maintenance of
qualification shall be borne by the Fund. The Distributor shall furnish such
information and other material relating to its affairs and activities as may be
required by the Fund in connection with such qualifications.

Section 6. Duties of the Distributor
-------------------------
6.1 The Distributor shall devote reasonable time and effort to effect sales
of Class Z shares of the Fund, but shall not be obligated to sell any specific
number of Class Z shares. Sales of the Class Z shares shall be on the terms
described in the Prospectus. The Distributor may enter into like arrangements
with other investment companies. The Distributor shall compensate the selected
dealers as set forth in the Prospectus.

6.2 In selling the Class Z shares, the Distributor shall use its best
efforts in all respects duly to conform with the requirements of all federal and
state laws relating to the sale of such securities. Neither the Distributor nor
any selected dealer nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in the
Registration Statement or Prospectus and any sales

<PAGE>

literature approved by appropriate officers of the Fund.

6.3 The Distributor shall adopt and follow procedures for the confirmation
of sales to investors and selected dealers, the collection of amounts payable by
investors and selected dealers on such sales and the cancellation of unsettled
transactions, as may be necessary to comply with the requirements of the
National Association of Securities Dealers, Inc. (NASD).

6.4 The Distributor shall have the right to enter into selected dealer
agreements with registered and qualified securities dealers and other financial
institutions of its choice for the sale of Class Z shares, provided that the
Fund shall approve the forms of such agreements. Within the United States, the
Distributor shall offer and sell Class Z shares only to such selected dealers as
are members in good standing of the NASD. Class Z shares sold to selected
dealers shall be for resale by such dealers only at the offering price
determined as set forth in the Prospectus.

Section 7. Allocation of Expenses
----------------------
7.1 The Fund shall bear all costs and expenses of the continuous offering
of its Class Z shares, including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of any required
Registration Statements and/or Prospectuses under the Investment Company Act or
the Securities Act, and preparing and mailing annual and periodic reports and
proxy materials to shareholders (including but not limited to the expense of
setting in type any such Registration Statements, Prospectuses, annual or
periodic reports or proxy materials). The Fund shall also bear the cost of and
expense of qualification of the Class Z shares for sale, and, if necessary or
advisable in connection therewith, of qualifying the Fund as a broker or dealer,
in such states of the United States or other jurisdictions as shall be selected
by the Fund and the Distributor pursuant to Section 5.4 hereof and the cost and
expense payable to each such state for continuing qualification therein until
the Fund decides to discontinue such qualification pursuant to Section 5.4
hereof.

Section 8. Indemnification
---------------
8.1 The Fund agrees to indemnify, defend and hold the Distributor, its
officers and Directors and any person who controls the Distributor within the
meaning of Section 15 of the Securities Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Distributor, its officers,
Directors or any such controlling person may incur under the Securities Act, or
under common law or otherwise, arising out of or based upon any untrue statement
of a

<PAGE>

material fact contained in the Registration Statement or Prospectus or
arising out of or based upon any alleged omission to state a material fact
required to be stated in either thereof or necessary to make the statements in
either thereof not misleading, except insofar as such claims, demands,
liabilities or expenses arise out of or are based upon any such untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing by the Distributor to the Fund
for use in the Registration Statement or Prospectus; provided, however, that
this indemnity agreement shall not inure to the benefit of any such officer,
Director or controlling person unless a court of competent jurisdiction shall
determine in a final decision on the merits, that the person to be indemnified
was not liable by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement (disabling conduct), or, in the absence of such
a decision, a reasonable determination, based upon a review of the facts, that
the indemnified person was not liable by reason of disabling conduct, by (a) a
vote of a majority of a quorum of Directors who are neither "interested persons"
of the Fund as defined in Section 2(a)(19) of the Investment Company Act nor
parties to the proceeding, or (b) an independent legal counsel in a written
opinion. The Fund's agreement to indemnify the Distributor, its officers and
Directors and any such controlling person as aforesaid is expressly conditioned
upon the Fund's being promptly notified of any action brought against the
Distributor, its officers or Directors, or any such controlling person, such
notification to be given in writing addressed to the Fund at its principal
business office. The Fund agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or Directors in connection with the issue and sale of any Class Z shares.

8.2 The Distributor agrees to indemnify, defend and hold the Fund, its
officers and Directors/Trustees and any person who controls the Fund, if any,
within the meaning of Section 15 of the Securities Act, free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending against such claims, demands or liabilities
and any counsel fees incurred in connection therewith) which the Fund, its
officers and Directors/Trustees or any such controlling person may incur under
the Securities Act or under common law or otherwise, but only to the extent that
such liability or expense incurred by the Fund, its Directors/Trustees or
officers or such controlling person resulting from such claims or demands shall
arise out of or be based upon any alleged untrue statement of a material fact
contained in information furnished in writing by the Distributor to the Fund for
use in the Registration Statement or Prospectus or shall arise out of or be
based upon any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or

<PAGE>

Prospectus or necessary to make such information not misleading. The
Distributor's agreement to indemnify the Fund, its officers and
Directors/Trustees and any such controlling person as aforesaid, is expressly
conditioned upon the Distributor's being promptly notified of any action brought
against the Fund, its officers and Directors/Trustees or any such controlling
person, such notification to be given to the Distributor in writing at its
principal business office.

Section 9. Duration and Termination of this Agreement
------------------------------------------
9.1 This Agreement shall become effective as of the date first above
written and shall remain in force for two years from the date hereof and
thereafter, but only so long as such continuance is specifically approved at
least annually by (a) the Board of Directors/Trustees of the Fund, or by the
vote of a majority of the outstanding voting securities of the Class Z shares of
the Fund and (b) by the vote of a majority of those Directors/Trustees who are
not parties to this Agreement or interested persons of any such parties and who
have no direct or indirect financial interest in this Agreement.

9.2 This Agreement may be terminated at any time, without the payment of
any penalty, by a majority of the Rule 12b-1 Directors/Trustees or by vote of a
majority of the outstanding voting securities of the Class Z shares of the Fund,
or by the Distributor, on sixty (60) days' written notice to the other party.
This Agreement shall automatically terminate in the event of its assignment.

9.3 The terms "affiliated person," "assignment," "interested person" and
"vote of a majority of the outstanding voting securities," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.

Section 10. Amendments to this Agreement
----------------------------
This Agreement may be amended by the parties only if such amendment is
specifically approved by the Board of Directors/Trustees of the Fund, or by the
vote of a majority of the outstanding voting securities of the Class Z shares of
the Fund.

Section 11. Governing Law
-------------
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the Investment Company Act. To the extent that the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year above written.

Prudential Securities
Incorporated

By:
--------------------------------
Robert F. Gunia
Senior Vice President

[FUND NAME]

By:
--------------------------------
Richard A. Redeker
President

CONSENT OF INDEPENDENT AUDITORS

We consent to the use in Post-Effective Amendment No. 30 to Registration
Statement No. 2-55301 of Prudential-Bache MoneyMart Assets Inc. of our report
dated February 1, 1995, appearing in the Statement of Additional Information,
which is a part of such Registration Statement, and to the references to us
under the headings "Financial Highlights" in the Prospectus, which is a part of
such Registration Statement, and "Custodian, Transfer and Dividend Disbursing
Agent and Independent Accountants" in the Statement of Additional Information.

/s/ DELOITTE & TOUCHE LLP

Deloitte & Touche LLP
New York, New York
October 24, 1995

PRUDENTIAL MONEYMART ASSETS, INC.
(the Fund)

PLAN PURSUANT TO RULE 18F-3

The Fund hereby adopts this plan pursuant to Rule 18f-3 under the
Investment Company Act of 1940 (the 1940 Act), setting forth the separate
arrangement and expense allocation of each class of shares. Any material
amendment to this plan is subject to prior approval of the Board of
Directors, including a majority of the independent Directors.

CLASS CHARACTERISTICS

CLASS A SHARES: Class A shares are not subject to either an initial or
- --------------- contingent deferred sales charge but are subject to a
distribution or service fee pursuant to Rule 12b-1 under the
1940 Act (Rule 12b-1 fee) not to exceed .125 of 1% per annum
of the average daily net assets of the class.

Class Z SHARES: Class Z shares are not subject to either an initial or
- --------------- contingent deferred sales charge nor are they subject to any
Rule 12b-1 fee.

INCOME AND EXPENSE ALLOCATIONS

Income, any realized and unrealized capital gains and losses, and expenses
not allocated to a particular class, will be allocated to each class on the
basis of relative net assets (settled shares). "Relative net assets (settled
shares)" are net assets valued in accordance with generally accepted accounting
principles but excluding the value of subscriptions receivable in relation to
the net assets of the Fund.

DIVIDENDS AND DISTRIBUTIONS

Dividends and other distributions paid by the Fund to each class of shares,
to the extent paid, will be paid on the same day and at the same time, and will
be determined in the same manner and will be in the same amount, except that the
amount of the dividends and other distributions declared and paid by a
particular class may be different from that paid by another class because of
Rule 12b-1 fees and other expenses borne exclusively by that class.

EXCHANGE PRIVILEGE

Each class of shares is generally exchangeable for the same class of shares
(or the class of shares with similar characteristics), if any, of the other
Prudential Mutual Funds

<PAGE>

(subject to certain minimum investment requirements) at relative net asset value
without the imposition of any sales charge.

GENERAL

A. Each class of shares shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its arrangement and shall
have separate voting rights on any matter submitted to shareholders in
which the interests of one class differ from the interests of any other
class.

B. On an ongoing basis, the Directors, pursuant to their fiduciary
responsibilities under the 1940 Act and otherwise, will monitor the Fund
for the existence of any material conflicts among the interests of its
several classes. The Directors, including a majority of the
independent Directors/Trustees, shall take such action as is reasonably
necessary to eliminate any such conflicts that may develop. Prudential
Mutual Fund Management, Inc., the Fund's Manager, will be responsible for
reporting any potential or existing conflicts to the Directors.

C. For purposes of expressing an opinion on the financial statements of the
Fund, the methodology and procedures for calculating the net asset value
and dividends/distributions of the Fund's several classes and the proper
allocation of income and expenses among such classes will be examined
annually by the Fund's independent auditors who, in performing such
examination, shall consider the factors set forth in the relevant auditing
standards adopted, from time to time, by the American Institute of
Certified Public Accountants.

Dated: January 2, 1996

<ARTICLE> 6

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