PRUDENTIAL MONEYMART ASSETS INC, 485APOS, 1998-12-31

PRUDENTIAL MONEYMART ASSETS INC
485APOS, 1998-12-31

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As filed with the Securities and Exchange Commission on December 31, 1998
Securities Act Registration No. 2-55301
Investment Company Act Registration No. 811-2619

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [_]
POST-EFFECTIVE AMENDMENT NO. 35 [X]

AND/OR

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 26 [X]

(Check appropriate box or boxes)

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PRUDENTIAL MONEYMART ASSETS, INC.
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(Exact name of registrant as specified in charter)

GATEWAY CENTER THREE,
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
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(Address of Principal Executive Offices) (Zip Code)

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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (973) 367-7530
ROBERT C. ROSSELOT, ESQ.
GATEWAY CENTER THREE,
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
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(Name and Address of Agent for Service)

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
March 1, 1999

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)

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

[_] on (date) pursuant to paragraph (a)(1)

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

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

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

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Title of Securities Being Registered ................Shares of Common Stock,
Par Value $.001 per Share

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Fund Type:
- ----------

Money market

Investment Objective:
- ---------------------

Maximum current income
consistent with stability of
capital and the maintenance
of liquidity

[PRUDENTIAL LOGO]

PRUDENTIAL MONEYMART ASSETS, INC.
- ---------------------------------

PROSPECTUS: MARCH 1, 1999

As with all mutual funds, the Securities
and Exchange Commission has not
approved the Fund's shares, nor has the
SEC determined that this prospectus is
complete or accurate. It is a criminal
offense to state otherwise.

[PRUDENTIAL LOGO]

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Table of Contents
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1 RISK/RETURN SUMMARY
1 Investment Objective and Principal Strategies
1 Principal Risks
3 Evaluating Performance
4 Fees and Expenses

5 HOW THE FUND INVESTS
5 Investment Objective and Policies
6 Other Investments
7 Additional Strategies
8 Investment Risks

10 HOW THE FUND IS MANAGED
10 Manager
10 Investment Adviser
10 Distributor
10 Year 2000 Readiness Disclosure

12 FUND DISTRIBUTIONS AND TAX ISSUES
12 Distributions
12 Tax Issues

14 HOW TO BUY AND SELL SHARES OF THE FUND
14 How to Buy Shares
18 How to Sell Your Shares
20 How to Exchange Your Shares

22 FINANCIAL HIGHLIGHTS

22 CLASS A SHARES

23 CLASS Z SHARES

24 THE PRUDENTIAL MUTUAL FUND FAMILY

FOR MORE INFORMATION (BACK COVER)

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Prudential MoneyMart Assets, Inc. (800) 225-1852

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RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------

This section highlights key information about PRUDENTIAL MONEYMART ASSETS, INC.,
which we refer to as "the Fund." Additional information follows this summary.

INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES

Our investment objective is MAXIMUM CURRENT INCOME CONSISTENT WITH STABILITY OF
CAPITAL AND THE MAINTENANCE OF LIQUIDITY. To achieve this objective we invest
primarily in commercial paper, asset-backed securities, obligations of financial
institutions and other high-quality money market instruments that mature in 13
months or less. While we make every effort to achieve our investment objective
and maintain a net asset value of $1 per share, we can't guarantee success. To
date, the Fund's net asset value has never deviated from $1 per share.

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MONEY MARKET FUNDS

Money market funds--which hold high-quality
short-term debt obligations--provide investors
with a lower risk, highly liquid investment
option. These funds attempt to maintain a net
asset value of $1 per share, although there can be
no guarantee that they will always be able to do
so.

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PRINCIPAL RISKS

Although we look to invest wisely, all investments involve risk. The money
market securities in which the Fund invests are generally subject to the risk
that the issuer of a particular security may be unable to make principal and
interest payments when they are due. There is also the risk that the securities
could lose value because interest rates change or investors lose confidence in
the ability of issuers in general to pay back their debt. The Fund's investments
in foreign securities involve certain additional risks. For example, foreign
banks and companies generally are not subject to regulatory requirements
comparable to those applicable to U.S. banks and companies. In addition,
political developments and changes in currency rates may adversely affect the
value of the Fund's foreign securities. In all cases, however, we invest only in
U.S. dollar-denominated securities. Although investments in mutual funds involve
risk, investing in money market portfolios like the Fund is generally less risky
than investments in other types of funds. This is because the Fund invests only
in high-quality securities, limits the average maturity of the portfolio to 90
days or less, and limits the maturity of any security to no more than 13 months.
To satisfy the average maturity and maximum maturity requirements, securities
with demand features, described later, are treated as maturing on the date that
the Fund can demand repayment of the security.

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RISK/RETURN SUMMARY
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An investment in the Fund is not a bank deposit and is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your investment at $1 per
share, it is possible to lose money by investing in the Fund.

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Prudential MoneyMart Assets, Inc. (800) 225-1852

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RISK/RETURN SUMMARY
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EVALUATING PERFORMANCE

A number of factors--including risk--can affect how the Fund performs. The
following bar chart and table show the Fund's performance for each full calendar
year of operation for the last 10 years and provide some indication of the risks
of investing in the Fund by demonstrating how returns can change from year to
year. Past performance does not mean that the Fund will achieve similar results
in the future. For current yield information, you can call us at (800) 225-1852
(toll free).

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ANNUAL RETURNS (Class A shares)
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1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
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[BAR CHART]

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BEST QUARTER: WORST QUARTER:
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AVERAGE ANNUAL RETURNS (as of 12/31/98)
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1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
Class A shares1 ___ ___ ___ ___________
Class Z shares1 ___ ___ ___ ___________
Lipper Average2 ___ ___ ___ ___________
7-Day yield of ___ ___ ___ ___________
the Fund (as of
December 31,
1998)

1 The Fund's returns and yield are after deduction of expenses.

2 The Lipper Average is based upon the average return of all mutual funds in the
U.S. Taxable Money Market Funds category.

3
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RISK/RETURN SUMMARY
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SHAREHOLDER FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

SHAREHOLDER FEES (paid directly from your investment)
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CLASS A CLASS Z
Maximum sales charge (load) None None
imposed on purchases (as a percentage of
offering price)
Maximum deferred sales charge (load) (as a None None
percentage of the lower of original purchase
price or sale proceeds)
Maximum sales charge (load) None None
imposed on reinvested dividends
and other distributions
Redemption fees None None
Exchange fee None None

ANNUAL FUND OPERATING EXPENSES (deducted from Fund assets)
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CLASS A CLASS Z
Management fees .301% .301%
+ Distribution and service (12b-1) fees .125% None
+ Other expenses .275% .275%
= Total annual Fund operating expenses .701% .576%

EXAMPLE

This example will help you compare the fees and expenses of the Fund's different
share classes and compare the cost of investing in the Fund with the cost of
investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

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1 YR 3 YRS 5 YRS 10 YRS
Class A shares $__ $__ $__ $__
Class Z shares $__ $__ $__ $__

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Prudential MoneyMart Assets, Inc. (800) 225-1852

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HOW THE FUND INVESTS
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INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is MAXIMUM CURRENT INCOME CONSISTENT WITH
STABILITY OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY. While we make every
effort to achieve our objective, we can't guarantee success.

The Fund invests in high-quality money market instruments to try to provide
investors with current income while maintaining a stable net asset value of $1
per share. We manage the Fund to comply with specific rules designed for money
market mutual funds. We will purchase obligations such as commercial paper,
asset-backed securities, certificates of deposit, time deposits of banks,
bankers' acceptances, bank notes, funding agreements and other obligations of
both banks and corporations. These obligations must be rated in one of the two
highest rating categories by at least two nationally recognized statistical
rating organizations (NRSROs), such as Moody's Investors Service, Inc. (rated at
least Prime-2), Standard & Poor's Ratings Group (rated at least A-2) and Fitch
IBCA (rated at least F2) or, if unrated, of comparable quality. We may also
purchase securities of the U.S. Government and its agencies. All securities that
we purchase will be denominated in U.S. dollars.

COMMERCIAL PAPER is short-term debt obligations of banks, corporations and
other borrowers. The obligations are usually issued by financially strong
businesses and often include a line of credit to protect purchasers of the
obligations. An ASSET-BACKED SECURITY is a loan or note that pays interest based
upon the cash flow of a pool of assets, such as mortgages, loans and credit card
receivables. FUNDING AGREEMENTS are contracts issued by insurance companies that
guarantee a return of principal, plus some amount of interest. When purchased by
money market funds, funding agreements will typically be short-term and provide
an adjustable rate of interest. CERTIFICATES OF DEPOSIT, TIME DEPOSITS, BANKERS'
ACCEPTANCES and BANK NOTES are obligations issued by or through a bank. These
instruments depend upon the strength of the bank involved in the borrowing to
give investors comfort that the borrowing will be repaid when promised.

DEBT OBLIGATIONS in general, including those listed above and any others
that we may purchase, are basically written promises to repay a debt. Among the
various types of debt securities we may purchase, the terms of repayment may
vary, as may the commitment of other parties to honor the obligations of the
issuer of the security. We may purchase securities that include DEMAND FEATURES,
which allow us to demand repayment of a debt obligation before the obligation is
due or "matures". This means that we can purchase longer-term securities because
of our expectation that we can demand repayment of the

5
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HOW THE FUND INVESTS
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obligation at an agreed-upon price within a relatively short period of time.
This procedure follows the rules applicable to money market funds.

The securities that we may purchase may change over time as new types of
money market instruments are developed. We will purchase these new instruments,
however, only if their characteristics and features follow the rules governing
money market funds.

Any of the money market instruments that the Fund may purchase may be
accompanied with the right to resell the instrument prior to the instrument's
maturity. In addition, we may separately purchase rights to resell these
instruments. These rights are referred to as "PUTS." The purchase of puts
standing alone or with an instrument allows the Fund to sell the security when
the investment adviser believes it is appropriate to do so to honor redemption
requests or to buy more attractive securities.

Our investment objective is a fundamental policy that cannot be changed
without shareholder approval. The Board of Directors of the Fund can change
investment policies that are not fundamental.

OTHER INVESTMENTS

The Fund may also invest in DEBT OBLIGATIONS ISSUED BY THE U.S. TREASURY.
Treasury securities have different interest rates and maturities, but they are
all backed by the full faith and credit of the U.S. Government.

Treasury debt obligations are sometimes "stripped" into their component
parts: the Treasury's obligation to make periodic interest payments and its
obligation to repay the amount borrowed. These STRIPPED SECURITIES are sold to
investors separately. Stripped securities do not make periodic interest
payments. They are typically sold at a discount and then redeemed for their face
value on their maturity dates. These securities increase in value when interest
rates fall and lose value when interest rates rise. However, the value of
stripped securities generally fluctuates more in response to interest rate
movements than the value of traditional debt securities. The Fund may try to
earn money by buying stripped securities at a discount and either selling them
after they increase in value or holding them until they mature.

The Fund may also invest in other DEBT OBLIGATIONS ISSUED OR GUARANTEED BY
THE U.S. GOVERNMENT and government-related entities. Some of these debt
securities are backed by the full faith and credit of the U.S. Government, like
obligations of the Government National Mortgage Association (GNMA or "Ginnie
Mae"). Debt securities issued by other government entities, like obligations of
the Federal National Mortgage Association (FNMA or "Fannie Mae") and the Student
Loan Marketing Association (SLMA or "Sallie Mae"),

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Prudential MoneyMart Assets, Inc. (800) 225-1852

6
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HOW THE FUND INVESTS
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are not backed by the full faith and credit of the U.S. Government. However,
these issuers have the right to borrow from the U.S. Treasury to meet their
obligations. The debt securities of other issuers, like the Farm Credit System,
depend entirely upon their own resources to repay their debt.

The Fund may also use REPURCHASE AGREEMENTS, where a party agrees to sell a
security to the Fund and then repurchase it at an agreed-upon price at a stated
time. This creates a fixed return for the Fund.

ADDITIONAL STRATEGIES

We may use a number of investment strategies to try to improve the Fund's
returns or protect its assets.

The Fund may use REVERSE REPURCHASE AGREEMENTS, where we borrow money on a
temporary basis by selling a security with an obligation to repurchase it at an
agreed-upon price and time.

The Fund may also purchase money market obligations on a "WHEN-ISSUED" or
"DELAYED-DELIVERY" basis. When the Fund makes this type of purchase, the price
and interest rate are fixed at the time of purchase, but delivery and payment
for the obligations take place at a later time. The Fund does not earn interest
income until the date the obligations are delivered.

The Fund may purchase FLOATING RATE and VARIABLE RATE securities. These
securities pay interest at rates that change periodically to reflect changes in
market interest rates. Because these securities adjust the interest they pay,
they may be beneficial when interest rates are rising because of the additional
return the Fund will receive, and they may be detrimental when interest rates
are falling because of the reduction in interest payments to the Fund.

The Fund intends to purchase investment securities jointly with certain
other mutual funds. Our ability to engage in joint investment is subject to
conditions imposed by an order of the Securities and Exchange Commission. Joint
investment can allow the Fund to achieve better investment performance because
of reduced transaction costs and greater investment leverage.

The Fund also follows certain policies when it: (1) BORROWS MONEY (the Fund
may borrow up to 10% of the value of its net assets); (2) LENDS ITS SECURITIES
to others (the Fund may lend up to 10% of its total assets, including collateral
received in the transaction); and (3) holds ILLIQUID SECURITIES (the Fund may
hold up to 10% of its net assets in illiquid securities, including securities
with legal or contractual restrictions, those without a readily available
market, and repurchase agreements with maturities longer than seven days). The
Fund is subject to certain investment restrictions that are fundamental

7
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HOW THE FUND INVESTS
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policies, which means they cannot be changed without shareholder approval. For
more information about these restrictions, see the SAI.

INVESTMENT RISKS

The Fund's investments in money market instruments involve both CREDIT RISK
- --the possibility that the issuer of a particular security will default, and
MARKET RISK--the risk that an instrument will lose value because interest rates
change or investors lose confidence in the ability of issuers in general to pay
back their debt. To limit these risks, we invest only in high-quality securities
with short maturities (no more than 13 months).

Foreign securities (i.e., securities of non-U.S. based issuers) and foreign
markets involve additional risk. Foreign laws and accounting standards typically
are not as strict as they are in the U.S. Foreign fixed income and currency
markets may be less stable than U.S. markets. Changes in the exchange rates of
foreign currencies can affect the value of foreign assets. There is a risk that
foreign companies and governments, just as is the case in the U.S., will not be
prepared to handle issues that will arise when we reach the year 2000 if their
computer systems cannot differentiate the year 2000 from the year 1900.

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Prudential MoneyMart Assets, Inc. (800) 225-1852

8
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HOW THE FUND INVESTS
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This chart outlines the key risks and potential rewards of the principal
investments of the Fund. See, too, "Description of the Fund, Its Investments and
Risks" in the SAI.

INVESTMENT TYPE
% OF FUND'S TOTAL ASSETS RISKS POTENTIAL REWARDS
- --------------------------------------------------------------------------------
o Credit risk--the o Regular interest
HIGH-QUALITY MONEY MARKET risk that the income
OBLIGATIONS OF ALL TYPES borrower can't pay o May be more
back the money secure than stock and
Up to 100% borrowed or make equity securities
interest payments since companies must
o Market risk--the pay their debts before
risk that the they pay dividends
obligations may lose
value because interest
rates change or
investors lose
confidence in
borrowers in general
or in a particular
industry
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o Foreign o Investors may
MONEY MARKET OBLIGATIONS markets, economies realize higher returns
OF FOREIGN ISSUERS and political systems based
(DOLLAR-DENOMINATED) may not be upon higher interest
as stable as those in rates paid on foreign
Up to 100% the U.S. investments
o May be less o Increased
public information diversification
about foreign issuers by expanding the
allowable choices of
high quality debt
securities.
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o May be o May offer a more
ILLIQUID SECURITIES difficult to value attractive yield than
and sell liquid securities
Up to 10% of net assets o Could result in
losses
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HOW THE FUND IS MANAGED
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MANAGER
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC (PIFM)
GATEWAY CENTER THREE, 100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077

Under a management agreement with the Fund, PIFM manages the Fund's
investment operations and administers its business affairs. For the fiscal year
ended December 31, 1998, the Fund paid PIFM management fees of [__%] of the
Fund's average net assets.

As of January 31, 1999, PIFM served as the Manager to all __ of the
Prudential Mutual Funds, and as Manager or administrator to __ closed-end
investment companies, with aggregate assets of approximately $__ billion.

INVESTMENT ADVISER

The Prudential Investment Corporation, called Prudential Investments, is the
Fund's investment adviser. Its address is Prudential Plaza, 751 Broad Street,
Newark, NJ 07102. PIFM has responsibility for all investment advisory services,
supervises Prudential Investments and reimburses Prudential Investments for its
reasonable costs and expenses.

DISTRIBUTOR

Prudential Investment Management Services LLC (PIMS) distributes the Fund's
shares under a Distribution Agreement with the Fund. The Fund has a Distribution
and Service Plan under Rule 12b-1 of the Investment Company Act with respect to
Class A shares. Under the Plan and the Distribution Agreement, PIMS pays the
expenses of distributing the Fund's Class A shares and provides certain
shareholder support services. The Fund pays distribution and other fees from the
assets of Class A shares to PIMS as compensation for its services. These
fees--known as 12b-1 fees--are shown in the "Shareholder Fees and Expenses"
table included in the Summary. Because these fees are paid from the assets of
Class A shares on a continuous basis, over time these fees will increase the
cost of your investment and may cost you more than paying other types of sales
charges. PIMS does not receive any compensation from the Fund for distributing
Class Z shares.

YEAR 2000 READINESS DISCLOSURE

Many computer systems used today cannot tell the year 2000 from the year 1900
because of the way dates are encoded. This could be a problem when the year 2000
arrives and could affect securities trades, interest and dividend

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Prudential MoneyMart Assets, Inc. (800) 225-1852

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HOW THE FUND IS MANAGED
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payments, pricing and account services. Although we cannot guarantee that this
will not be a problem, the Fund's service providers have been working on
adapting their computer systems. They expect that their systems, and the systems
of their service providers, will be ready for the year 2000.

In addition, issuers of securities may encounter year 2000 compliance
problems. If these problems are significant and are not corrected, securities
markets could go down or issuers could have poor performance. If the Fund owns
these securities, then it is possible that the Fund could lose money.

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FUND DISTRIBUTIONS AND TAX ISSUES
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Investors who buy shares of the Fund should be aware of some important tax
issues. For example, the Fund distributes DIVIDENDS and CAPITAL GAINS, if any,
to shareholders. These distributions are subject to taxes, unless you hold your
shares in a 401(k) plan, an Individual Retirement Account (IRA), or some other
qualified tax-deferred plan or account.

The following briefly discusses some of the important tax issues you should
be aware of, but is not meant to be tax advice. For tax advice, please speak
with your tax adviser.

DISTRIBUTIONS

The Fund distributes DIVIDENDS of any net investment income to shareholders
every month. The dividends you receive from the Fund will be taxed as ORDINARY
INCOME, whether or not they are reinvested in the Fund.

Although the Fund is not likely to realize capital gains because of the
types of securities we purchase, any realized net CAPITAL GAINS will be paid to
shareholders (typically once a year). CAPITAL GAINS are generated when the Fund
sells assets for a profit.

For your convenience, Fund distributions of dividends and capital gains are
automatically reinvested in the Fund. If you ask us to pay the distributions in
cash, we will send you a check instead of purchasing more shares of the Fund.
Either way, the distributions are subject to taxes, unless your shares are held
in a qualified tax-deferred plan or account. For more information about
automatic reinvestment and other shareholder services, see "How to Buy, Sell and
Exchange Shares of the Fund - How To Buy Shares" at STEP 4: ADDITIONAL
SHAREHOLDER SERVICES.

TAX ISSUES
FORM 1099

Every year, you will receive a FORM 1099, which reports the amount of dividends
and capital gains we distributed to you during the prior year. If you own shares
of the Fund as part of a qualified tax-deferred plan or account, your taxes are
deferred, so you will not receive a Form 1099. However, you will receive a Form
1099 when you take any distributions from your qualified tax-deferred plan or
account.

Fund distributions are generally taxable in the year they are received,
except where we declare certain dividends in December of a calendar year but
actually pay them in January of the following year. In such cases, the dividends
are treated as if they were paid on December 31 of the prior year.

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Prudential MoneyMart Assets, Inc. (800) 225-1852

12
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FUND DISTRIBUTIONS AND TAX ISSUES
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WITHHOLDING TAXES

If federal law requires you to provide the Fund with your tax identification
number and certifications as to your tax status, and you fail to do so, or if
you are otherwise subject to back-up withholding, we will withhold and pay to
the U.S. Treasury 31% of your distributions. Dividends of net investment income
and short-term capital gains paid to a NONRESIDENT FOREIGN SHAREHOLDER generally
will be subject to a U.S. withholding tax of 30%. This rate may be lower,
depending on any tax treaty the U.S. may have with the shareholder's country.

<PAGE>

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HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE FUND
- --------------------------------------------------------------------------------

HOW TO BUY SHARES

STEP 1: OPEN AN ACCOUNT

If you don't have an account with us or a securities firm that is permitted to
buy or sell shares of the Fund for you, call Prudential Mutual Fund Services LLC
(PMFS) at (800) 225-1852 or contact:

PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: INVESTMENT SERVICES
P.O. BOX 15020
NEW BRUNSWICK, NJ 08906-5020

To purchase by wire, call the number above to obtain an application. After
PMFS receives your completed application, you will receive an account number.
For additional information about purchasing shares of the Fund, see the back
cover page of this prospectus. We have the right to reject any purchase order or
suspend or modify the Fund's sale of its shares.

STEP 2: CHOOSE A SHARE CLASS

The Fund offers Class A and Class Z shares. Except as noted below, the minimum
initial investment for Class A shares is $1,000 and the minimum subsequent
investment is $100. There are no minimum initial or subsequent investment
requirements for Class Z shares. Class Z shares of the Fund are available for
purchase only by any of the following:

o Any Benefit Plan (i.e., a pension, profit sharing or other employee benefit
plan qualified under Section 401 of the Internal Revenue Code, a deferred
compensation or annuity plan under Sections 403(b) and 457 of the Internal
Revenue Code, a "rabbi trust" or a non-qualified deferred compensation plan
sponsored by an employer that has a tax qualified benefit plan with an
affiliate of the manager, collectively referred to as "Prudential")
provided the Benefit Plan--in combination with other plans sponsored by the
same employer or group of related employers--has at least $50 million in
defined contribution assets

o Participants in any fee-based program or trust program sponsored by
Prudential or an affiliate which includes mutual funds as investment
options and the Fund as an available option

o Certain participants in the MEDLEY Program (group variable annuity
contracts) sponsored by Prudential for whom Class Z shares of the
Prudential Mutual Funds are an available option

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Prudential MoneyMart Assets, Inc. (800) 225-1852

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o Benefit Plans for which an affiliate of the Distributor provides
administrative or recordkeeping services and, as of September 20, 1996,
were either Class Z shareholders of the Prudential Mutual Funds or executed
a letter of intent to purchase Class Z shares of the Prudential Mutual
Funds

o Current and former Directors/Trustees of the Prudential Mutual Funds
(including the Fund)

o Employees of Prudential and/or Prudential Securities who participate in a
Prudential-sponsored employee savings plan

o Prudential with an investment of $10 million or more

All minimum investment requirements are waived for certain retirement and
employee savings plans and custodial accounts for the benefit of minors. For
automatic purchases through Prudential Securities, the minimum initial
investment requirement is $1,000 and there is no minimum subsequent investment
requirement.

PURCHASES THROUGH PRUDENTIAL SECURITIES

Automatic Investment (Autosweep). If you purchase Class A shares of the Fund
through Prudential Securities, you may be able to invest through automatic
investment procedures (the Autosweep program). The Autosweep program allows you
to designate a money market fund as your primary money sweep fund. If you do not
designate a primary money sweep fund, the Fund will automatically be your
primary money sweep fund. You have the option to change your primary money sweep
fund at any time by notifying your Prudential Securities financial adviser.

When your Prudential Securities account has a credit balance (that is,
immediately available funds), Prudential Securities will purchase Class A shares
of the Fund equal to that amount. This will occur on the business day following
confirmation that a credit balance exists, which is the second business day
after receipt of the purchase order by Prudential Securities. Prudential
Securities may use and retain the benefit of credit balances in your account
until Fund shares are purchased.

Your investment in the Fund will be held in the name of Prudential
Securities. Prudential Securities will receive all statements and dividends from
the Fund and will, in turn, send you account statements showing your purchases,
sales and dividends.

Automatic Purchase Procedures. Credit balances of $1000 or more in your
account resulting from the proceeds of a securities sale, or credit balances of

15
<PAGE>

$10,000 or more resulting from a non-trade related credit (e.g., receipt of a
dividend or interest payment, maturity of a bond or call or a payment into the
securities account), will automatically be invested in Class A shares of the
Fund. Where your credit balance results from a sale of securities, the available
cash will be reinvested in the Fund on settlement date. Where your credit
balance results from a non-trade related credit, the available cash will be
invested in the Fund on the first business day after it is received by
Prudential Securities. For eligible credit balances of $1 or more not otherwise
described above, Class A shares will be purchased automatically on the last
business day of each month.

<TABLE>
<CAPTION>
The following chart shows the frequence and amount of the sweep:

<S> <C> <C>
Daily Monthly
---------------------------------------------- -------------------- ---------------
Credit Balances resulting from $1,000 or more
the proceeds of a securities sale

Credit Balances resulting from $10,000 or more
a non-trade-related credit, including
the maturity of a bond or call

Remaining Credit Balances $1.00 or more
-------------------------------------------------------------------------------------------
</TABLE>

You will begin earning dividends on your shares purchased through Autosweep
on the day the order is placed. Prudential Securities will purchase Class A
shares of the Fund at 4:30 p.m. New York Time on the business day the order is
placed and payment for the shares will be made by 4:30 p.m. New York Time on the
next business day.

PURCHASES THROUGH THE PRUDENTIAL ADVANTAGE ACCOUNT PROGRAM

The Prudential Advantage Account Program (the Advantage Account Program) is a
financial services program available to clients of Pruco Securities Corporation
(Prusec) and provides for an automatic investment procedure similar to the
Autosweep program. The Advantage Account Program allows you to designate a
market money fund as your primary money sweep fund. If you do not designate a
primary money sweep fund, the Fund will automatically be your primary money
sweep fund. You have the option to change your primary money sweep fund at any
time by notifying your Prusec financial adviser.

When your Prusec securities account has a credit balance (that is,
immediately available funds), your Financial Representative will purchase Class

- --------------------------------------------------------------------------------
Prudential MoneyMart Assets, Inc. (800) 225-1852

16
<PAGE>

A shares of the Fund equal to that amount. This will occur on the business day
following confirmation that a credit balance exists. Prudential Securities,
which arranges for the investment of the credit balance in Class A shares, may
use and retain the benefit of credit balances in your account until Fund shares
are purchased (that is, until the next business day).

The charges and expenses of the Advantage Account Program are not reflected
in the Shareholder Fees and Expenses table. For information about participating
in the Advantage Account Program, you should call (800) 235-7637 (toll free).

Automatic Purchase Procedures. Credit balances of $1 or more in your account
will automatically be invested in Class A shares of the Fund. Where your credit
balance results from a sale of securities, the available cash will be reinvested
in the Fund on settlement date. Where your credit balance results from any other
transaction (that is, receipt of a dividend or interest payment, maturity of a
bond or your own cash payment to your securities account), the available cash
will be invested in the Fund on the first business day after it is received by
Prudential Securities. All available cash in your account, regardless of its
source, will automatically be invested.

You will begin earning dividends on your shares purchased through the
Advantage Account Program on the day the order is placed. Prudential Securities
will purchase shares of the Fund at 4:30 p.m. New York Time on the business day
the order is placed and payment for the shares will be made by 4:30 p.m. New
York Time on the next business day.

STEP 3: UNDERSTANDING THE PRICE YOU'LL PAY

When you invest in a mutual fund, you buy shares of the Fund. Shares of a money
market mutual fund, like the Fund, are priced differently than shares of common
stock and other securities.

The price you pay for each share of the Fund is based on the share value.
The share value of a mutual fund--known as the NET ASSET VALUE or NAV--is
determined by a simple calculation; the total value of the Fund (assets minus
liabilities) divided by the total number of shares outstanding. In determining
NAV, the Fund values its securities using the amortized cost method. The Fund
seeks to maintain an NAV of $1 per share at all times.

17
<PAGE>

We determine the NAV of our shares once each business day at 4:30 p.m. New
York Time on days that the New York Stock Exchange is open for trading. We do
not determine NAV on days when we have not received any orders to purchase,
sell, or exchange or when changes in the value of the Fund's portfolio do not
affect the NAV.

STEP 4: ADDITIONAL SHAREHOLDER SERVICES

As a Fund shareholder, you can take advantage of the following services and
privileges:

Automatic Reinvestment. As we explained in the "Fund Distributions and Tax
Issues" section, the Fund pays out--or distributes--its net investment income
and any capital gains to all shareholders. For your convenience, we will
automatically reinvest your distributions in the Fund at NAV. If you want your
distributions paid in cash, you can indicate this preference on your
application, notify your broker or notify the Transfer Agent in writing at least
five business days before the date we determine who receives dividends. The
mailing address of the Transfer Agent is:

PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTENTION: ACCOUNT MAINTENANCE
P.O. BOX 15015
NEW BRUNSWICK, NJ 08906-5015

Reports to Shareholders. Every year we will send you an annual report (along
with an updated prospectus) and a semi-annual report, which contain important
financial information about the Fund. If there are multiple shareholders in the
same household, you will receive only one copy of each of these per household.

HOW TO SELL YOUR SHARES

You can sell your shares of the Fund for cash (in the form of a check) at any
time, subject to certain restrictions.

When you sell shares of the Fund--also known as redeeming shares--the price
you will receive will be the NAV next determined after we receive your order to
sell. Prudential Securities must receive your order to sell by 4:30 p.m. New
York Time to process the sale on that day.

Generally, we will pay you for the shares that you sell within seven days
after the Transfer Agent, the Distributor or your broker receives your sell
order. If you hold shares through a broker, payment will be credited to your
account. If you are selling shares you recently purchased with a check, we may
delay

- --------------------------------------------------------------------------------
Prudential MoneyMart Assets, Inc. (800) 225-1852

18
<PAGE>
- --------------------------------------------------------------------------------
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE FUND
- --------------------------------------------------------------------------------

payment of your proceeds until your check clears, which can take up to 10 days
from the purchase date. You can avoid delay if you purchase shares by wire,
certified check or cashier's check. Your broker may charge you a separate or
additional fee for sales of shares.

Restrictions on Sales. There are certain times when you may not be able to sell
shares of the Fund or when we may delay paying you the proceeds from a sale.
This may happen during unusual market conditions or emergencies when the Fund
can't determine the value of its assets or sell its holdings. For more
information, see the SAI, "Purchase, Redemption and Pricing of Fund Shares."

If you are selling more than $50,000 of shares, you want the check sent to
someone or someplace that is not in our records or you are a business or trust,
and if you hold your shares directly with the Transfer Agent, you may have to
have the signature on your sell order guaranteed by a financial institution.

Redemption in Kind. If the sales of Fund shares you make during any 90-day
period reaches the lesser of $250,000 or 1% of the value of the Fund's net
assets, we can then give you securities from the Fund's portfolio instead of
cash. If you want to sell the securities for cash, you would have to pay the
costs charged by a broker.

Automatic Redemption for Autosweep. If you participate in the Autosweep program,
your Fund shares may be automatically redeemed to cover any deficit in your
Prudential Securities account. The amount redeemed will be the nearest dollar
amount necessary to cover the deficit.

The amount of the redemption will be the lesser of the total value of Fund
shares held in your Prudential Securities account or the deficit in your
Prudential Securities account. If you use this automatic redemption procedure
and want to pay for a securities transaction in your account other than through
this procedure, you must deposit cash in your securities account before the
settlement date. If you use this automatic redemption procedure and want to pay
any other deficit in your securities account other than through this procedure,
you must deposit cash in your securities account before you incur the deficit.

Redemptions are automatically made by Prudential Securities, to the nearest
dollar, on each day to satisfy deficits from securities transactions or to honor
your redemption requests. Your account will be automatically scanned for
deficits each day and, if there is insufficient cash in your account, we will

19
<PAGE>

redeem an appropriate number of shares of the Fund at the next determined NAV to
satisfy any remaining deficit. You are entitled to any dividends declared on the
redeemed shares through the day before the redemption is made. Dividends
declared on the redemption date will be retained by Prudential Securities, which
has advanced monies to satisfy deficits in your account.

Automatic Redemption for the Advantage Account. If you participate in the
Advantage Account Program, your Fund shares may be automatically redeemed to
cover any deficit in your securities account. The amount redeemed will be the
nearest dollar amount necessary to cover the deficit.

The amount of the redemption will be the lesser of the total value of Fund
shares held in your securities account or the deficit in your securities
account. A deficit in your Advantage Account may result from activity arising
under the program, such as debit balances incurred by the use of the Visa(R)
Account, including Visa purchases, cash advances and Visa Account checks. Your
account will be automatically scanned for deficits each day and, if there is
insufficient cash in your account, we will redeem an appropriate number of
shares of the Fund to satisfy any remaining deficit. You are entitled to any
dividends declared on the redeemed shares through the day before the redemption
is made. Dividends declared on the redemption date will be retained by
Prudential Securities, which has advanced monies to satisfy deficits in your
account.

Redemptions are automatically made by Prudential Securities, to the nearest
dollar, on each day to satisfy deficits from securities transactions or to honor
your redemption requests.

HOW TO EXCHANGE YOUR SHARES

You can exchange your shares of the Fund for shares of the same class in certain
other Prudential Mutual Funds--including certain money market funds--if you
satisfy the minimum investment requirements of such other Prudential Mutual
Fund. For example, you can exchange Class A shares of the Fund for Class A
shares of another Prudential Mutual Fund, but you can't exchange Class A shares
for Class B shares, except that shares purchased prior to January 22, 1990 that
are subject to a contingent deferred sales charge can be exchanged for Class B
shares.

If you hold shares through a broker, you must exchange shares through your
broker. Otherwise, contact:

- --------------------------------------------------------------------------------
Prudential MoneyMart Assets, Inc. (800) 225-1852

20
<PAGE>

PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: EXCHANGE PROCESSING
P.O. BOX: 15010
NEW BRUNSWICK, NJ 08906-5010

When you exchange Class A shares of the Fund for Class A shares of any
other Prudential Mutual Fund, you will be subject to any sales charge that may
be imposed by such other Prudential Mutual Fund. The sales charge is imposed at
the time of your exchange.

If you qualify to purchase Class Z shares, any Class A shares that you own
will be automatically exchanged for Class Z shares on a quarterly basis.
Eligibility for this special exchange privilege is determined on the business
day prior to the date of the exchange.

If you participate in any fee-based program where the Fund is an available
investment option, your Class A shares, if any, will be automatically exchanged
for Class Z shares when you elect to participate in the fee-based program. When
you no longer participate in the program, all of your Class Z shares, including
shares purchased while you were in the program, will be automatically exchanged
for Class A shares. Likewise, if you are entitled to purchase Class Z shares as
a participant in Prudential Securities' 401(k) Plan and you seek to transfer
your Class Z shares out of the 401(k) Plan after your voluntary or involuntary
termination of employment or retirement, your Class Z shares held in the 401(k)
Plan will be automatically exchanged for Class A shares.

FREQUENT TRADING

Frequent trading of Fund shares in response to short-term fluctuations in the
market--also known as "market timing"--may make it very difficult to manage the
Fund's investments. Also, when market timing occurs, the Fund may have to sell
portfolio securities to have the cash necessary to redeem the market timer's
shares. This can happen at a time when it is not advantageous to sell any
securities, so the Fund's performance may be hurt. When large dollar amounts are
involved, market timing can also make it difficult to use long-term investment
strategies because we cannot predict how much cash the Fund will have to invest.
When in our opinion such activity would have a disruptive effect on portfolio
management, the Fund reserves the right to refuse purchase orders and exchanges
into the Fund by any person, group or commonly controlled accounts. The Fund may
notify a market timer of rejection of an

21
<PAGE>

exchange purchase order subsequent to the day the order is placed. If the Fund
allows a market timer to trade Fund shares, it may require the market timer to
enter into a written agreement to follow certain procedures and limitations.

<PAGE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The financial highlights will help you evaluate the Fund's financial
performance. The TOTAL RETURN in the chart represents the rate that a
shareholder earned on an investment in the Fund, assuming reinvestment of all
dividends and other distributions. The information is for shares of the Fund for
the periods indicated. The financial statements and audit reports are available
upon request.

Review this chart with the financial statements which appear in the SAI.
Additional performance information is contained in the annual report, which you
can receive at no charge.

CLASS A SHARES

The financial highlights for the two fiscal years ended December 31, 1998 were
audited by PricewaterhouseCoopers LLP, independent accountants, and the
financial highlights for the three years ended December 31, 1996 were audited by
other independent auditors. Their reports were unqualified.

[financial highlights to be inserted]

- --------------------------------------------------------------------------------
Prudential MoneyMart Assets, Inc. (800) 225-1852

23
<PAGE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

CLASS Z SHARES

The financial highlights for the two fiscal years ended December 31, 1998 were
audited by PricewaterhouseCoopers LLP, and the financial highlights for the
period from March 1, 1996 to December 31, 1996 was audited by other independent
auditors. Their reports were unqualified.

[financial highlights to be inserted]

<PAGE>

- --------------------------------------------------------------------------------
THE PRUDENTIAL MUTUAL FUND FAMILY
- --------------------------------------------------------------------------------

Prudential offers a broad range of mutual funds designed to meet your individual
needs. For information about these funds, contact your financial adviser or call
us at (800) 225-1852. Read the prospectus carefully before you invest or send
money.

STOCK FUNDS

PRUDENTIAL DISTRESSED SECURITIES FUND, INC.

PRUDENTIAL EMERGING GROWTH FUND, INC.

PRUDENTIAL EQUITY FUND, INC.

PRUDENTIAL EQUITY INCOME FUND

PRUDENTIAL INDEX SERIES FUND

Prudential Small-Cap Index Fund
Prudential Stock Index Fund

THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.

Prudential Jennison Growth Fund
Prudential Jennison Growth
& Income Fund

PRUDENTIAL MID-CAP VALUE FUND

PRUDENTIAL REAL ESTATE SECURITIES FUND

PRUDENTIAL SMALL-CAP QUANTUM FUND, INC.

PRUDENTIAL SMALL COMPANY VALUE
FUND, INC.

PRUDENTIAL 20/20 FOCUS FUND

PRUDENTIAL UTILITY FUND, INC.

NICHOLAS-APPLEGATE FUND, INC.

Nicholas-Applegate Growth Equity Fund

ASSET ALLOCATION/BALANCED FUND

PRUDENTIAL BALANCED FUND

PRUDENTIAL DIVERSIFIED FUNDS

Conservative Growth Fund
Moderate Growth Fund
High Growth Fund

THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.

Prudential Active Balanced Fund

GLOBAL FUNDS

GLOBAL STOCK FUNDS

PRUDENTIAL DEVELOPING MARKETS FUND

Prudential Developing Markets
Equity Fund
Prudential Latin America Equity Fund

PRUDENTIAL EUROPE GROWTH FUND, INC.

PRUDENTIAL GLOBAL GENESIS FUND, INC.

PRUDENTIAL INDEX SERIES FUND

Prudential Europe Index Fund
Prudential Pacific Index Fund

PRUDENTIAL NATURAL RESOURCES
FUND, INC.

PRUDENTIAL PACIFIC GROWTH FUND, INC.

PRUDENTIAL WORLD FUND, INC.

Global Series
International Stock Series

GLOBAL UTILITY FUND, INC.

GLOBAL BOND FUNDS

PRUDENTIAL GLOBAL LIMITED MATURITY FUND, INC.

Limited Maturity Portfolio

PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.

PRUDENTIAL INTERNATIONAL BOND
FUND, INC.

THE GLOBAL TOTAL RETURN FUND, INC.

- --------------------------------------------------------------------------------
Prudential MoneyMart Assets, Inc. (800) 225-1852

25
<PAGE>

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

BOND FUNDS

TAXABLE BOND FUNDS

PRUDENTIAL DIVERSIFIED BOND FUND, INC.

PRUDENTIAL GOVERNMENT INCOME FUND, INC.

PRUDENTIAL GOVERNMENT SECURITIES TRUST

Short-Intermediate Term Series

PRUDENTIAL HIGH YIELD FUND, INC.

PRUDENTIAL HIGH YIELD TOTAL RETURN
FUND, INC.

PRUDENTIAL INDEX SERIES FUND

Prudential Bond Market Index Fund

PRUDENTIAL STRUCTURED MATURITY FUND, INC.

Income Portfolio

TAX-EXEMPT BOND FUNDS

PRUDENTIAL CALIFORNIA MUNICIPAL FUND

California Series
California Income Series

PRUDENTIAL MUNICIPAL BOND FUND

High Income Series
Insured Series

PRUDENTIAL MUNICIPAL SERIES FUND

Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series

PRUDENTIAL NATIONAL MUNICIPALS FUND, INC.

MONEY MARKET FUNDS

TAXABLE MONEY MARKET FUNDS

CASH ACCUMULATION TRUST

Liquid Assets Fund
National Money Market Fund

PRUDENTIAL GOVERNMENT SECURITIES TRUST

Money Market Series
U.S. Treasury Money Market Series

PRUDENTIAL SPECIAL MONEY MARKET
FUND, INC.

Money Market Series

PRUDENTIAL MONEYMART ASSETS, INC.

TAX-FREE MONEY MARKET FUNDS

PRUDENTIAL TAX-FREE MONEY FUND, INC.

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

COMMAND FUNDS

COMMAND MONEY FUND

COMMAND GOVERNMENT FUND

COMMAND TAX-FREE FUND

INSTITUTIONAL MONEY MARKET FUNDS

PRUDENTIAL INSTITUTIONAL LIQUIDITY PORTFOLIO, INC.

Institutional Money Market Series

<PAGE>

FOR MORE INFORMATION
- --------------------------------------------------------------------------------

Please read this prospectus before you invest in
the Fund and keep it for future reference. For
information or shareholder questions contact:

PRUDENTIAL MUTUAL FUND SERVICES LLC
P.O. BOX 15005
NEW BRUNSWICK, NJ 08906-5005
(800) 225-1852
(732) 417-7555
(if calling from outside the U.S.)

- --------------------------------------
Brokers Should Contact:
PRUDENTIAL INVESTMENT MANAGEMENT
SERVICES LLC
P.O. BOX 15035
NEW BRUNSWICK, NJ 08906-5035
(800) 225-1852

- --------------------------------------
Visit Prudential's Web Site At:
HTTP://WWW.PRUDENTIAL.COM

- --------------------------------------
Additional information about the Fund can be
obtained without charge and can be found in the
following documents:

STATEMENT OF ADDITIONAL
INFORMATION (SAI)
(incorporated by reference into
this prospectus)

ANNUAL REPORT

SEMI-ANNUAL REPORT

MF108A

You can also obtain copies of Fund documents from
the Securities and Exchange Commission as follows:

By Mail:
Securities and Exchange Commission
Public Reference Section
Washington, DC 20549-6009
(The SEC charges a fee to copy documents.)
In Person:
Public Reference Room in Washington, DC
(For hours of operation, call 1(800) SEC-0330)
Via the Internet: http://www.sec.gov

- --------------------------------------
CUSIP Numbers:
Class A Shares--74435H-10-2
Class Z Shares--74435H-20-1
Investment Company Act File No:
811-2619

<PAGE>

PRUDENTIAL MONEYMART ASSETS, INC.

Statement of Additional Information
Dated March 1, 1999

Prudential MoneyMart Assets, Inc. (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 "How the Fund Invests" in the Fund's Prospectus and
"Description of the Fund, its Investments and Risks."

The Fund's address is Gateway Center Three, 100 Mulberry Street, Newark,
New Jersey 07102-4077, and its telephone number is (800) 225-1852.

This Statement of Additional Information sets forth information about the
Fund. This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Fund's Prospectus, dated March 1, 1999, a copy of
which may be obtained from the Fund upon request at the address or telephone
number noted above.

TABLE OF CONTENTS

CROSS-REFERENCE
TO PAGE IN THE
PAGE PROSPECTUS
---- ---------------
Fund History ......................................... B-2
Description of the Fund, its Investments and Risks ... B-2
Investment Restrictions .............................. B-4
Management of the Fund ............................... B-6
Control Persons and Principal Holders of Securities .. B-9
Investment Advisory and Other Services ............... B-9
Brokerage Allocation and Other Practices ............. B-12
Securities and Organization .......................... B-13
Purchase, Redemption and Pricing of Fund Shares ...... B-13
Net Asset Value ...................................... B-15
Taxes, Dividends and Distributions ................... B-15
Calculation of Yield ................................. B-16
Financial Statements ................................. B-17 --
Reports of Independent Accountants ................... -- --
Appendix I--Description of Ratings ................... I-1 --
Appendix II--Information Relating to Prudential ...... II-1 --

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

<PAGE>

FUND HISTORY

The Fund was organized as a corporation under the laws of Maryland on
December 22, 1975.

DESCRIPTION OF THE FUND, ITS INVESTMENTS AND RISKS

(a) CLASSIFICATION. The Fund is a diversified open-end management
investment company.

(b) INVESTMENT STRATEGIES AND RISKS.

The Fund's investment objective is maximum current income consistent with
stability of capital and the maintenance of liquidity. While the principal
investment policies and strategies for seeking to achieve this objective are
described in the Fund's Prospectus, the Fund may from time to time also utilize
the securities, instruments, policies and strategies described below in seeking
to achieve its objective. The Fund may not be successful in achieving its
objective and you can lose money.

OBLIGATIONS ISSUED OR GUARANTEED BY THE U.S. GOVERNMENT, ITS AGENCIES AND
INSTRUMENTALITIES

Obligations issued or guaranteed as to principal and interest by the U.S.
Government may be acquired by the Fund in the form of custodial receipts that
evidence ownership of future interest payments, principal payments or both on
certain United States Treasury notes or bonds. Such notes and bonds are held in
custody by a bank on behalf of the owners. These custodial receipts are known by
various names, including "Treasury Receipts," "Treasury Investment Growth
Receipts" (TIGRs) and "Certificates of Accrual on Treasury Securities" (CATS).
The Fund does not intend to purchase TIGRs or CATS during the coming year.

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 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.

DEMAND FEATURES AND GUARANTEES

The Fund may purchase demand features and guarantees. A demand feature
supporting a money market fund instrument can be relied upon in a number of
respects. First, the demand feature can be relied upon to shorten the maturity
of the underlying instrument. Second, the demand feature, if unconditional, can
be used to evaluate the credit quality of the underlying security. This means
that the credit quality of the underlying security can be based solely on the
credit quality of the unconditional demand feature supporting that security.

A guarantee is a form of unconditional credit support that may include bond
insurance, a letter of credit, and an unconditional demand feature. A money
market fund holding a security subject to a guarantee may determine the credit
quality of the underlying security solely on the basis of the credit quality of
the supporting guarantee.

The Fund can invest 10% of its total assets in securities directly issued
by, or supported by, a demand feature provider or guarantor. Investment Company
Act Rule 2a-7 provides a more stringent limit on demand features and guarantees
that are "second tier securities" under the Rule; that is, those securities that
are rated in the second highest category by a specified number of rating
organizations. Specifically, Rule 2a-7 provides that a money market fund cannot
invest more than 5% of its total assets in securities directly issued by, or
supported by, second tier demand features or guarantees that are issued by the
institution that issued such second tier securities.

LENDING OF SECURITIES

Consistent with applicable regulatory requirements, the Fund may lend its
portfolio to brokers, dealers and financial institutions, provided that
outstanding loans for the Fund do not exceed in the aggregate 10% of the value
of the Fund's total assets and, provided that such loans are callable at any
time by the Fund and are at all times secured by cash or U.S. Government
securities that is equal to at least the market value, determined daily, of the
loaned securities. The advantage of such loans is that the Fund continues to
receive payments in lieu of the interest on the loaned securities, while at the
same time earning interest either directly from the borrower or on the
collateral which will be invested in short-term obligations. Any voting rights,
or rights to consent, relating to the securities loaned pass to the borrower.
However, if a material event affecting the investment occurs, such loans will be
called so that the loaned securities may be voted by the Fund.

B-2

<PAGE>

A loan may be terminated by the borrower on one business day's notice or by
the Fund at any time. If the borrower fails to maintain the requisite amount of
collateral, the loan automatically terminates, and the Fund could use the
collateral to replace the securities while holding the borrower liable for any
excess of replacement cost over collateral. As with any extensions of credit,
there are risks of delay in recovery and in some cases loss of rights in the
collateral should the borrower of the securities fail financially. However,
these loans of portfolio securities will only be made to firms determined to be
creditworthy pursuant to procedures approved by the Board of Directors of the
Fund. On termination of the loan, the borrower is required to return the
securities to the Fund, and any gain or loss in the market price during the loan
would inure to the Fund.

The Fund will pay reasonable finders', administrative and custodial fees in
connection with a loan of its securities or may share the interest earned on
collateral with the borrower.

ILLIQUID SECURITIES

The Fund may not hold 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 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
securities.

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 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 (NRSROs), 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.

BORROWING

The Fund may borrow from banks (including through entering into reverse
repurchase agreements) up to and including 10% of the value of its net assets
taken at cost for temporary or emergency purposes. The Fund may pledge up to and
including 15% of its net assets to secure such borrowings. The Fund will not
purchase portfolio securities if its borrowings (other than permissible
securities loans) exceed 5% of its total assets.

REPURCHASE AGREEMENTS

The Fund may purchase securities and concurrently enter into "repurchase
agreements" with the seller, whereby the seller agrees to repurchase such
securities at a specified price within a specified time (generally seven days or
less). The repurchase

B-3

<PAGE>

agreements provide that the Fund will sell the underlying instruments back to
the dealer or the bank at the specified price and at a fixed time in the future,
usually not more than seven days from the date of purchase. The difference
between the purchase price and the resale price represents the interest earned
by the Fund, which is unrelated to the coupon rate or maturity of the purchased
security. Repurchase agreements will at all times be fully collateralized in an
amount at least equal to the resale price. Such collateral will be held by the
Custodian, directly or through a sub-custodian, and will be maintained
physically or in a book-entry account.

The Fund will enter into repurchase transactions only with parties which
meet creditworthiness standards approved by the Fund's Board of Directors. The
Fund's investment adviser monitors the creditworthiness of such parties under
the general supervision of the Board of Directors. In the event of a default or
bankruptcy by a seller, the Fund will promptly seek to liquidate the collateral.
To the extent that the proceeds limit any sale of such collateral upon a default
in the obligation to repurchase are less than the resale price, the Fund will
suffer a loss, if the financial institution that is a party to the repurchase
agreement petitions for bankruptcy or becomes subject to the U.S. Bankruptcy
Code, the law regarding the rights of the trust is unsettled. As a result, under
these circumstances, there may be a restriction on the Fund's ability to sell
the collateral, and the Fund could suffer a loss.

The Fund participates in a joint repurchase account with other investment
companies managed by Prudential Investments Fund Management LLC (PIFM or the
Manager) pursuant to an order of the Securities and Exchange Commission. On a
daily basis, any uninvested cash balances of the Fund may be aggregated with
those of such other investment companies and invested in one or more repurchase
agreements. The Fund participates in the income earned or accrued in the joint
account based on the percentage of its investment. In connection with
transactions in repurchase agreements with U.S. financial institutions, it is
the Fund's policy that its custodian or designated subcustodians, as the case
may be, under triparty repurchase agreements, take possession of the underlying
collateral securities, the value of which equals or exceeds the resale price of
the agreement. If the seller defaults and the value of the collateral declines
or if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or limited.

REVERSE REPURCHASE AGREEMENTS

Reverse repurchase agreements have the characteristics of borrowing and
involve the sale of securities held by the Fund with an agreement to repurchase
the securities at a specified price, date and interest payment. The Fund intends
only to use the reverse repurchase technique when it will be to its advantage to
do so. These transactions are only advantageous if the Fund has an opportunity
to earn a greater rate of interest on the cash derived from the transaction than
the interest cost of obtaining that cash. The Fund may be unable to realize
earnings from the use of the proceeds equal to or greater than the interest
required to be paid. The use of reverse repurchase agreements may exaggerate any
increase or decrease in the value of the Fund's portfolio. The Fund's Custodian
will maintain in a segregated account cash, or other liquid assets, maturing not
later than the expiration of the reverse repurchase agreements and having a
value equal to or greater than such commitments.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

The Fund may purchase securities on a "when-issued" or delayed delivery
basis. When-issued or delayed delivery transactions arise when securities are
purchased or sold by the Fund with payment and delivery taking place in the
future in order to secure what is considered to be an advantageous price and
yield to the Fund at the time of entering into the transaction. The Fund will
limit such purchases to those in which the date of delivery and payment falls
within 90 days of the date of the commitment. The Fund will make commitments for
such when-issued transactions only with the intention of actually acquiring the
securities. The Fund's Custodian will segregate cash or other liquid assets
having a value equal to or greater than the Fund's purchase commitments. If the
Fund chooses to dispose of the right to acquire a when-issued security prior to
its acquisition, it could, as with the disposition of any other portfolio
security, incur a gain or loss due to market fluctuations. The securities so
purchased are subject to market fluctuation and no interest accrues to the
purchaser during the period between purchase and settlement.

INVESTMENT RESTRICTIONS

The following restrictions are fundamental policies. Fundamental policies
are those which cannot be changed without the approval of the holders of a
majority of the outstanding voting securities of the Fund. A "majority of the
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. With respect to the submission of a change in fundamental policy or
investment objective of the Fund, such matters shall be deemed to have been
effectively acted upon with respect to the Fund if a majority of the outstanding
voting securities of the Fund votes for the approval of such matters as provided
above.

B-4

<PAGE>

The following investment restriction are fundamental policies of the Fund
and may not be changed except as described above.

The Fund may not:

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 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.

B-5
<PAGE>

MANAGEMENT OF THE FUND
(A) DIRECTORS

The Fund has Directors who, in addition to overseeing the actions of the
Fund's Manager, Subadviser, and Distributor, decide upon matters of general
policy.

The Directors also review the actions of the officers of the Fund, who
conduct and supervise the daily business operations of the Fund.

<TABLE>
<CAPTION>
(B) MANAGEMENT INFORMATION--DIRECTORS AND OFFICERS

POSITION WITH
NAME, ADDRESS AND AGE (1) THE FUND PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS FOR THE LAST FIVE YEARS
- ------------------------- ------------- --------------------------------------------------------------------
<S> <C> <C>
Edward D. Beach (73) Director President and Director of BMC Fund, Inc., a closed-end investment
company; previously, Vice Chairman of Broyhill Furniture
Industries, Inc.; Certified Public Accountant; Secretary and
Treasurer of Broyhill Family Foundation, Inc.; Member of the
Board of Trustees of Mars Hill College; and Director of The High
Yield Income Fund, Inc.

Delayne Dedrick Gold (59) Director Marketing and Management Consultant; Director of The High Yield
Income Fund, Inc.

* Robert F. Gunia (51) Director Vice President of Prudential Investments (since September 1997);
Executive Vice President and Treasurer (since December 1996) of
Prudential Investments Fund Management LLC (PIFM); Senior Vice
President (since March 1987) of Prudential Securities
Incorporated (Prudential Securities); formerly Chief
Administrative Officer (July 1990-September 1996), Director
(January 1989-September 1996), and Executive Vice President,
Treasurer and Chief Financial Officer (June 1987-September 1996)
of Prudential Mutual Fund Management, Inc. (PMF); Vice President
and Director (since May 1989) of The Asia Pacific Fund, Inc.;
Director of The High Yield Income Fund, Inc.

Don G. Hoff (62) Director Chairman and Chief Executive Officer (since 1980) of Intertec, Inc.
(investments); Chairman and Chief Executive Officer of The Lamaur
Corporation, Inc.; Director of Innovative Capital Management,
Inc. and The Greater China Fund, Inc; and Chairman and Director
of The Asia Pacific Fund, Inc.

Robert E. LaBlanc (63) Director President (since 1981) of Robert E. LaBlanc Associates, Inc.
(telecommunications); formerly General Partner at Salomon
Brothers and Vice-Chairman of Continental Telecom; Director of
Storage Technology Corporation, Titan Corporation, Salient 3
Communications, Inc. and Tribune Company; and Trustee of
Manhattan College.

</TABLE>

B-6
<PAGE>

<TABLE>
<CAPTION>
POSITION WITH
NAME, ADDRESS AND AGE (1) THE FUND PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS FOR THE LAST FIVE YEARS
- ------------------------- ------------- --------------------------------------------------------------------
<S> <C> <C>
* Mendel A. Melzer, CFA (37) Director Chief Investment Officer (since October 1996) of Prudential Mutual
751 Broad Street Funds; formerly Chief Financial Officer (November 1995-September
Newark, NJ 07102 1996) of Prudential Investments; Senior Vice President and Chief
Financial Officer of Prudential Preferred Financial Services (April
1993-November 1995), Managing Director of Prudential Investment
Advisors (April 1991-April 1993) and Senior Vice President of
Prudential Capital Corporation (July 1989-April 1991); Chairman and
Director of Prudential Series Fund, Inc; and Director of The High
Yield Income Fund, Inc.

Robin B. Smith (58) Director Chairman and Chief Executive Officer (since August 1996) of
Publishers Clearing House; formerly President and Chief Executive
Officer (January 1989-August 1996) and President and Chief
Operating Officer (September 1981-December 1988) of Publishers
Clearing House; Director of BellSouth Corporation, Texaco Inc.,
Springs Industries Inc., and Kmart Corporation.

Stephen Stoneburn (54) Director President and Chief Executive Officer (since June 1996) of Quadrant
Media Corp. (a publishing company); formerly President (June
1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice
President and Managing Director (January 1993-1995) of Cowles
Business Media; Senior Vice President (January 1991-1992) and
Publishing Vice President (May 1989-December 1990) of Gralla
Publications (a division of United Newspapers, U.K.); and Senior
Vice President of Fairchild Publications, Inc.

Nancy H. Teeters (67) Director Economist; Director of Inland Steel Industries; formerly, Vice
President and Chief Economist of International Business Machines;
Member of the Board of Governors of the Federal Reserve System;
Governor of the Horace H. Rackham School of Graduate Studies of
the University of Michigan; Assistant Director of the Committee
on the Budget of the US House of Representatives; Senior Fellow at
the Library of Congress; Senior Fellow at the Brookings
Institution; staff at Office of Management and Budget, Council of
Economic Advisors and the Federal Reserve Board.

Brian M. Storms (44) Director and President, Prudential Investments (October 1998-Present); President
President Prudential Mutual Funds, Annuities, and Investment Management
Services (September 1996-October 1998); Managing Director,
Fidelity Investments Institutional Services Company, Inc. (July
1991-September 1996); President, J.K. Schofield (October
1989-September 1991); Senior Vice President, INVEST Financial
Corporation (September 1982-October 1989)

Robert C. Rosselot (38) Secretary Assistant General Counsel (since September 1997) of PIFM; formerly,
partner with the firm of Howard & Howard, Bloomfield Hills,
Michigan (December 1995-September 1997) and Corporate
Counsel, Federated Investors (1990-1995).

</TABLE>

B-7
<PAGE>

<TABLE>
<CAPTION>
POSITION WITH
NAME, ADDRESS AND AGE (1) THE TRUST PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS FOR THE LAST FIVE YEARS
- ------------------------- ------------- --------------------------------------------------------------------
<S> <C> <C>
Grace C. Torres (39) Treasurer and First Vice President (since December 1996) of PIFM; First Vice
Principal President (since March 1994) of Prudential Securities; formerly
Financial and First Vice President (March 1994-September 1996), Prudential
Accounting Mutual Fund Management, Inc. and Vice President (July 1989-March
Officer 1994) of Bankers Trust Corporation.

Stephen M. Ungerman (44) Assistant Vice President and Tax Director (since March 1996) of Prudential
Treasurer Investments; formerly First Vice President of Prudential Mutual
Fund Management, Inc. (February 1993-September 1996).
</TABLE>

- ----------
(1) Unless otherwise noted, the address for each of the above persons is c/o
Prudential Investments Fund Management LLC, Gateway Center Three, 100
Mulberry Street, Newark, New Jersey 07102-4077.

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

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.

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.

The Board of Directors has adopted a retirement policy which calls for the
retirement of Directors on December 31 of the year in which they reach the age
of 72, except that retirement is being phased in for Directors who were age 68
or older as of December 31, 1993. Under this phase-in provision, Mr. Beach is
scheduled to retire on December 31, 1999.

Pursuant to the Management Agreement with the Fund, the Manager pays all
compensation of officers and employees of the Fund as well as the fees and
expenses of all Directors of the Fund who are affiliated persons of the Manager.

The Fund pays each of its Directors who is not an affiliated person of PIFM
annual compensation of $7,000, in addition to certain out-of-pocket expenses.
The amount of compensation paid to each Director may change as a result of the
introduction of additional funds upon which the Director will be asked to serve.

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.

B-8
<PAGE>

The following table sets forth the aggregate compensation paid by the Fund
for the fiscal year ended December 31, 1998 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 funds managed by
PIFM (Fund Complex) for the calendar year ended December 31, 1998.

<TABLE>
<CAPTION>
COMPENSATION TABLE

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(2)
----------------- ------------ ---------------- -------------- ---------------

<S> <C> <C> <C> <C>
Edward D. Beach--Director $7,000 None N/A
Stephen C. Eyre--Former Director $7,000 None N/A
Delayne D. Gold--Director $7,000 None N/A
Robert F. Gunia (1)--Director -- None N/A --
Don G. Hoff--Director $7,000 None N/A
Robert F. LaBlanc--Director $7,000 None N/A
Mendel A. Melzer (1)--Director -- None N/A --
Richard A. Redeker (1)--Former Director -- None N/A --
Robin B. Smith--Director $7,000 None N/A
Stephen Stoneburn--Director $7,000 None N/A
Brian M. Storms (1)--Director and President -- None N/A --
Nancy H. Teeters--Director $7,000 None N/A

</TABLE>

- ----------

* Indicates number of funds/portfolios in Fund Complex (including the Fund) to
which aggregate compensation relates.
(1) Robert F. Gunia, Mendel A. Melzer, Richard A. Redeker, Brian M. Storms, who
are interested Directors, do not receive compensation from the Fund or any
fund in the Fund Complex.
(2) Total compensation from all of the funds in the Fund Complex for the
calendar year ended December 31, 1998, including amounts deferred at the
election of Directors under the funds' Deferred Compensation Plans.
Including accrued interest, total deferred compensation amounted to
$___________ for Robin B. Smith.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of February_____, 1999, the Directors and officers of the Fund, as a
group, beneficially owned less than 1% of the outstanding shares of Common Stock
of the Fund.

As of February_____, 1999, the beneficial owners, directly or indirectly,
of more than 5% of the outstanding common stock of the Prudential MoneyMart
Assets, Inc. were:

As of February_____, 1999, Prudential Securities held, solely of record on
behalf of other persons, _______________ Class A shares of the Fund's Common
Stock, representing approximately ____% of the Class A shares then outstanding.
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.

INVESTMENT ADVISORY AND OTHER SERVICES

(A) INVESTMENT ADVISER

The manager of the Fund is Prudential Investments Fund Management LLC (PIFM
or the Manager) (formerly, Prudential Mutual Fund Management LLC), Gateway
Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077. PIFM 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, 1999, PIFM managed and/or administered
open-end and closed-end management investment companies with assets of
approximately $_________ billion. According to the Investment Company Institute,
as of ____________, 1998, the Prudential Mutual Funds were the ___ largest
family of mutual funds in the United States.

B-9

<PAGE>

PIFM is a subsidiary of Prudential Securities Incorporated. Prudential
Mutual Fund Services LLC (PMFS or the Transfer Agent), a wholly-owned subsidiary
of PIFM and serves as the transfer agent for the Prudential Mutual Funds and, in
addition, provides customer service, recordkeeping and management and
administration services to qualified plans.

Pursuant to the Management Agreement with the Fund (the Management
Agreement), PIFM, subject to the supervision of the Fund's Board of Directors
and in conformity with the stated policies of the Fund, manages both the
investment operations of the Fund and the composition of the Fund's portfolio,
including the purchase, retention, disposition and loan of securities and other
assets. In connection therewith, PIFM is obligated to keep certain books and
records of the Fund. PIFM also administers the Fund's corporate affairs and, in
connection therewith, furnishes the Fund with office facilities, together with
those ordinary clerical and bookkeeping services which are not being furnished
by State Street Bank and Trust Company, the Fund's custodian (the Custodian),
and PMFS, the Fund's transfer and dividend disbursing agent. The management
services of PIFM for the Fund are not exclusive under the terms of the
Management Agreement and PIFM is free to, and does, render management services
to others.

For its services, PIFM receives, pursuant the Management Agreement, 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
payable to PIFM, 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 compensation due to PIFM will be reduced by the amount of such excess.
Reductions in excess of the total compensation payable to PIFM will be paid by
PIFM to the Fund. No such reductions were required during the fiscal year ended
December 31, 1998. Currently, the Fund believes that there are no such expense
limitations.

In connection with its management of the corporate affairs of the Fund
pursuant to the Management Agreement, PIFM bears the following expenses:

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

(b) all expenses incurred by PIFM 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 The Prudential Investment
Corporation, doing business as Prudential Investments (PI), pursuant to the
subadvisory agreement between PIFM and PI (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 charges and expenses of the Fund's legal counsel and independent
accountants, (e) brokerage commissions, if any, 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, including
the preparation and printing of the Fund's registration statements and
prospectuses for such purposes, and paying the fees and expenses of notice
filings made in accordance with state securities laws, (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 PIFM 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 as defined in the Investment Company
Act, 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.

B-10
<PAGE>

For the fiscal years ended December 31, 1998, 1997, and 1996, PIFM received
management fees of $________, $21,943,602 and $22,378,65, respectively.

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

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, with a 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 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, PIFM or PI upon not more than 60 days' nor less than 30
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.

(b) PRINCIPAL UNDERWRITER, DISTRIBUTOR AND RULE 12B-1 PLAN

Prudential Investment Management Services LLC (PIMS or the Distributor),
Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, acts
as the distributor of the shares of the Fund. Prior to July 1, 1998, Prudential
Securities Incorporated (Prudential Securities, also referred to as the
Distributor), One Seaport Plaza, New York, New York 10292, served as the
distributor of the Fund's shares. In January 1999, more than __% of the
outstanding voting shares of the Fund were owned by clients of Prudential
Securities.

Pursuant to the Distribution Agreement, the Fund has agreed to indemnify the
Distributor to the extent permitted by applicable law against certain
liabilities under the federal securities laws.

DISTRIBUTION PLAN

Under the Fund's Distribution Plan and the Distribution Agreement for the
Class A shares, the Fund pays the Distributor a distribution fee of up to 0.125%
of the average daily net assets of the Class A shares of the Fund, computed
daily and payable monthly, to reimburse the Distributor for distribution
expenses.

For the fiscal year ended December 31, 1998, the Distributor incurred
distribution expenses in the aggregate of $________, all of which was recovered
through the distribution fee paid by the Class A shares of the Fund.

It is estimated that the distribution expenses were spent for: (i) account
servicing fee credits to Prudential Securities branch offices for payments of
account servicing fees to account executives (___% or $______) and (ii) an
allocation of overhead and other branch office distribution-related expenses
(___% or $______). 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), an
affiliated broker-dealer, 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.

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 Plan or in any
agreement relating 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 the Rule
12b-1 Directors or by the vote of the holders of a majority of the outstanding
Class A 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 for the services described therein without
shareholder approval, and all material amendments must also be approved by the
Board of Directors in the manner described above. The Plan will automatically
terminate in the event of its assignment.

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Pursuant to the Plan, the Directors will be provided with, and will review,
at least quarterly, a written report of the distribution expenses incurred on
behalf of the Fund by the Distributor. The report will include 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 the
Distributor to the extent permitted by applicable law against certain
liabilities under the Securities Act of 1933, as amended.

NASD MAXIMUM SALES CHARGE RULE. Pursuant to rules of the NASD, the
Distributor is required to limit aggregate initial sales charges, deferred sales
charges and asset-based sales charges to 6.25% of total gross sales of the
Fund's Class A shares. Interest charges on unreimbursed distribution expenses
equal to the prime rate plus one percent per annum may be added to the 6.25%
limitation. Sales from the reinvestment of dividends and distributions are not
included in the calculation of the 6.25% limitation. The annual asset-based
sales charge on Class A shares of the Fund may not exceed .75 of 1% per class.
The 6.25% limitation applies to Class A shares rather than on a per shareholder
basis. If aggregate sales charges were to exceed 6.25% of the total gross sales
of Class A shares, all sales charges on Class A shares would be suspended.

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

Prudential Mutual Fund Services LLC (PMFS), Raritan Plaza One, Edison, New
Jersey 08837, serves as the Transfer and Shareholder Servicing Agent of the
Fund. It is a wholly-owned subsidiary of PIFM. 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. In connection with services rendered to the Fund, PMFS receives an
annual fee ($9.50) per shareholder account, a new account set up fee ($2.00) for
each manually-established account and a monthly inactive zero balance account
fee ($0.20) per shareholder account plus its out-of-pocket expenses, including
but not limited to postage, stationery, printing, allocable communications and
other costs.

PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New York
10036, serves as the Fund's independent public accountants.
PricewaterhouseCoopers LLP provides audit services, accounting assistance, and
consultation in connection with Securities and Exchange Commission filings. The
financial information for the Fund provided under "Financial Statements" for the
fiscal year ended December 31, 1998 has been audited by PricewaterhouseCoopers
LLP, whose report is also included under "Financial Statements."

BROKERAGE ALLOCATION AND OTHER PRACTICES

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 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

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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.

During the fiscal years ended December 31, 1997, 1996 and 1995, the Fund
paid no brokerage commissions.

SECURITIES AND ORGANIZATION

The Fund is authorized to issue 15 billion shares of common stock, $.001 par
value per share, divided into two classes, designated Class A and Class Z common
stock. Of the authorized shares of common stock of the Fund, 13 billion shares
consist of Class A shares and 2 billion shares consist of 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
on any 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 a limited group of investors. 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 Board
of Directors may determine. The Board of Directors may increase or decrease the
number of authorized shares without approval by shareholders. Shares of the
Fund, when issued, are fully paid, nonassessable, fully transferable and
redeemable at the option of the holder.

The Fund does not intend to hold annual meetings of shareholders unless
otherwise required by law. The Fund will not be required to hold 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% or more
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.

PURCHASE, REDEMPTION AND PRICING 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.

The Fund's shares are sold, without a sales charge, on a continuing basis on
each business day at their net asset value (NAV) next determined (see "How the
Fund Values its Shares" in the Prospectus) after a purchase order becomes
effective. Shares of the Fund may be purchased by investors through the
Distributor, by brokers that have entered its agreements to sell Fund shares, or
directly through Prudential Mutual Fund Services LLC (PMFS). Shares may also be
purchased through Prudential Securities or Pruco Securities Corporation
(Prusec). Prudential Securities clients who hold Fund shares through Prudential
Securities may benefit through administrative conveniences afforded them as
Prudential Securities clients, but may be subject to certain additional
restrictions imposed by Prudential Securities.

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.

REDEMPTION OF SHARES

Investors who purchase Class A shares directly from Prudential Mutual Fund
Services LLC (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.

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<PAGE>

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. Also, shares purchased by check are not available to
cover checks until 10 calendar days after receipt of the purchase check by PMFS.
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."
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.

PMFS reserves the right to assess a service charge 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 LLC, 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 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 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. The Fund does not forward redemption proceeds
with respect to shares purchased by check until at least 10 calendar days after
receipt of the purchase check by PMFS.

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 LLC, at the
address set forth above.

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 and on the certificates, if any, or stock power 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. Signature
guarantees by savings banks, savings and loan associations and notaries will not
be accepted. PMFS may request further documentation from corporations,
executors, administrators, trustees or guardians. 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.

REGULAR REDEMPTION. Shareholders may redeem their shares by sending to PMFS,
at the address set forth above, a written request, accompanied by duly endorsed
stock certificates, if issued. All written requests for redemption, and any
share certificates, must be endorsed by the shareholder with signature
guaranteed, as described above under "Expedited Redemption." PMFS may request
further documentation from corporations, executors, administrators, trustees or
guardians. Redemption proceeds are sent to a shareholder's address by check.

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

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<PAGE>

RESTRICTIONS ON SALE

The Fund may suspend the right of redemption or postpone the date of payment
for a period of up to seven days. Suspensions or postponements may not exceed
seven days except (1) for any period (a) during which the New York Stock
Exchange is closed other than customary weekend and holiday closings or (b)
during which trading on the New York Stock Exchange is restricted; (2) for any
period during which an emergency exists as a result of which (a) disposal by the
Fund of securities owned by it is not reasonably practicable or (b) it is not
reasonably practicable for the Fund fairly to determine the value of its net
assets; or (3) for such other periods as the SEC may by order permit for the
protection of shareholders of the Fund. The SEC by rules and regulations
determines the conditions under which (i) trading shall be deemed to be
restricted and (ii) an emergency is deemed to exist within the meaning of clause
(2) above.

NET ASSET VALUE

The Fund's net asset value per share is determine by subtracting its
liabilities from the value of its assets and dividing the remainder by the
number of outstanding shares.

The Fund uses the amortized cost method of valuation to determined 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 investment
adviser under the supervision of the Board of Directors to be of minimal credit
risk and to be of "eligible quality" in accordance with regulations of the SEC.
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 a 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.

The Fund computes its net asset value at 4:30 PM New York time, on each day
the New York Stock Exchange (the Exchange) is open for trading. In the event the
New York Stock Exchange closes early on any business day, the net asset value of
the Fund's shares shall be determined at a time between such closing and 4:30 PM
New York time. The Exchange is closed on the following holidays: New Year's Day,
Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

TAXES, DIVIDENDS AND DISTRIBUTIONS

The Fund has elected to qualify, and the Fund intends to remain qualified,
as a regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended. This relieves a fund (but not its shareholders) from
paying federal income tax on income which is distributed to shareholders, and,
if a fund did realize long-term capital gains, permits net capital gains 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 that fund.

Qualification as a regulated investment company requires, among other
things, that (a) at least 90% of a fund's annual gross income (without reduction
for losses from the sale or other disposition of securities or foreign
currencies) be derived from interest, dividends, payments with respect to
securities loans, and gains from the sale or other disposition of securities or
options thereon, or other income (including, but not limited to, gains from
options) derived with respect to its business of investing in such securities;
(b) a fund must diversify its holdings so that, at the end of each quarter of
the taxable year, (i) at least 50% of the market value of a fund's assets is
represented by cash, U.S. Government obligations and other securities limited in
respect of any one issuer to an amount not greater than 5% of the market value
of the fund's assets 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 obligations) and (c)
the fund must distribute to its shareholders at least 90% of its net investment
income and net short-term gains (i.e., the excess of net short-term capital
gains over net long-term capital losses) in each year.

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. The Fund does not anticipate realizing long-term capital
gains or losses. Other gains or losses on the

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<PAGE>

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. For purposes of this excise tax, income on which the Fund pays income
tax is treated as distributed. The Fund intends to make timely distributions in
order to avoid this excise tax. For this purpose, dividends declared in October,
November and December payable to shareholders of record on a specified date in
October, November and December and paid in the following January will be treated
as having been received by shareholders on December 31 of the calendar year in
which declared. Under this rule, therefore, a shareholder may be taxed in the
prior year on dividends or distributions actually received in January of the
following year.

It is anticipated that the net asset value per share of the Fund will
remain constant. However, if the net asset value per share fluctuates, a
shareholder may realize gain or loss upon the disposition of a share.
Distributions of net investment income and net short-term gains will be taxable
to the shareholder at ordinary income rates regardless of whether the
shareholder receives such distributions in additional shares or cash. Any gain
or loss realized upon a sale or redemption of shares by a shareholder who is not
a dealer in securities will generally be treated as long-term capital gain or
loss if the shares have been held for more than one year and otherwise as
short-term capital gain or loss. Any such loss, however, although otherwise
treated as short-term capital loss, will be long-term capital loss to the extent
of any capital gain distributions received by the shareholder, if the shares
have been held for six months or less. Furthermore, certain rules may apply
which would limit the ability of the shareholder to recognize any loss if, for
example, the shareholder replaced the shares within 30 days of the disposition
of the shares. 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.

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.

CALCULATION OF YIELD

The Fund will prepare a current quotation of yield daily. 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 shares, but excluding any capital changes, divided by the value
of the account at the beginning of the base period. 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 also may 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.

Effective yield = [(base period return + 1)365/7]-1

The yield and effective yield for Class A shares of the Fund based on the 7
days ended December 31, 1998 were __% and __%, respectively. The yield and
effective yield for Class Z shares of the Fund based on 7 days ended December
31, 1998 were __% and __%, respectively.

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 Financial Data,
Inc., The Bank Rate Monitor, other industry publication, business periodicals
and market indices.

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 a Fund is
held, but also in changes in the Fund's expenses. Yield does not take into
account any federal or state income taxes.

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<PAGE>

APPENDIX I
DESCRIPTION OF RATINGS

BOND RATINGS

Moody's Investors Service, Inc.--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 S&P. 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.

Fitch IBCA--The following summarizes the ratings used by Fitch IBCA for
long-term debt:

"AAA": Highest credit quality. "AAA" ratings denote the lowest
expectation of credit risk. They are assigned only in case of exceptionally
strong capacity for timely payment of financial commitments. This capacity
is highly unlikely to be adversely affected by foreseeable events.

"AA": Very high credit quality. "AA" ratings denote a very low
expectation of credit risk. They indicate very strong capacity for timely
payment of financial commitments. This capacity is not significantly
vulnerable to foreseeable events.

"A": High credit quality. "A" ratings denote a low expectation of
credit risk. The capacity for timely payment of financial commitments is
considered strong. This capacity may, nevertheless, be more vulnerable to
changes in circumstances or in economic conditions than is the case for
higher ratings.

"BBB": Good credit quality. "BBB" ratings indicate that there is
currently a low expectation of credit risk. The capacity for timely payment
of financial commitments is considered adequate, but adverse changes in
circumstances and in economic conditions are more likely to impair this
capacity. This is the lowest investment grade category.

"+" or "-" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to the "AAA" long-term rating
category or to categories below "CCC".

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 supporting institutions) have a

I-1

<PAGE>

superior ability for repayment of senior short-term debt obligations. Issuers
rated "Prime-2" (or supporting institutions) have a strong ability for repayment
of senior short-term debt obligations. Issuers rated "Prime-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.

D-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.

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

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

D-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.

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

The following summarizes the ratings used by Fitch IBCA for short-term
debt, which apply to most obligations with maturities of less than 12 months, or
up to three years for U.S. public finance securities:

"F1": Highest credit quality. Indicates the strongest capacity for
timely payment of financial commitments; may have an added "+" to denote
any exceptionally strong credit feature.

"F2": Good credit quality. A satisfactory capacity for timely payment
of financial commitments, but the margin of safety is not as great as in
the case of the higher ratings.

"F3": Fair credit quality. The capacity for timely payment of
financial commitments is adequate, however, near-term adverse changes could
result in a reduction to non-investment grade.

"B": Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in financial
and economic conditions.

"C": High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a sustained, favorable
business and economic environment.

"D": Default. Denotes actual or imminent payment default.

"+" or "-" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to short-term ratings other than
"F1".

I-2

<PAGE>

APPENDIX II

INFORMATION RELATING TO PRUDENTIAL

Set forth below is information relating to The Prudential Insurance Company
of America (Prudential) and its subsidiaries as well as information relating to
the Prudential Mutual Funds. See "How the Fund is Managed--Manager" in the
Prospectus. The data will be used in sales materials relating to the Prudential
Mutual Funds. Unless otherwise indicated, the information is as of December 31,
1996 and is subject to change thereafter. All information relies on data
provided by The Prudential Investment Corporation (PlC) or from other sources
believed by the Manager to be reliable. Such information has not been verified
by the Fund.

INFORMATION ABOUT PRUDENTIAL

The Manager and PlC(1) are subsidiaries of Prudential, which 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
31,1996. Principal products and services include life and health insurance,
other healthcare products, property and casualty insurance, securities
brokerage, asset management, investment advisory services and real estate
brokerage. Prudential (together with its subsidiaries) employs almost 81,000
persons worldwide, and maintains a sales force of approximately 11,500 agents
and nearly 6,400 financial advisors. 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. Prudential
uses the Rock of Gibraltar as its symbol. The Prudential rock is a recognized
brand name throughout the world.

INSURANCE. Prudential has been engaged in the insurance business since
1875. It insures or provides financial services to nearly 50 million people
worldwide. Long one of the largest issuers of individual life insurance, the
Prudential has 22 million life insurance policies in force today with a face
value of $1 trillion. Prudential has the largest capital base ($12.1 billion) of
any life insurance company in the United States. Prudential provides auto
insurance for approximately 1.6 million cars and insures approximately 1.2
million homes.

MONEY MANAGEMENT. Prudential is one of the largest pension fund managers in
the country, providing pension services to 1 in 3 Fortune 500 firms. It manages
$36 billion of individual retirement plan assets, such as 401(k) plans. As of
December 31,1996, Prudential had more than $332 billion in assets under
management. Prudential Investments, a business group of Prudential (of which
Prudential Mutual Funds is a key part), manages over $211 billion in assets of
institutions and individuals. In Pensions & Investments, May 12, 1997,
Prudential was ranked third in terms of total assets under management.

REAL ESTATE. 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.(2)

HEALTHCARE. Over two decades ago, the Prudential introduced the first
federally-funded, for-profit HMO in the country. Today, approximately 4.6
million Americans receive healthcare from a Prudential managed care membership.

FINANCIAL SERVICES. The Prudential Bank, a wholly-owned subsidiary of
Prudential, has over $1 billion in assets and serves nearly 1.5 million
customers across 50 states.

INFORMATION ABOUT THE PRUDENTIAL MUTUAL FUNDS

As of December 31, 1997, Prudential Investments Fund Management LLC is the
eighteenth largest mutual fund company in the country, with over 2.5 million
shareholders invested in more than 50 mutual fund portfolios and variable
annuities with more than 3.7 million shareholder accounts.

The Prudential Mutual Funds have over 30 portfolio managers who manage over
$55 billion in mutual fund and variable annuity assets. Some of Prudential's
portfolio managers have over 20 years of experience managing investment
portfolios.

- ----------

(1) Prudential Investments, a business group of PIC, serves as the subadviser
to substantially all of the Prudential Mutual Funds. Wellington Management
Company serves as the subadviser to Global Utility Fund, Inc.,
Nicholas-Applegate Capital Management as the subadviser to
Nicholas-Applegate Fund, Inc., Jennison Associates Capital Corp. as the
subadviser to Prudential Jennison Series Fund, Inc. and Prudential Active
Balanced Fund, a portfolio of Prudential Dryden Fund and Mercator Asset
Management L.P. as the subadviser to International Stock Series is a
portfolio of Prudential World Fund, Inc. and BlackRock Financial Management
Inc. as subadviser to The BlackRock Government Income Trust. There are
multiple subadvisers for The Target Portfolio Trust.

(2) As of December 31, 1996.

II-1

<PAGE>

From time to time, there may be media coverage of portfolio managers and
other investment professionals associated with the Manager and the Subadviser in
national and regional publications, on television and in other media.
Additionally, individual mutual fund portfolios are frequently cited in surveys
conducted by national and regional publications and media organizations such as
The Wall Street Journal, The New York Times, Barron's and USA Today.

EQUITY FUNDS. Forbes magazine listed Prudential Equity Fund among twenty
mutual funds on its Honor Roll in its mutual fund issue of August 28,1995.
Honorees are chosen annually among mutual funds (excluding sector funds) which
are open to new investors and have had the same management for at least five
years. Forbes considers, among other criteria, the total return of a mutual fund
in both bull and bear markets as well as a fund's risk profile. Prudential
Equity Fund is managed with a "value" investment style by PlC. In 1995,
Prudential Securities introduced Prudential Jennison Growth Fund, a growth-style
equity fund managed by Jennison Associates Capital Corp., a premier
institutional equity manager and a subsidiary of Prudential.

HIGH YIELD FUNDS. Investing in high yield bonds is a complex and research
intensive pursuit. A separate team of high yield bond analysts monitor
approximately 167 issues held in the Prudential High Yield Fund (currently the
largest fund of its kind in the country) along with 100 or so other high yield
bonds, which may be considered for purchase.(3) Non-investment grade bonds, also
known as junk bonds or high yield bonds, are subject to a greater risk of loss
of principal and interest including default risk than higher-rated bonds.
Prudential high yield portfolio managers and analysts meet face-to-face with
almost every bond issuer in the High Yield Fund's portfolio annually, and have
additional telephone contact throughout the year.

Prudential's portfolio managers are supported by a large and sophisticated
research organization. Fourteen investment grade bond analysts monitor the
financial viability of approximately 1,750 different bond issuers in the
investment grade corporate and municipal bond markets--from IBM to small
municipalities, such as Rockaway Township, New Jersey. These analysts consider,
among other things, sinking fund provisions and interest coverage ratios.

Prudential's portfolio managers and analysts receive research services from
almost 200 brokers and market service vendors. They also receive nearly 100
trade publications and newspapers--from Pulp and Paper Forecaster to Women's
Wear Daily--to keep them informed of the industries they follow.

Prudential Mutual Funds' traders scan over 100 computer monitors to collect
detailed information on which to trade. From natural gas prices in the Rocky
Mountains to the results of local municipal elections, a Prudential portfolio
manager or trader is able to monitor it if it's important to a Prudential Mutual
Fund.

Prudential Mutual Funds trade approximately $31 billion in U.S. and foreign
government securities a year. PlC seeks information from government policy
makers. In 1995, Prudential's portfolio managers met with several senior U.S.
and foreign government officials, on issues ranging from economic conditions in
foreign countries to the viability of index-linked securities in the United
States.

Prudential Mutual Funds' portfolio managers and analysts met with over
1,200 companies in 1995, often with the Chief Executive Officer (CEO) or Chief
Financial Officer (CFO). They also attended over 250 industry conferences.

Prudential Mutual Funds' global equity managers conducted many of their
visits overseas, often holding private meetings with a company in a foreign
language (our global equity managers speak 7 different languages, including
Mandarin Chinese).

TRADING DATA.(4) On an average day, Prudential Mutual Funds' U.S. and
foreign equity trading desks traded $77 million in securities representing over
3.8 million shares with nearly 200 different firms. Prudential Mutual Funds'
bond trading desks traded $157 million in government and corporate bonds on an
average day. That represents more in daily trading than most bond funds tracked
by Lipper even have in assets.(5) Prudential Mutual Funds' money market desk
traded $3.2 billion in money market securities on an average day, or over $800
billion a year. They made a trade every 3 minutes of every trading day. In 1994,
the Prudential Mutual Funds effected more than 40,000 trades in money market
securities and held on average $20 billion of money market securities.(6)

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

(3) As of December 31,1995. The number of bonds and the size of the Fund are
subject to change.

(4) Trading data represents average daily transactions for portfolios of the
Prudential Mutual Funds for which PlC serves as the subadviser, portfolios
of the Prudential Series Fund and institutional and non-U.S.. accounts
managed by Prudential Mutual Fund Management LLC, a division of PlC, for
the year ended December 31, 1995.

(5) Based on 669 funds in Lipper Analytical Services categories of Short U.S.
Treasury, Short U.S. Government, Intermediate U.S. Treasury, IntermedIate
U.S. Government, Short Investment Grade Debt, Intermediate Investment Grade
Debt, General U.S. Treasury, General U.S. Government and Mortgage funds.

(6) As of December 31, 1994.

II-2

<PAGE>

Based on complex-wide data, on an average day, over 7,250 shareholders
telephoned Prudential Mutual Fund Services LLC, 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
answered.

INFORMATION ABOUT PRUDENTIAL SECURITIES

Prudential Securities is the fifth largest retail brokerage firm in the
United States with approximately 6,000 financial advisors. It offers to its
clients a wide range of products, including Prudential Mutual Funds and
Annuities. As of December 31, 1997, assets held by Prudential Securities for its
clients approximated $235 billion.

During 1997, approximately 29,000 new customer accounts were opened each
month at PSl.(7)

Prudential Securities has a two-year Financial Advisor training program
plus advanced education programs, including Prudential Securities "university,"
which provides advanced education in a wide array of investment areas.
Prudential Securities is the only Wall Street firm to have its own in-house
Certified Financial Planner (CFP) program. In the December 1995 issue of
Registered Rep, an industry publication, Prudential Securities Financial Advisor
Training program, received a grade of A- (compared to an industry average of
B+).

In 1995, Prudential Securities' equity research team ranked 8th in
Institutional Investor magazine's 1995 "All America Research Team" survey. Three
Prudential Securities analysts were ranked as first-team finishers.(8)

In addition to training, Prudential Securities provides its financial
advisors with access to firm economists and market analysts. It has also
developed proprietary tools for use by financial advisors, Including the
Financial Architect, a state-of-the-art asset allocation software program which
helps Financial Advisors to evaluate a client's objectives and overall financial
plan, and a comprehensive mutual fund information and analysis system that
compares different mutual funds.

Standard & Poor's rates Prudential Securities Incorporated BBB+ with a
"Stable Outlook."

For more complete information about any of the Prudential Mutual Funds,
including charges and expenses, call your Prudential Securities financial
adviser or Pruco/Prudential representative for a free prospectus. Read it
carefully before you invest or send money.

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

(7) As of December 31, 1997.

(8) On an annual basis, Institutional Investor magazine surveys more than 700
institutional money managers, chief investment officers and research
directors, asking them to evaluate analysts In 76 industry sectors. Scores
are produced by taking the number of votes awarded to an individual analyst
and weighing them based on the size of the voting institution. In total,
the magazine sends its survey to approximately 2,000 institutions and a
group of European and Asian institutions.

II-3

<PAGE>
PART C
OTHER INFORMATION

ITEM 23. EXHIBITS

(a) Articles of Restatement of Articles of Incorporation, incorporated
by reference to Exhibit 1 to Post-Effective Amendment No. 33 to the
Registration Statement on Form N-1A (2-55301) filed via EDGAR on
February 27, 1997.

(b) By-Laws, incorporated by reference to Exhibit 2 to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.

(c) (i) Form of stock certificate, incorporated by reference to Exhibit
4(a) to Post-Effective Amendment No. 33 to the Registration
Statement on Form N-1A (2-55301) filed via EDGAR on February 27,
1997.

(ii) Instruments defining rights of shareholders incorporated by
reference to Exhibits a and b.

(d) (i) Management Agreement between the Registrant and Prudential
Mutual Fund Management, incorporated by reference to Exhibit 5(a) to
Post-Effective Amendment No. 33 to the Registration Statement on
Form N-1A (2-55301) filed via EDGAR on February 27, 1997.

(ii) Subadvisory Agreement between Prudential Mutual Fund Management and
The Prudential Investment Corporation, incorporated by reference to
Exhibit 5(b) to Post-Effective Amendment No. 33 to the Registration
Statement on Form N-1A (2-55301) filed via EDGAR on February 27,
1997.

(e) Distribution Agreement, incorporated by reference to Exhibit 6 to
Post-Effective Amendment No. 33 to the Registration Statement on
Form N-1A (2-55301) filed via EDGAR on February 27, 1997.

(f) Not applicable.

(g) Custodian Contract with State Street Bank and Trust Company,
incorporated by reference to Exhibit 8 to Post-Effective Amendment
No. 33 to the Registration Statement on Form N-1A (2-55301) filed
via EDGAR on February 27, 1997.

(h) (I)Transfer Agency and Service Agreement, incorporated by reference
to Exhibit 9 to Post-Effective Amendment No. 33 to the Registration
Statement on Form N-1A (2-55301) filed via EDGAR on February 27,
1997.

(i) Opinion and Consent of Gardner, Carton & Douglas regarding legality
of the securities being registered, incorporated by reference to
Exhibit 10(b) to Post-Effective Amendment No. 27 to the Registration
Statement on Form N-1A (2-55301), filed via EDGAR herewith.*

(j) Consent of Independent Accountants.**

(k) Not applicable.

(l) Not Applicable.

(m) Distribution and Service Plan of Registrant incorporated by
reference to Exhibit No. 15(b) to Post-Effective Amendment No. 28 on
Form N-1A (2-55301) filed via EDGAR on February 17, 1994.

(n) Financial Data Schedules filed for electronic purposes as Exhibit
27*

(o) Rule 18f-3 Plan, incorporated by reference to Exhibit No. 18 to
Post-Effective Amendment No. 30 to the Registration Statement on
Form N-1A (2-55301) filed via EDGAR on October 31, 1995.

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

* Filed herewith.
** To be filed by amendment.

C-1

<PAGE>

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

None.

ITEM 25. INDEMNIFICATION.

As permitted by Sections 17(h) and 17(i) of the Investment Company Act of
1940, as amended (the 1940 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 1940 Act, pursuant to Section 9 of the
Distribution Agreements (Exhibit (e) to the Registration Statement), Prudential
Securities Incorporated, 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, as amended (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 of 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 (d)(i) to the Registration
Statement) limits the liability of Prudential Investments Fund Management LLC
(PIFM) 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 Subadvisory Agreement (Exhibit (d)(ii) 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 1940 Act so long as the interpretation of Sections 17(h)
and 17(i) of such Act remains 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 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

(i) Prudential Investments Fund Management LLC (PIFM).

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

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

The business and other connections of the directors and officers of PIFM are
set forth below. Except as otherwise indicated, the address of each person is
Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077.

C-2

<PAGE>

NAME AND ADDRESS POSITION WITH PIFM PRINCIPAL OCCUPATIONS
- ---------------- ------------------ ---------------------

<S> <C> <C>
Brian Storms Officer-in Charge, President, Prudential Mutual Funds & Annuities (PMF&A);
President, Chief Executive Officer-in-Charge, President, Chief Executive Officer and
Officer and Chief Chief Operating Officer; PIFM
Operating Officer

Frank W. Giordano Executive Vice Executive Vice President, Secretary and General Counsel,
President, Secretary and PIFM; Senior Vice President, Prudential Securities
General Counsel Incorporated (Prudential Securities)

Robert F. Gunia Executive Vice President Vice President, Prudential Investments; Executive Vice
and Treasurer President and Treasurer, PIFM; Senior Vice President,
Prudential Securities

Neil A. McGuinness Executive Vice President Executive Vice President and Director of Marketing, PMF&A;
Executive Vice President, PIFM

Robert J. Sullivan Executive Vice President Executive Vice President, PMF&A; Executive Vice President,
PIFM

</TABLE>

(ii) The Prudential Investment Corporation (PIC).

See "How the Fund is Managed--Manager" in the Prospectus constituting Part A
of this Registration Statement and "Investment Advisory and Other
Services--Investment Adviser" 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 07102-4077.

<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PIC PRINCIPAL OCCUPATIONS
---------------- ----------------- ---------------------
<S> <C> <C>
E. Michael Caulfield Chairman of the Board, Chief Executive Officer of Prudential Investments of The
President and Chief Prudential Insurance Company of America (Prudential)
Executive Officer and
Director

Jonathan M. Greene Senior Vice President and President--Investment Management of Prudential Investments
Director of Prudential; Senior Vice President and Director, PIC

John R. Strangfeld Vice President and President of Private Asset Management Group of Prudential;
Director Senior Vice President, Prudential; Vice President and
Director, PIC
</TABLE>

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Prudential Securities Incorporated.

Prudential Securities Incorporated is distributor for Cash Accumulation
Trust, COMMAND Government Fund, COMMAND Money Fund, COMMAND Tax-Free Fund,
Prudential Institutional Liquidity Portfolio, Inc., Prudential MoneyMart Assets,
Inc., Prudential Special Money Market Fund, Inc., Prudential Tax-Free Money
Fund, Inc., Prudential Balanced Fund, Prudential California Municipal Fund,
Prudential Distressed Securities Fund, Inc., Prudential Diversified Bond Fund,
Inc., Prudential Index Series Fund, Prudential Emerging Growth Fund, Inc.,
Prudential Equity Fund, Inc., Prudential Equity Income Fund, Prudential Europe
Growth Fund, Inc., Prudential Global Genesis Fund, Inc., Prudential Global
Limited Maturity Fund, Inc., Prudential Government Income Fund, Inc., Prudential
Government Securities Trust, Prudential High Yield Fund, Inc., Prudential
Intermediate Global Income Fund, Inc., Prudential International Bond Fund, Inc.,
Prudential Jennison Series Fund, Inc., Prudential Mortgage Income Fund, Inc.,
Prudential Multi-Sector Fund, Inc., Prudential Municipal Bond Fund, Prudential
Municipal Series Fund, Prudential National Municipals Fund, Inc., Prudential
Natural Resources Fund, Inc., Prudential Pacific Growth Fund, Inc., Prudential
Small-Cap Quantum Fund, Inc., Prudential Small Company Value Fund, Inc.,
Prudential Structured Maturity Fund, Inc., Prudential Utility Fund, Inc.,
Prudential World Fund, Inc., Global Utility Fund, Inc., Nicholas-Applegate Fund,
Inc. (Nicholas-Applegate Growth Equity Fund), and The Global Total Return Fund,
Inc.

C-3

<PAGE>

Prudential Securities is also a depositor for the following unit investment
trusts:

Corporate Investment Trust Fund
Prudential Equity Trust Shares
National Equity Trust
Prudential Unit Trusts
Government Securities Equity Trust
National Municipal Trust

(b) Information concerning officers of Prudential Investment Management
Services LLC is set forth below.

POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME (1) UNDERWRITER REGISTRANT
---- ------------- ------------
<S> <C> <C>
E. Michael Caulfield President None

Mark R. Fetting Executive Vice President None

Jonathan M. Greene Executive Vice President None

Jean D. Hamilton Executive Vice President None

Ronald P. Joelson Executive Vice President None

Brian M. Storms Executive Vice President None

John R. Strangfeld Executive Vice President None

Mario A. Mosse Senior Vice President and Chief Operating Officer None

Scott S. Wallner Vice President, Secretary and Chief Legal Officer None

Michael G. Williamson Vice President, Comptroller and Chief Financial Officer None

C. Edward Chaplin Treasurer None

(1) The address of each person named is Prudential Plaza, 751 Broad Street,
Newark, New Jersey 07102, unless otherwise indicated

</TABLE>

ITEM 28. 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, Gateway Center
Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, and Prudential Mutual
Fund Services LLC, Raritan Plaza One, Edison, New Jersey 08837. Documents
required by Rules 31a-1(b) (4), (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 LLC.

ITEM 29. 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 caption "Investment Advisory and Other Services" 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 30. UNDERTAKINGS

Not applicable.

C-4

<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 Newark, and
State of New Jersey, on the 31st day of December, 1998.

PRUDENTIAL MONEYMART ASSETS, INC.

/s/ BRIAN M. STORMS
-------------------------------------
(BRIAN M. STORMS, 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> <C> <C>
/s/ Edward D. Beach Director December 31, 1998
- --------------------------------
EDWARD D. BEACH

/s/ Delayne D. Gold Director December 31, 1998
- --------------------------------
DELAYNE D. GOLD

/s/ Robert F. Gunia Director December 31, 1998
- --------------------------------
ROBERT F. GUNIA

/s/ Don G. Hoff Director December 31, 1998
[-------------------------------
DON G. HOFF

/s/ Robert E. LaBlanc Director December 31, 1998
- --------------------------------
ROBERT E. LABLANC

/s/ Mendel A. Melzer Director December 31, 1998
- --------------------------------
MENDEL A. MELZER

/s/ Robin B. Smith Director December 31, 1998
- --------------------------------
ROBIN B. SMITH

/s/ Stephen Stoneburn Director December 31, 1998
- --------------------------------
STEPHEN STONEBURN

/s/ Brian M. Storms Director December 31, 1998
- --------------------------------
BRIAN M. STORMS

/s/ Nancy H. Teeters Director December 31, 1998
- --------------------------------
NANCY H. TEETERS

/s/ Grace C. Torres Treasurer, Principal Financial and December 31, 1998
- -------------------------------- Accounting Officer
GRACE C. TORRES

</TABLE>

<PAGE>

EXHIBIT INDEX

(a) Articles of Restatement of Articles of Incorporation, incorporated by
reference to Exhibit 1 to Post-Effective Amendment No. 33 to the
Registration Statement on Form N-1A (2-55301) filed via EDGAR on February
27, 1997.

(b) By-Laws, incorporated by reference to Exhibit 2 to Post-Effective Amendment
No. 33 to the Registration Statement on Form N-1A (2-55301) filed via EDGAR
on February 27, 1997.

(c) (i) Form of stock certificate, incorporated by reference to Exhibit 4(a) to
Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.

(ii) Instruments defining rights of shareholders incorporated by reference
to Exhibits a and b.

(d) (i) Management Agreement between the Registrant and Prudential Mutual Fund
Management, incorporated by reference to Exhibit 5(a) to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A (2-55301) filed
via EDGAR on February 27, 1997.

(ii) Subadvisory Agreement between Prudential Mutual Fund Management and
The Prudential Investment Corporation, incorporated by reference to Exhibit
5(b) to Post-Effective Amendment No. 33 to the Registration Statement on
Form N-1A (2-55301) filed via EDGAR on February 27, 1997.

(e) Distribution Agreement, incorporated by reference to Exhibit 6 to
Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.

(f) Not applicable.

(g) (i) Custodian Contract with State Street Bank and Trust Company,
incorporated by reference to Exhibit 8 to Post-Effective Amendment No. 33
to the Registration Statement on Form N-1A (2-55301) filed via EDGAR on
February 27, 1997.

(h) Transfer Agency and Service Agreement, incorporated by reference to Exhibit
9 to Post-Effective Amendment No. 33 to the Registration Statement on Form
N-1A (2-55301) filed via EDGAR on February 27, 1997.

(i) Opinion and Consent of Gardner, Carton & Douglas regarding legality of the
securities being registered, incorporated by reference to Exhibit 10(b) to
Post-Effective Amendment No. 27 to the Registration Statement on Form N-1A
(2-55301), filed via EDGAR herewith.*

(j) Consent of Independent Accountants.**

(k) Not applicable.

(l) Not applicable.

(m) Distribution and Service Plan of Registrant incorporated by reference to
Exhibit No. 15(b) to Post-Effective Amendment No. 28 on Form N-1A (2-55301)
filed via EDGAR on February 17, 1994.

(n) Financial Data Schedules filed for electronic purposes as Exhibit 27.*

(o) Rule 18f-3 Plan, incorporated by reference to Exhibit No. 18 to
Post-Effective Amendment No. 30 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on October 31, 1995.

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

* Filed herewith.
** To be filed by amendment.

February 24, 1993

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Prudential-Bache MoneyMart Assets Inc.
Shares of Common Stock $.10 par value
--------------------------------------

Ladies and Gentltmen:

We have acted as counsel for Prudential-Bache MoneyMart Assets Inc., doing
business as Prudential MoneyMart Assets, a Maryland corporation (the "Fund"), in
connection with its filing of Post-Effective Amendment No. 27 to its
Registration Statement on Form N-1A (File No. 2-55301) (the "Amendment"). In
addition to updating the information contained therein, this Amendment registers
524,888,674 shares of Common Stock, $0.10 par value of the Fund.

We have examined all instruments, documents and records which, in our
opinion, were necessary of examination for the purpose of rendering this
opinion. Based upon such examination, we are of the opinion that the
above-described shares of Common Stock will be, if an when issued by the Fund in
the manner and upon the terms set forth in said Form N-1A, validly authorized
and issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as an exhibit to the Fund's
Registration Statement on Form N-1A, as it may be amended.

Very truly yours,

/s/ GARDNER, CARTON & DOUGLAS

PHD/HJM/KSC/cav

2203C