PRUDENTIAL SERIES FUND INC, 497, 1996-09-19

PRUDENTIAL SERIES FUND INC
497, 1996-09-19

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PROSPECTUS

MAY 1, 1996

THE PRUDENTIAL
SERIES FUND, INC.

THIS PROSPECTUS IS FOR USE WITH THE DISCOVERY SELECT(SM) ANNUITY CONTRACT, AS IT
DESCRIBES ONLY THE PORTFOLIOS AVAILABLE FOR INVESTMENT THROUGH THAT CONTRACT.
THIS PROSPECTUS SHOULD BE READ IN CONJUNCTION WITH THE CURRENT PROSPECTUS FOR
THE DISCOVERY SELECT(SM) ANNUITY CONTRACT.

The Prudential Series Fund, Inc. (the "Series Fund") is a diversified, open-end
management investment company (commonly known as a "mutual fund") that is
intended to provide a range of investment alternatives through its fifteen
separate portfolios, each of which is, for investment purposes, in effect a
separate fund. Eight of the Series Fund's Portfolios are currently available for
investment under the DISCOVERY SELECT(SM) Contract through corresponding
subaccounts of the Pruco Life Flexible Premium Variable Annuity Account. The
portfolios are: the Money Market Portfolio, the Diversified Bond Portfolio, the
High Yield Bond Portfolio, the Stock Index Portfolio, the Equity Income
Portfolio, the Equity Portfolio, the Prudential Jennison Portfolio, and the
Global Portfolio. A separate class of capital stock is issued for each
portfolio. Shares of the Series Fund are currently sold only to separate
accounts (the "Accounts") of The Prudential Insurance Company of America ("The
Prudential") and certain other insurers to fund the benefits under variable life
insurance and variable annuity contracts (the "Contracts") issued by those
Companies. The Accounts invest in shares of the Series Fund through subaccounts
that correspond to the portfolios. The Accounts will redeem shares of the Series
Fund to the extent necessary to provide benefits under the Contracts or for such
other purposes as may be consistent with the Contracts.

SHARES OF THE MONEY MARKET PORTFOLIO ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. WHILE THE MONEY MARKET PORTFOLIO SEEKS TO MAINTAIN A STABLE
PRICE PER SHARE, THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO DO SO.

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

THE INVESTMENT OBJECTIVES OF THE EIGHT PORTFOLIOS CAN BE FOUND ON THE NEXT PAGE

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

Information contained in this prospectus should be read carefully by a
prospective investor before an investment is made. Additional information about
the Series Fund has been filed with the Securities and Exchange Commission in a
statement of additional information, dated May 1, 1996 which information is
incorporated herein by reference and is available without charge upon written
request to The Prudential Series Fund, Inc., Prudential Plaza, Newark, New
Jersey 07102-3777, or by telephoning (800) 445-4571.

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

PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE.

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

THE PRUDENTIAL SERIES FUND, INC.
Prudential Plaza
Newark, New Jersey 07102-3777
Telephone: (800) 445-4571

PSF-DSA Ed 5-96

<PAGE>

INVESTMENT OBJECTIVES OF THE PORTFOLIOS ARE AS FOLLOWS:

FIXED INCOME PORTFOLIOS

MONEY MARKET PORTFOLIO. The maximum current income that is consistent with
stability of capital and maintenance of liquidity through investment in
high-quality short-term debt obligations.

DIVERSIFIED BOND PORTFOLIO. A high level of income over the longer term while
providing reasonable safety of capital through investment primarily in readily
marketable intermediate and long-term fixed income securities that provide
attractive yields but do not involve substantial risk of loss of capital through
default.

HIGH YIELD BOND PORTFOLIOS

HIGH YIELD BOND PORTFOLIO. Achievement of a high total return through investment
in high yield/high risk fixed income securities in the medium to lower quality
ranges. SUCH SECURITIES MAY HAVE SPECULATIVE CHARACTERISTICS AND GENERALLY
INVOLVE GREATER RISKS OF LOSS OF INCOME AND PRINCIPAL THAN HIGHER RATED
SECURITIES.

DIVERSIFIED STOCK PORTFOLIOS

STOCK INDEX PORTFOLIO. Achievement of investment results that correspond to the
price and yield performance of publicly traded common stocks in the aggregate by
following a policy of attempting to duplicate the price and yield performance of
the Standard & Poor's 500 Composite Stock Price Index.

EQUITY INCOME PORTFOLIO. Both current income and capital appreciation through
investment primarily in common stocks and convertible securities that provide
favorable prospects for investment income returns above those of the Standard &
Poor's 500 Stock Index or the NYSE Composite Index.

EQUITY PORTFOLIO. Capital appreciation through investment primarily in common
stocks of companies, including major established corporations as well as smaller
capitalization companies, that appear to offer attractive prospects of price
appreciation that is superior to broadly-based stock indices. Current income, if
any, is incidental.

PRUDENTIAL JENNISON PORTFOLIO. Long-term growth of capital through investment
primarily in equity securities of established companies with above-average
growth prospects. Current income, if any, is incidental.

GLOBAL PORTFOLIO. Long-term growth of capital through investment primarily in
common stock and common stock equivalents of foreign and domestic issuers.
Current income, if any, is incidental.

There can be no assurance that the objectives of any portfolio will be realized.
See INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS, page 6. The Series
Fund may in the future establish other portfolios with different investment
objectives.

<PAGE>

CONTENTS

Page

FINANCIAL HIGHLIGHTS.............................................. 1

PORTFOLIO RATES OF RETURN......................................... 5

THE SERIES FUND................................................... 6

THE ACCOUNTS AND THE CONTRACTS.................................... 6

INVESTMENT MANAGER................................................ 6

INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS.............. 6
FIXED INCOME PORTFOLIOS...................................... 7
Money Market Portfolio....................................... 7
Diversified Bond Portfolio................................... 7
HIGH YIELD BOND PORTFOLIOS................................... 8
High Yield Bond Portfolio.................................... 8
DIVERSIFIED STOCK PORTFOLIOS................................. 9
Stock Index Portfolio........................................ 9
Equity Income Portfolio...................................... 12
Equity Portfolio............................................. 12
Prudential Jennison Portfolio................................ 13
Global Portfolio............................................. 13
CONVERTIBLE SECURITIES....................................... 14
FOREIGN SECURITIES........................................... 14
OPTIONS ON EQUITY SECURITIES................................. 15
OPTIONS ON DEBT SECURITIES................................... 16
OPTIONS ON STOCK INDICES..................................... 17
OPTIONS ON FOREIGN CURRENCIES................................ 17
FUTURES CONTRACTS............................................ 18
OPTIONS ON FUTURES CONTRACTS................................. 19
REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS............... 19
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES.................. 19
SHORT SALES.................................................. 20
SHORT SALES AGAINST THE BOX.................................. 20
INTEREST RATE SWAPS.......................................... 20
LOANS OF PORTFOLIO SECURITIES................................ 20

INVESTMENT RESTRICTIONS APPLICABLE TO THE PORTFOLIOS.............. 21

INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES................... 21

PURCHASE AND REDEMPTION OF SHARES................................. 22

DETERMINATION OF NET ASSET VALUE.................................. 22

DIVIDENDS, DISTRIBUTIONS, AND TAXES............................... 23

OTHER INFORMATION CONCERNING THE SERIES FUND...................... 24
INCORPORATION AND AUTHORIZED STOCK........................... 24
VOTING RIGHTS................................................ 25
MONITORING FOR POSSIBLE CONFLICT............................. 25
PERIODIC REPORTS............................................. 25
PORTFOLIO BROKERAGE AND RELATED PRACTICES.................... 25
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT..... 25
ADDITIONAL INFORMATION....................................... 26

APPENDIX: SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY
CURRENTLY INVEST ............................................... A1

<PAGE>

THE PRUDENTIAL SERIES FUND, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED)

The following financial highlights information has been audited by Deloitte &
Touche LLP, Independent Auditors. Their report is included in the Statement of
Additional Information.
<TABLE>
<CAPTION>

MONEY MARKET
-------------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
TO TO TO TO TO TO TO TO TO TO
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86*
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of year...... $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $ 1.000
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income From Investment
Operations:
Net investment income.... 0.564 0.402 0.290 0.372 0.596 0.778 0.877 0.717 0.630 0.062
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 0 0 0 0 0 0 0 0 0 0
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations........... 0.564 0.402 0.290 0.372 0.596 0.778 0.877 0.717 0.630 0.062
Distributions to
Shareholders:
Distributions from net
investment income...... (0.564) (0.402) (0.290) (0.372) (0.596) (0.778) (0.877) (0.717) (0.630) (0.062)
Distributions from
realized gains......... 0 0 0 0 0 0 0 0 0 0
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total
distributions........ (0.564) (0.402) (0.290) (0.372) (0.596) (0.778) (0.877) (0.717) (0.630) (0.062)
Reverse stock split (10
to 1).................. -- -- -- -- -- -- -- -- -- 9.000
Net increase (decrease)
in Net Asset Value..... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 9.000
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value at end of
year................... $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total Investment Rate of
Return:**.............. 5.80 % 4.05 % 2.95 % 3.79 % 6.16 % 8.16 % 9.25 % 7.35% 6.52 % 6.54 %
Ratios/Supplemental Data:
Net assets at end of year
(in millions).......... $613.3 $583.3 $474.7 $528.7 $529.6 $434.2 $236.1 $155.9 $107.2 $52.5
Ratio of expenses net of
reimbursement to
average net assets..... 0.44 % 0.47 % 0.45 % 0.47 % 0.46 % 0.50 % 0.55 % 0.57 % 0.53 % 0.55 %
Ratio of net investment
income to average net
assets................. 5.64 % 4.02 % 2.90 % 3.72 % 5.96 % 7.80 % 8.77 % 7.17 % 6.30 % 6.16 %
Portfolio turnover
rate................... -- -- -- -- -- -- -- -- -- --
Number of shares
outstanding at end of
period (in millions)... 61.3 58.3 47.5 52.9 53.0 43.4 23.6 15.6 10.7 5.2

DIVERSIFIED BOND
-------------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
TO TO TO TO TO TO TO TO TO TO
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86*
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net Asset Value at
beginning of year...... $10.038 $11.103 $10.829 $11.002 $10.332 $10.321 $ 9.942 $10.038 $ 11.048 $10.967
------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Income From Investment
Operations:
Net investment income.... 0.763 0.682 0.686 0.761 0.797 0.825 0.886 0.875 0.859 0.904
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 1.293 (1.040) 0.398 0.013 0.842 (0.004) 0.424 (0.069) (0.821) 0.607
------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Total from investment
operations........... 2.056 (0.358) 1.084 0.774 1.639 0.821 1.310 0.806 0.038 1.511
------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.755) (0.683) (0.657) (0.728) (0.779) (0.810) (0.854) (0.902) (0.990) (0.909)
Distributions from net
realized gains......... (0.026) (0.024) (0.153) (0.219) (0.190) 0 (0.077) 0 (0.058) (0.521)
------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Total
distributions........ (0.781) (0.707) (0.810) (0.947) (0.969) (0.810) (0.931) (0.902) (1.048) (1.430)
------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Net increase (decrease)
in Net Asset Value..... 1.275 (1.065) 0.274 (0.173) 0.670 0.011 0.379 (0.096) (1.010) 0.081
------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Net Asset Value at end of
year................... $11.313 $10.038 $11.103 $10.829 $11.002 $10.332 $10.321 $ 9.942 $ 10.038 $11.048
------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Total Investment Rate of
Return:**.............. 20.73 % (3.23 %) 10.13 % 7.19 % 16.44 % 8.32 % 13.49 % 8.19 % 0.29 % 14.45 %
Ratios/Supplemental Data:
Net assets at end of year
(in millions).......... $655.8 $541.6 $576.2 $428.8 $318.7 $227.7 $191.1 $148.8 $139.5 $110.1
Ratio of expenses net of
reimbursement to
average net assets..... 0.44 % 0.45 % 0.46 % 0.47 % 0.49 % 0.47 % 0.53 % 0.53 % 0.53 % 0.51 %
Ratio of net investment
income to average net
assets................. 7.00 % 6.41 % 6.05 % 6.89 % 7.43 % 8.06 % 8.56 % 8.52 % 8.15 % 8.11 %

Portfolio turnover
rate................... 199.09 % 31.57 % 41.12 % 60.53 % 131.01 % 42.10 % 272.85 % 222.20 % 238.41 % 246.82 %
Number of shares
outstanding at end of
period (in millions)... 58.0 54.0 51.9 39.6 29.0 22.0 18.5 15.0 13.9 10.0
</TABLE>

All calculations are based on average month-end shares outstanding, where
applicable.

*The per share information of the Portfolios of The Prudential Series Fund,
Inc. has not been restated to reflect the operations of the Pruco Life Series
Fund, Inc. prior to the November 1, 1986 merger.

**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns. This information should be read
in conjunction with the financial statements of The Prudential Series Fund,
Inc. and notes thereto, which appear in the Statement of Additional
Information.

Further information about the performance of the portfolios is contained in
the Annual Report to Contract Owners which may be obtained without charge.

1 - SERIES FUND

<PAGE>

THE PRUDENTIAL SERIES FUND, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED)

The following financial highlights information has been audited by Deloitte &
Touche LLP, Independent Auditors. Their report is included in the Statement of
Additional Information.
<TABLE>
<CAPTION>

HIGH YIELD BOND
-----------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 02/23/87
TO TO TO TO TO TO TO TO TO
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of year...... $ 7.366 $ 8.406 $ 7.719 $ 7.212 $ 5.838 $ 7.673 $ 8.904 $8.742 $10.000
------- ------- ------- ------- ------- ------- ------- ------ -------
Income From Investment
Operations:
Net investment income.... 0.812 0.869 0.822 0.824 0.836 0.936 1.071 1.066 0.968
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 0.460 (1.102) 0.632 0.415 1.397 (1.792) (1.223) 0.065 (1.428)
------- ------- ------- ------- ------- ------- ------- ------ -------
Total from investment
operations........... 1.272 (0.233) 1.454 1.239 2.233 (0.856) (0.152) 1.131 (0.460)
------- ------- ------- ------- ------- ------- ------- ------ -------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.838) (0.807) (0.767) (0.732) (0.859) (0.979) (1.079) (0.969) (0.798)
Distributions from net
realized gains......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
------- ------- ------- ------- ------- ------- ------- ------ -------
Total
distributions........ (0.838) (0.807) (0.767) (0.732) (0.859) (0.979) (1.079) (0.969) (0.798)
------- ------- ------- ------- ------- ------- ------- ------ -------
Net increase (decrease)
in Net Asset Value..... 0.434 (1.040) 0.687 0.507 1.374 (1.835) (1.231) 0.162 (1.258)
------- ------- ------- ------- ------- ------- ------- ------ -------
Net Asset Value at end of
year................... $ 7.800 $ 7.366 $ 8.406 $ 7.719 $ 7.212 $ 5.838 $ 7.673 $8.904 $ 8.742
======= ======= ======= ======= ======= ======= ======= ====== =======
Total Investment Rate of
Return:**.............. 17.56 % (2.72 %) 19.27 % 17.54 % 39.71 % (11.84 %) (2.05 %) 13.17 % (4.91 %)
Ratios/Supplemental Data:
Net assets at end of year
(in millions).......... $367.9 $306.2 $282.9 $153.7 $78.7 $49.8 $60.0 $65.8 $40.4
Ratio of expenses net of
reimbursement to
average net assets..... 0.61 % 0.65 % 0.65 % 0.70 % 0.75 % 0.75 % 0.71 % 0.75% 0.73 %
Ratio of net investment
income to average net
assets................. 10.34 % 9.88 % 9.91 % 10.67 % 12.05 % 13.42 % 12.29 % 11.60% 10.13 %
Portfolio turnover
rate................... 139.34 % 68.67 % 95.52 % 75.04 % 57.21 % 34.66 % 60.59 % 70.73 % 16.58 %
Number of shares
outstanding at end of
period (in millions)... 47.2 41.6 33.6 19.9 10.9 8.5 7.8 7.4 4.6

STOCK INDEX
-----------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 10/19/87
TO TO TO TO TO TO TO TO TO
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of year...... $14.957 $15.202 $14.218 $13.605 $10.760 $11.732 $ 9.454 $8.531 $ 8.071
------- ------- ------- ------- ------- ------- ------- ------ -------
Income From Investment
Operations:
Net investment income.... 0.403 0.377 0.361 0.350 0.351 0.357 0.326 0.357 0.047
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 5.126 (0.231) 1.002 0.600 2.814 (0.792) 2.570 0.951 0.548
------- ------- ------- ------- ------- ------- ------- ------ -------
Total from investment
operations........... 5.529 0.146 1.363 0.950 3.165 (0.435) 2.896 1.308 0.595
------- ------- ------- ------- ------- ------- ------- ------ -------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.384) (0.368) (0.346) (0.329) (0.307) (0.309) (0.354) (0.385) (0.135)
Distributions from net
realized gains......... (0.146) (0.023) (0.033) (0.008) (0.013) (0.228) (0.264) 0.000 0.000
------- ------- ------- ------- ------- ------- ------- ------ -------
Total
distributions........ (0.530) (0.391) (0.379) (0.337) (0.320) (0.537) (0.618) (0.385) (0.135)
------- ------- ------- ------- ------- ------- ------- ------ -------
Net increase (decrease)
in Net Asset Value..... 4.999 (0.245) 0.984 0.613 2.845 (0.972) 2.278 0.923 0.460
------- ------- ------- ------- ------- ------- ------- ------ -------
Net Asset Value at end of
year................... $19.956 $14.957 $15.202 $14.218 $13.605 $10.760 $11.732 $9.454 $ 8.531
======= ======= ======= ======= ======= ======= ======= ====== =======
Total Investment Rate of
Return:**.............. 37.06 % 1.01 % 9.66 % 7.13 % 29.72 % (3.63 %) 30.93 % 15.44 % 7.35 %
Ratios/Supplemental Data:
Net assets at end of year
(in millions).......... $1,031.3 $664.5 $615.1 $433.5 $236.9 $104.5 $53.8 $36.0 $24.5
Ratio of expenses net of
reimbursement to
average net assets..... 0.38 % 0.42 % 0.42 % 0.46 % 0.47 % 0.60 % 0.69 % 0.78% 0.45 %
Ratio of net investment
income to average net
assets................. 2.27 % 2.50 % 2.43 % 2.56 % 2.82 % 3.23 % 2.95 % 3.87 % 0.53 %
Portfolio turnover
rate................... 1.16 % 1.74 % 0.60 % 0.43 % 1.10 % 17.80 % 14.54 % 15.62 % 0.47 %
Number of shares
outstanding at end of
period (in millions)... 51.7 44.4 40.5 30.5 17.4 9.7 4.6 3.8 2.9
</TABLE>

All calculations are based on average month-end shares outstanding, where
applicable.

Further information about the performance of the portfolios is
contained in the Annual Report to Contract Owners which may be obtained
without charge.

2 - SERIES FUND
<PAGE>

THE PRUDENTIAL SERIES FUND, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED)

The following financial highlights information has been audited by Deloitte &
Touche LLP, Independent Auditors. Their report is included in the Statement of
Additional Information.
<TABLE>
<CAPTION>

EQUITY INCOME
---------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 02/19/88
TO TO TO TO TO TO TO TO
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of year ..... $14.484 $15.655 $13.673 $13.209 $11.241 $12.254 $10.621 $10.132
------- ------- ------- ------- ------- ------- ------- -------
Income From Investment
Operations:
Net investment income.... 0.644 0.664 0.551 0.582 0.578 0.509 0.539 0.452
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 2.495 (0.453) 2.459 0.723 2.430 (0.980) 1.841 0.684
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 3.139 0.211 3.010 1.305 3.008 (0.471) 2.380 1.136
------- ------- ------- ------- ------- ------- ------- -------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.618) (0.562) (0.501) (0.515) (0.542) (0.461) (0.462) (0.420)
Distributions from net
realized gains......... (0.734) (0.820) (0.527) (0.326) (0.498) (0.081) (0.285) (0.227)
------- ------- ------- ------- ------- ------- ------- -------
Total
distributions........ (1.352) (1.382) (1.028) (0.841) (1.040) (0.542) (0.747) (0.647)
------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease)
in Net Asset Value..... 1.787 (1.171) 1.982 0.464 1.968 (1.013) 1.633 0.489
------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value at end of
year................... $16.271 $14.484 $15.655 $13.673 $13.209 $11.241 $12.254 $10.621
======= ======= ======= ======= ======= ======= ======= =======
Total Investment Rate of
Return:**.............. 21.70 % 1.44 % 22.28 % 10.14 % 27.50 % (3.73 %) 22.67 % 11.31 %
Ratios/Supplemental Data:
Net assets at end of year
(in millions).......... $1,110.0 $859.7 $602.8 $234.4 $106.9 $55.5 $34.9 $11.3
Ratio of expenses net of
reimbursement to
average net assets..... 0.43 % 0.52 % 0.54 % 0.57 % 0.57 % 0.60 % 0.74 % 0.64 %
Ratio of net investment
income to average net
assets................. 4.00 % 3.92 % 3.56 % 4.32 % 4.53 % 4.53 % 4.48 % 4.08 %
Portfolio turnover
rate................... 63.55 % 62.66 % 41.43 % 39.98 % 60.12 % 54.79 % 56.65 % 61.31 %
Number of shares
outstanding at end of
period (in millions)... 68.2 59.4 38.5 17.1 8.1 4.9 2.9 1.1
<CAPTION>

EQUITY
---------------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
TO TO TO TO TO TO TO TO TO TO
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86*
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of year...... $20.662 $21.487 $18.903 $17.905 $15.449 $18.539 $15.463 $13.620 $14.815 $14.634
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income From Investment
Operations:
Net investment income.... 0.546 0.512 0.417 0.444 0.482 0.577 0.474 0.402 0.393 0.448
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 5.891 0.054 3.666 2.050 3.414 (1.573) 4.064 1.909 (0.065) 1.765
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations........... 6.437 0.566 4.083 2.494 3.896 (0.996) 4.538 2.311 0.328 2.213
Distributions to
Shareholders:
Distributions from net
investment income...... (0.515) (0.487) (0.404) (0.439) (0.478) (0.563) (0.503) (0.468) (0.496) (0.275)
Distributions from net
realized gains......... (0.944) (0.904) (1.095) (1.057) (0.962) (1.531) (0.959) 0.000 (1.027) (1.757)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total
distributions........ (1.459) (1.391) (1.499) (1.496) (1.440) (2.094) (1.462) (0.468) (1.523) (2.032)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease)
in Net Asset Value..... 4.978 (0.825) 2.584 0.998 2.456 (3.090) 3.076 1.843 (1.195) 0.181
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value at end of
year................... $25.640 $20.662 $21.487 $18.903 $17.905 $15.449 $18.539 $15.463 $13.620 $14.815
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total Investment Rate of
Return:**.............. 31.29 % 2.78 % 21.87 % 14.17 % 26.01 % (5.21 %) 29.73 % 17.05 % 1.67 % 15.10 %
Ratios/Supplemental Data:
Net assets at end of year
(in millions).......... $3,813.8 $2,617.8 $2,186.5 $1,416.6 $1,032.8 $700.5 $675.5 $500.1 $451.0 $247.9
Ratio of expenses net of
reimbursement to
average net assets..... 0.48 % 0.55 % 0.53 % 0.53 % 0.51 % 0.56 % 0.56 % 0.57 % 0.51 % 0.52 %
Ratio of net investment
income to average net
assets................. 2.28 % 2.39 % 1.99 % 2.33 % 2.66 % 3.37 % 2.66 % 2.67 % 2.34 % 2.90 %
Portfolio turnover
rate................... 17.65 % 6.90 % 12.95 % 15.70 % 20.85 % 84.84 % 73.54 % 62.35 % 79.91 % 117.15 %
Number of shares
outstanding at end of
period (in millions)... 148.7 126.7 101.8 74.9 57.7 45.3 36.4 32.3 33.1 16.7
</TABLE>

All calculations are based on average month-end shares outstanding, where
applicable.

Further information about the performance of the portfolios is
contained in the Annual Report to Contract Owners which may be obtained
without charge.

3 - SERIES FUND
<PAGE>

THE PRUDENTIAL SERIES FUND, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED)

The following financial highlights information has been audited by Deloitte &
Touche LLP, Independent Auditors. Their report is included in the Statement of
Additional Information.

PRUDENTIAL
JENNISON
--------
04/25/95*
TO
12/31/95
--------
Net Asset Value at
beginning of period $10.000
-------
Income From Investment
Operations:
Net investment income.... 0.018
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 2.535
-------
Total from investment
operations........... 2.553
-------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.006)
Distributions from net
realized gains......... 0.000
-------
Total
distributions........ (0.006)
-------
Net increase (decrease)
in Net Asset Value..... 2.547
-------
Net Asset Value at end of
year................... $12.547
=======
Total Investment Rate of
Return:**.............. 24.42%
Ratios/Supplemental Data:
Net assets at end of year
(in millions).......... $63.1
Ratio of expenses net of
reimbursement to
average net assets..... 0.79%
Ratio of net investment
income to average net
assets................. 0.15%
Portfolio turnover
rate................... 37.45%
Number of shares
outstanding at end of
period (in millions)... 5.0

GLOBAL
---------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 09/19/88
TO TO TO TO TO TO TO TO
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of year ..... $13.879 $14.639 $10.368 $10.792 $ 9.866 $11.547 $10.508 $ 9.818
------- ------- ------- ------- ------- ------- ------- -------
Income From Investment
Operations:
Net investment income.... 0.065 0.028 0.023 0.051 0.096 0.203 0.079 0.052
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 2.138 (0.744) 4.433 (0.419) 1.020 (1.802) 1.806 0.787
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations........... 2.203 (0.716) 4.456 (0.368) 1.116 (1.599) 1.885 0.839
------- ------- ------- ------- ------- ------- ------- -------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.242) (0.019) (0.079) (0.056) (0.100) (0.067) (0.073) (0.149)
Distributions from net
realized gains......... (0.307) (0.025) (0.106) 0.000 (0.090) (0.015) (0.773) 0.000
------- ------- ------- ------- ------- ------- ------- -------
Total
distributions........ (0.549) (0.044) (0.185) (0.056) (0.190) (0.082) (0.846) (0.149)
------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease)
in Net Asset Value..... 1.654 (0.760) 4.271 (0.424) 0.926 (1.681) 1.039 0.690
------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value at end of
year................... $15.533 $13.879 $14.639 $10.368 $10.792 $ 9.866 $11.547 $10.508
======= ======= ======= ======= ======= ======= ======= =======
Total Investment Rate of
Return:**.............. 15.88 % (4.89 %) 43.14 % (3.42 %) 11.39 % (12.91 %) 18.82 % 8.57 %
Ratios/Supplemental Data:
Net assets at end of year
(in millions).......... $400.1 $345.7 $129.1 $34.0 $34.3 $26.2 $29.4 $26.9
Ratio of expenses net of
reimbursement to
average net assets..... 1.06 % 1.23 % 1.44 % 1.87 % 1.62 % 1.67 % 1.47 % 0.42 %
Ratio of net investment
income to average net
assets................. 0.44 % 0.20 % 0.18 % 0.49 % 0.92 % 1.92 % 0.70 % 0.51 %
Portfolio turnover
rate................... 58.52 % 37.46 % 54.54 % 78.16 % 136.21 % 43.12 % 47.95 % 6.40 %
Number of shares
outstanding at end of
period (in millions)... 25.7 24.9 8.8 3.3 3.2 2.7 2.5 2.6

</TABLE>

All calculations are based on average month-end shares outstanding, where
applicable.

*Commencement of business.

Further information about the performance of the portfolios is
contained in the Annual Report to Contract Owners which may be obtained
without charge.

4 - SERIES FUND
<PAGE>

PORTFOLIO RATES OF RETURN

The following table, based upon the immediately preceding condensed financial
information for the Series Fund, shows first the average annual compounded net
rates of return for each Portfolio for the year ended 12/31/95 for the 5 year
and 10 year periods ending on that date, and from the inception date of each
Portfolio to December 31, 1995. Then, the annual net rates of return for each
Portfolio for each year are shown. These rates of return should not be regarded
as an estimate or prediction of future performance. They may be useful in
assessing the competence and performance of the Series Fund's investment advisor
and in helping you to decide which portfolios to choose. THIS INFORMATION
RELATES ONLY TO THE SERIES FUND AND DOES NOT REFLECT THE VARIOUS OTHER CHARGES
MADE UNDER THE CONTRACTS.

5 YEAR 10 YEAR
PERIOD PERIOD INCEPTION YEAR YEAR YEAR
INCEPTION YEAR ENDED ENDED ENDED DATE TO ENDED ENDED ENDED
DATE 12/31/95 12/31/95 12/31/95 12/31/95 12/31/95 12/31/94 12/31/93
----------- ----------- ----------- ----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET 5/83 5.8% 4.5% 6.0% 6.6% 5.8% 4.1% 3.0%
DIVERSIFIED BOND 5/83 20.7% 9.9% 9.4% 9.9% 20.7% -3.2% 10.1%
HIGH YIELD BOND 2/87 17.6% 17.4% N/A 8.6% 17.6% -2.7% 20.0%
STOCK INDEX 10/87 37.1% 16.1% N/A 15.7% 37.1% 1.0% 9.7%
EQUITY INCOME 2/88 21.7% 16.2% N/A 13.9% 21.7% 1.4% 22.3%
EQUITY 5/83 31.3% 18.8% 15.0% 14.6% 31.3% 2.8% 21.9%
PRUDENTIAL
JENNISON 5/95 N/A N/A N/A 24.4% N/A N/A N/A
GLOBAL 9/88 15.9% 11.2% N/A 9.3% 15.9% -4.9% 43.1%

YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET 3.8% 6.2% 8.2% 9.3% 7.4% 6.5% 6.5%
DIVERSIFIED BOND 7.2% 16.4% 8.3% 13.5% 8.2% 0.3% 14.4%
HIGH YIELD BOND 17.5% 39.2% -11.8% -2.1% 13.2% N/A N/A
STOCK INDEX 7.1% 29.7% -3.6% 30.9% 15.4% N/A N/A
EQUITY INCOME 10.1% 27.5% -3.7% 22.7% N/A N/A N/A
EQUITY 14.2% 26.0% -5.1% 29.7% 17.1% 1.7% 15.1%
PRUDENTIAL
JENNISON N/A N/A N/A N/A N/A N/A N/A
GLOBAL -3.4% 11.4% -12.9% 18.8% N/A N/A N/A

</TABLE>

5 - SERIES FUND
<PAGE>

THE SERIES FUND

The Prudential Series Fund, Inc. (the "Series Fund"), a diversified open-end
management investment company, is a Maryland corporation organized on November
15, 1982. On October 31, 1986, the Pruco Life Series Fund, Inc., a diversified
open-end management investment company that sold its shares to separate accounts
of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey,
was merged into the Series Fund. Pruco Life's DISCOVERY SELECT(SM) Annuity
Contract may currently invest in eight of the Series Fund's Portfolios: the
Money Market Portfolio, the Diversified Bond Portfolio, the High Yield Bond
Portfolio, the Stock Index Portfolio, the Equity Income Portfolio, the Equity
Portfolio, the Prudential Jennison Portfolio, and the Global Portfolio. Each
portfolio is, for investment purposes, in effect a separate investment fund, and
a separate class of capital stock is issued for each portfolio. In other
respects the Series Fund is treated as one entity. Each share of capital stock
issued with respect to a portfolio has a pro-rata interest in the assets of that
portfolio and has no interest in the assets of any other portfolio. Each
portfolio bears its own liabilities and also its proportionate share of the
general liabilities of the Series Fund. The Series Fund is registered under the
Investment Company Act of 1940 (the "1940 Act") as an open-end, diversified,
management investment company. This registration does not imply any supervision
by the Securities and Exchange Commission over the Series Fund's management or
its investment policies or practices.

THE ACCOUNTS AND THE CONTRACTS

Shares in the Series Fund are currently sold only to separate accounts of The
Prudential Insurance Company of America ("The Prudential") and certain other
insurers to fund benefits under variable life insurance and variable annuity
contracts issued by those Companies. All the separate accounts are referred to
as the "Accounts", and all the contracts are referred to as the "Contracts".
Each Contract owner allocates the net premiums and the assets relating to the
Contract, within the limitations described in the Contracts, among the
subaccounts of the Accounts which in turn invest in the corresponding portfolios
of the Series Fund. Not all portfolios of the Series Fund are currently
available to all Contracts. The attached prospectus for the Contracts lists the
portfolios that are currently available and describes the particular type of
Contract selected and the relationship between changes in the value of shares of
each portfolio and changes in the benefits payable under the Contracts. The
rights of the Accounts as shareholders should be distinguished from the rights
of a Contract owner which are described in the Contracts. The terms
"shareholder" or "shareholders" in this prospectus refer to the Accounts.

INVESTMENT MANAGER

The Prudential is the investment advisor of the Series Fund. The Prudential's
principal business address is Prudential Plaza, Newark, New Jersey 07102-3777.

The Prudential has entered into a Service Agreement with its wholly-owned
subsidiary The Prudential Investment Corporation ("PIC"), which provides that
PIC will furnish to The Prudential such services as The Prudential may require
in connection with the performance of its obligations under an Investment
Advisory Agreement with the Series Fund. In addition, The Prudential has entered
into a Subadvisory Agreement with its wholly-owned subsidiary Jennison
Associates Capital Corp. ("Jennison"), under which Jennison furnishes investment
advisory services in connection with the management of the Prudential Jennison
Portfolio. See INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES, page 21.

The Prudential will continue to have responsibility for all investment advisory
services under its Investment Advisory Agreement with respect to the Series
Fund.

INVESTMENT OBJECTIVES AND POLICIES
OF THE PORTFOLIOS

Each portfolio of the Series Fund has a different investment objective which it
pursues through separate investment policies as described below. Since each
portfolio has a different investment objective, each can be expected to have
different investment results and incur different market and financial risks. The
Series Fund may in the future establish other portfolios with different
investment objectives.

The investment objectives of each portfolio are fundamental and may not be
changed without the approval of the holders of a majority of the outstanding
shares of the portfolio affected (which for this purpose and under the 1940 Act
means the lesser of: (i) 67% of the shares represented at a meeting at which
more than 50% of the outstanding shares are represented; or (ii) more than 50%
of the outstanding shares). The policies by which a portfolio seeks to achieve
its investment objectives, however, are not fundamental. They may be changed by
the Board of Directors of the Series Fund without the approval of the
shareholders.

6 - SERIES FUND

<PAGE>

The portfolio turnover rate of the portfolios that were available for investment
as of December 31, 1995 can be found in the FINANCIAL HIGHLIGHTS table on pages
1 through 4. The portfolio turnover rate is, generally, the percentage computed
by dividing the lesser of portfolio purchases or sales by the average value of
the portfolio, in each case excluding securities with maturities of 1 year or
less. Generally, the higher the portfolio turnover rate, the greater the
brokerage costs incurred by a portfolio.

The following paragraphs describe the investment objectives and policies of each
portfolio. There is no guarantee that any of these objectives will be met.

FIXED INCOME PORTFOLIOS

MONEY MARKET PORTFOLIO. The objective of this portfolio is to achieve, through
investment in high-quality short-term debt obligations, the maximum current
income that is consistent with stability of capital and maintenance of
liquidity.

The portfolio seeks to achieve this objective by following the policy of
investing primarily in money market instruments denominated in U.S. dollars that
mature in 397 days or less from the date the portfolio acquires them.
Money-market instruments include short-term obligations of the United States and
foreign governments, their agencies, instrumentalities, and political
subdivisions, and of domestic and foreign banks and corporations. They also
include commercial paper, other corporate obligations, obligations of savings
and loan associations and savings banks, and variable amount demand master
notes. The portfolio may also enter into repurchase and reverse repurchase
agreements and may purchase and sell securities on a when-issued and delayed
delivery basis. These investment techniques may involve additional risks. A
detailed description of the money market instruments in which the portfolio may
invest, of the repurchase and reverse repurchase agreements it may enter into,
and of the risks associated with those instruments and agreements may be found
in the Appendix to this prospectus.

Because of the high quality, short-term nature of the portfolio's holdings,
increases in the value of an investment in the portfolio will be derived almost
entirely from interest on the securities held by it. Accordingly, the results
for the portfolio are subject to the risk of fluctuation in short-term interest
rates.

DIVERSIFIED BOND PORTFOLIO. The objective of this portfolio is to achieve a high
level of income over the longer term while providing reasonable safety of
capital through investment primarily in readily marketable intermediate and
long-term fixed income securities that provide attractive yields but do not
involve substantial risk of loss of capital through default.

The portfolio seeks to achieve this objective by following the policies of
purchasing primarily debt securities of investment grade or, if not rated, of
comparable quality in the opinion of the portfolio manager and of investing from
time to time a portion of its assets in short-term debt obligations of the kind
held in the Money Market Portfolio as described in the Appendix to this
prospectus. Since the value of fixed income securities generally fluctuates
inversely with changes in interest rates, the proportions of intermediate or
longer-term securities and short-term debt obligations held in the portfolio
will vary to reflect The Prudential's assessment of prospective changes in
interest rates, so that the portfolio may benefit from relative price
appreciation when interest rates decline and suffer lesser declines in value
when interest rates rise. The success of this strategy will depend on The
Prudential's ability to forecast changes in interest rates, and there is a
corresponding risk that the value of the securities held in the portfolio will
decline.

At least 80% of the portfolio's holdings (including short-term debt obligations)
will generally consist of debt securities that at the time of purchase have a
rating within the four highest grades determined by Moody's Investor Services,
Inc. ("Moody's"), Standard & Poor's Corporation ("S&P"), or a similar
nationally-recognized rating service. The portfolio may retain a security whose
rating has dropped below the four highest grades as determined by a commercial
rating service. Without limitation, the portfolio may invest in obligations of
the U.S. Government and its agencies and instrumentalities. The Appendix to the
statement of additional information defines the ratings that are given to debt
securities by Moody's and S&P and describes the standards applied by them in
assigning these ratings.

The remaining assets of the portfolio may be invested in, among other things,
debt securities that are not rated within the four highest grades or in
convertible debt securities and preferred or convertible preferred stocks that
are rated within the four highest grades applicable to such securities. On
occasion, however, the portfolio may acquire common stock, not through direct
investment but by the conversion of convertible debt securities or the exercise
of warrants. For additional information regarding warrants, see INVESTMENT
OBJECTIVES AND POLICIES OF THE PORTFOLIOS in the statement of additional
information. No more than 10% of the value of the total assets of the portfolio
will be held in common stocks, and those will usually be sold as soon as a
favorable opportunity is available.

The portfolio may invest up to 20% of its total assets in United States currency
denominated debt securities issued outside the United States by foreign or
domestic issuers. For additional information regarding such securities, see
FOREIGN SECURITIES on page 14.

7 - SERIES FUND

<PAGE>

In addition, the portfolio may: (i) purchase and sell options on debt
securities; (ii) purchase and sell interest rate futures contracts and options
thereon; (iii) purchase securities on a when-issued or delayed delivery basis;
(iv) use interest rate swaps; and (v) make short sales. These techniques are
described on pages 16 through 20, and further information about some of them is
included in the statement of additional information.

Barbara Kenworthy, Managing Director, Prudential Mutual Fund Investment
Management ("PMFIM"), a division of PIC, has been portfolio manager of the
Diversified Bond Portfolio since 1995. Ms. Kenworthy is also portfolio manager
of the Prudential Diversified Bond Fund, Inc., the Prudential Government Income
Fund, Inc., and the Government Income and Zero Coupon Bond Portfolios 2000 and
2005 of the Series Fund. Prior to 1994, Ms. Kenworthy was a portfolio manager
and president of several taxable fixed-income funds for The Dreyfus Corp.

HIGH YIELD BOND PORTFOLIOS

HIGH YIELD BOND PORTFOLIO. The objective of this portfolio is to achieve a high
total return through investment in a diversified portfolio of high yield/high
risk fixed income securities.

The portfolio seeks to achieve its objective by following a policy of generally
investing in fixed income securities rated in the medium to lower categories by
recognized rating services or in unrated fixed income securities of comparable
quality. The portfolio expects to invest principally in fixed income securities
rated Baa or lower by Moody's, or BBB or lower by S&P. These securities are
sometimes known as "junk bonds." Corporate bonds which are rated Baa by Moody's
are described by Moody's as being investment grade, but are also characterized
as having speculative characteristics. Corporate bonds rated below Baa by
Moody's and BBB by S&P are considered speculative. A description of corporate
bond ratings is contained in the Appendix to the statement of additional
information.

Medium to lower rated and comparable non-rated securities tend to offer higher
yields than higher rated securities with the same maturities because the
historical financial condition of the issuers of such securities may not have
been as strong as that of other issuers. Since medium to lower rated securities
generally involve greater risks of loss of income and principal than higher
rated securities, investors should consider carefully the relative risks
associated with investments in high yield/high risk securities which carry
medium to lower ratings and in comparable non-rated securities. Investors should
understand that such securities are not generally meant for short-term
investing.

The achievement of the portfolio's investment objectives will depend on The
Prudential's analytical and portfolio management skills. These skills are more
important in connection with the investment in medium to lower rated and
comparable unrated securities and to the portfolio's performance than would be
the case if the portfolio invested in higher quality fixed income securities. In
selecting securities for the portfolio, The Prudential will evaluate, among
other things, an issuer's financial history, condition, prospects and
management. A credit rating assigned by a commercial rating service will not
measure the market risk of high yield/high risk bonds and may not be a timely
reflection of the condition and economic viability of an individual issuer. In
its credit analysis, The Prudential therefore will not rely principally on the
ratings assigned by the ratings services (e.g., Moody's and S&P), although such
ratings will be considered. Through careful selection and by investment in a
diversified mix of securities, The Prudential will seek to reduce the risks that
are associated with investing in medium to lower rated and comparable unrated
debt securities.

Fixed income securities are subject to the risk of an issuer's inability to meet
principal and interest payments on the obligations (credit risk) and may also be
subject to price volatility due to such factors as interest rate sensitivity,
market perception of the creditworthiness of the issuer and general market
liquidity (market risk). The value of the fixed income securities in the
portfolio will be directly impacted by the market perception of the
creditworthiness of the securities' issuers and will fluctuate inversely with
changes in interest rates. Lower rated or unrated securities are more likely to
react to developments affecting market and credit risk than are more highly
rated securities, which react primarily to movements in the general level of
interest rates. For example, because investors generally perceive that there are
greater risks associated with investing in medium or lower rated securities, the
yields and prices of such securities may tend to fluctuate more than those of
higher rated securities. Moreover, in the lower quality segments of the fixed
income securities market, changes in perception of the creditworthiness of
individual issuers tend to occur more frequently and in a more pronounced manner
than do changes in higher quality segments of the fixed income securities
market. The yield and price of medium to lower rated securities therefore may
experience greater volatility than is the case with higher rated securities. The
Prudential considers both credit risk and market risk in selecting securities
for the portfolio. By holding a diversified selection of such securities, the
portfolio seeks to reduce this volatility.

The secondary market for high yield/high risk securities, which is concentrated
in relatively few market makers, may not be as liquid as the secondary market
for more highly rated securities. Under adverse market or economic conditions,
the secondary market for high yield/high risk securities could contract further,
independent of any specific adverse changes in the condition of a particular
issuer. As a result, The Prudential could find it more difficult to sell such
securities or may be able to sell the securities only at prices lower than if
such securities were

8 - SERIES FUND

<PAGE>

widely traded. Prices realized upon the sale of such lower rated or unrated
securities therefore may be less than the prices used in calculating the
portfolio's net asset value. In the absence of readily available market
quotations, high yield/high risk securities will be valued by the Series Fund's
Board of Directors using a method that, in the good faith belief of the Board,
accurately reflects fair value. Valuing such securities in an illiquid market is
a difficult task. The Board's judgment plays a more significant role in valuing
such securities than those securities for which more objective market data are
available.

During the fiscal year ended December 31, 1995, the monthly dollar weighted
average ratings of the debt obligations held by the High Yield Bond Portfolio,
expressed as a percentage of the portfolio's total investments, were as follows:

PERCENTAGE OF TOTAL
RATINGS INVESTMENTS
------- -------------------
AAA/Aaa 3.3%*
AA/Aa 0%
A/A 0%
BBB/Baa 0%
BB/Ba 15.9%
B/B 59.2%
CCC/Caa or lower 7.5%
Unrated 14.1%

*Short-term investments and cash.

Consistent with its investment objective, the portfolio anticipates that under
normal conditions at least 80% of the value of its total assets will be invested
in high yield/high risk, medium to lower rated fixed income securities. Fixed
income securities appropriate for the portfolio may include both convertible and
nonconvertible debt securities and preferred stock. The portfolio will not
acquire common stocks, except when attached to or included in a unit with fixed
income securities which otherwise would be attractive to the portfolio.

The portfolio may invest up to 20% of its total assets in United States currency
denominated fixed-income securities issued outside the United States by foreign
and domestic issuers. For additional information regarding such securities, see
FOREIGN SECURITIES on page 14.

The portfolio may, when it has temporary cash available, enter into repurchase
agreements and invest in other short-term obligations of the type invested in by
the Money Market Portfolio. The portfolio may also invest in commercial paper of
domestic corporations that does not meet the quality restrictions applicable to
the investments of the Money Market Portfolio. Moreover, when market conditions
dictate a more defensive investment strategy, the portfolio may invest more
substantially in such short-term obligations. The portfolio may also (i)
purchase and sell options on debt securities; (ii) purchase and sell interest
rate futures contracts and options thereon; (iii) purchase securities on a
when-issued or delayed delivery basis; (iv) use interest rate swaps; and (v)
make short sales. These techniques are described on pages 16 through 20, and
further information about some of them is included in the statement of
additional information.

Although the portfolio is not expected to engage in substantial short-term
trading, it may sell securities it owns without regard to the length of time
they have been held. The portfolio's turnover rate is not expected to exceed
150%.

Lars Berkman, Managing Director, PMFIM, and Michael Snyder, Vice President,
PMFIM, have been co-managers of the High Yield Bond Portfolio since 1995. Mr.
Berkman is also portfolio manager of the Prudential High Yield Fund and has been
employed as a portfolio manager in the mutual fund unit since 1990. Mr. Snyder
is also the portfolio manager of the High Yield Income Fund, Inc. for The
Prudential and has been employed as a portfolio manager in the mutual fund unit
since 1987.

DIVERSIFIED STOCK PORTFOLIOS

STOCK INDEX PORTFOLIO. The objective of this portfolio is to achieve investment
results that correspond to the price and yield performance of publicly-traded
common stocks in the aggregate.

The portfolio seeks to achieve this objective by following the policy of
attempting to duplicate the price and yield performance of the Standard & Poor's
500 Composite Stock Price Index (the "S&P 500 Index"), an index which represents
more than 70% of the total market value of all publicly-traded common stocks and
is widely viewed among investors as representative of the performance of
publicly-traded common stocks as a whole. The S&P 500 Index is composed of 500
selected common stocks, over 95% of which are listed on the New York Stock
Exchange ("NYSE"). Standard & Poor's Corporation chooses the stocks to be
included in the index on a statistical

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<PAGE>

basis taking into account market values and industry diversification. Inclusion
in the index in no way implies an opinion by Standard & Poor's Corporation as to
a stock's attractiveness as an investment. "Standard & Poor's", "Standard &
Poor's 500" and "500" are trademarks of McGraw Hill, Inc. and have been licensed
for use by The Prudential Insurance Company of America and its affiliates and
subsidiaries. The Series Fund is not sponsored, endorsed, sold or promoted by
S&P and S&P makes no representation regarding the advisability of investing in
the Series Fund. Reference is made to the statement of additional information
which sets forth certain additional disclaimers and limitations of liabilities
on behalf of S&P.

The S&P 500 Index is a "weighted" index in which the weighting of each stock
depends on its relative total market value: its market price per share times the
number of shares outstanding. Because of this weighting, approximately 10% of
the S&P 500 Index's value is accounted for by the stocks of the five largest
companies by relative market value. As of December 31, 1995 those companies
were: General Electric Co., American Telephone & Telegraph Co., Exxon Corp.,
Coca-Cola Co., and Merck & Co., Inc.

This portfolio will not be "managed" in the traditional sense of using economic,
financial or market analysis to determine the stocks to be purchased by the
portfolio. Rather, the portfolio manager will purchase stocks for the portfolio
in proportion to their weighting in the S&P 500 Index. Thus, adverse financial
performance by a company will not result in reduction or elimination of the
portfolio's holdings of its stock and, conversely, superior financial
performance by a company will not lead the portfolio to increase its holdings of
the company's stock. If a stock held by this portfolio is eliminated from the
S&P 500 Index, the portfolio will sell its holdings of the stock regardless of
the prospects of the company. Because the portfolio will not be "managed" in the
traditional sense, portfolio turnover is expected to be low and is generally not
expected to exceed 10%. A 10% portfolio turnover rate would occur if one-tenth
of the portfolio's securities were sold and either repurchased or replaced
within 1 year. Because of the expected low turnover, transaction costs, such as
brokerage commissions, are also expected to be relatively low.

The following table shows the performance of the S&P 500 Index for the 25 years
ending in 1995. The period covered by this table is one of generally rising
stock prices, and the performance of the S&P 500 Index in this period should not
be viewed as a representation of any future performance by that index. In
addition, the fees and costs involved in the operation of the Stock Index
Portfolio mean that the performance of a share of stock in the portfolio may not
equal the performance of the S&P 500 Stock Index even if the assets held by the
portfolio do equal that performance.

*S&P 500 WITH DIVIDENDS REINVESTED
ANNUAL PERCENTAGE CHANGE
----------------------------------
1971 +14.56 1984 +6.10
1972 +18.90 1985 +31.57
1973 -14.77 1986 +18.56
1974 -26.39 1987 +5.10
1975 +37.16 1988 +16.61
1976 +23.57 1989 +31.69
1977 -7.42 1990 -3.10
1978 +6.38 1991 +30.47
1979 +18.20 1992 +7.61
1980 +32.27 1993 +10.08
1981 -5.01 1994 +1.32
1982 +21.44 1995 +37.58
1983 +22.38

Source: Standard & Poor's Corporation. Percentage change calculated in
accordance with specifications of SEC release number IA-327.

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In the eight full years since this portfolio was established its total return,
compared to that of the S&P 500 Index, was as follows:

Annual Percentage Change Total Return
S&P 500 with Stock Index Portfolio
Dividends Reinvested (after deduction of expenses)
------------------------ -----------------------------
1988 +16.61 +15.44
1989 +31.69 +30.93
1990 -3.10 -3.63
1991 +30.47 +29.72
1992 +7.61 +7.13
1993 +10.08 +9.66
1994 +1.32 +1.01
1995 +37.58 +37.06

Under normal circumstances, the portfolio generally intends to purchase all 500
stocks represented in the S&P 500 index and to invest its assets as fully in
those stocks (in proportion to their weighting in the index) as is feasible in
light of cash flows into and out of the portfolio. In order to reduce
transaction costs, a weighted investment in the 500 stocks comprising the S&P
500 index is most efficiently made in relatively large amounts. as additional
cash is received from the purchase of shares in the portfolio, it may be held
temporarily in short-term, high quality investments of the sort in which the
money market portfolio invests, until the portfolio has a sufficient amount of
assets in such investments to make an efficient weighted investment in the 500
stocks comprising the S&P 500 index. If net cash outflows from the portfolio are
anticipated, the portfolio may sell stocks (in proportion to their weighting in
the S&P 500 index) in amounts in excess of those needed to satisfy the cash
outflows and hold the balance of the proceeds in short-term investments if such
a transaction appears, taking into account transaction costs, to be more
efficient than selling only the amount of stocks needed to meet the cash
requirements. The portfolio will not, however, increase its holdings of cash in
anticipation of any decline in the value of the S&P 500 index or of the stock
markets generally. The portfolio will instead remain as fully invested in the
S&P 500 index stocks as feasible in light of its cash flow patterns during
periods of market declines as well as advances, and investors in the portfolio
thus run the risk of remaining fully invested in common stocks during a period
of general decline in the stock markets.

Tracking accuracy is measured by the difference between total return for the S&P
index with dividends reinvested and total return for the portfolio with
dividends reinvested before deductions of portfolio fees and expenses. Tracking
accuracy is monitored by the portfolio manager on a daily basis. All tracking
accuracy deviations are reviewed to determine the effectiveness of investment
policies and techniques.

If the portfolio does hold short-term investments as a result of the patterns of
cash flows to and from the portfolio, such holdings may cause its performance to
differ from that of the S&P 500 index. The portfolio will attempt to minimize
any such difference in performance through transactions involving stock index
futures contracts, options on stock indices, and/or options on stock index
future contracts. These derivative investment instruments are described under
OPTIONS ON STOCK INDICES, FUTURES CONTRACTS, and OPTIONS ON FUTURES CONTRACTS on
pages 17 through 19. The portfolio will not use such instruments for speculative
purposes or to hedge against any decline in the value of the stocks held in the
portfolio, but instead will employ them only as a temporary substitute for
investment of cash holdings directly in the 500 stocks when the portfolio's cash
holdings are too small to make such an investment in an efficient manner.

For example, if the portfolio's cash reserves are insufficient to invest
efficiently in another unit of the basket of stocks comprising the S&P 500
Index, the portfolio may purchase S&P 500 futures contracts to hedge against a
rise in the value of the stocks the portfolio intends to acquire. In its attempt
to minimize any difference in performance between the portfolio and the S&P 500
Index, the portfolio currently intends to engage in transactions involving the
S&P 500 Index futures contracts, the NYSE Composite Index futures contracts,
options on the S&P 500 Index, the S&P 100 Index, and the NYSE Composite Index,
and options on the S&P 500 Index futures contracts and the NYSE Composite Index
futures contracts. There can be no assurance that the portfolio's attempt to
minimize such performance difference through the use of any of these instruments
will succeed. See the statement of additional information for a more detailed
discussion of the manner in which the portfolio will employ these instruments
and for a description of other risks involved in the use of such instruments.

The above described investment policies and techniques of the Stock Index
Portfolio are non-fundamental and may be changed without shareholder approval if
it is determined that alternative investment techniques would be more effective
in achieving the portfolio's objective.

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<PAGE>

EQUITY INCOME PORTFOLIO. The objective of this portfolio is both current income
and capital appreciation through investment primarily in common stocks and
convertible securities that provide favorable prospects for investment income
returns above those of the Standard & Poor's 500 Stock Index or the NYSE
Composite Index. In selecting these securities, the portfolio will put emphasis
on earnings, balance sheet and cash flow analysis, and the relationships that
these factors have to the price and return of a given security. Under normal
circumstances, the portfolio intends to invest at least 65% of its total assets
in such securities.

The portfolio may invest the balance of its assets in other stocks, other
securities convertible into common stocks, debt securities (including money
market instruments), options on stocks and stock indices, and stock index
futures. The portfolio may under normal circumstances invest up to 35% of its
total assets in money market instruments of the type invested in by the Money
Market Portfolio and without limit when the portfolio's manager believes market
conditions warrant a temporary defensive posture or pending the investment of
proceeds from sales of the portfolio shares. These investments include entering
into repurchase agreements of the kind that the Money Market Portfolio may
utilize. In addition, up to 35% of the portfolio's total assets may be invested
in other fixed-income obligations. The portfolio anticipates that these will
primarily be rated A or better by Moody's or S&P. However, the portfolio may
also invest in lower-rated fixed-income securities, although it will not invest
in securities rated lower than CC or Ca by Moody's or S&P, respectively. The
risks of medium to lower rated securities, also known as high risk securities,
are described above in connection with the High Yield Bond Portfolio. A
description of debt ratings is contained in the Appendix to the statement of
additional information. The portfolio may also invest in non-rated fixed-income
securities which, in the opinion of the manager, are of a quality comparable to
rated securities in which the portfolio may invest.

To the extent permitted by applicable insurance law, the portfolio may invest up
to 30% of its total assets in non-United States currency denominated debt and
equity securities of foreign and U.S. issuers. The particular risks of
investments in foreign securities are described under FOREIGN SECURITIES on page
14.

In addition, the portfolio may: (i) purchase and sell options on equity
securities, stock indices and foreign currencies; (ii) purchase and sell stock
index and foreign currency futures contracts and options thereon; (iii) enter
into forward foreign currency exchange contracts; and (iv) purchase securities
on a when-issued or delayed delivery basis. These techniques are described on
pages 15 through 19, and further information about some of them is included in
the statement of additional information.

As a result of its investment policies, the portfolio's turnover rate may exceed
100%, although it is not expected to exceed 200%.

Warren Spitz, Managing Director, PMFIM, has been portfolio manager of the Equity
Income Portfolio since 1988. Mr. Spitz is also the portfolio manager of the
Prudential Equity Income Fund.

EQUITY PORTFOLIO. The objective of this portfolio is to achieve capital
appreciation through investment primarily in common stocks of companies,
including major established corporations as well as smaller capitalization
companies, that appear to offer attractive prospects of price appreciation that
is superior to broadly-based stock indices. Current income, if any, is
incidental.

Although the portfolio will be invested primarily in common stocks, it may also
invest to a limited extent in short, intermediate or long term debt, either
convertible or nonconvertible into common stock, as well as in nonconvertible
preferred stock. The portfolio will attempt to maintain a flexible approach to
the selection of common stocks of various types of companies whose valuations
appear to offer opportunities for above-average appreciation. Thus, the
portfolio may invest in securities of companies whose estimated growth in
earnings exceeds that projected for the market as a whole because of factors
such as expanding market share, new products or changes in market environment.
Or it may invest in "undervalued" securities which are often characterized by a
lack of investor recognition of the basic value of a company's assets.
Securities of companies with sales and earnings trends which are currently
unfavorable but which are expected to reverse may also be in the portfolio. The
effort to achieve price appreciation that is superior to broadly based stock
indices necessarily involves accepting a greater risk of declining values.
During periods when stock prices decline generally, it can be expected that the
value of the portfolio will also decline.

To the extent permitted by applicable insurance law, this portfolio may invest
up to 30% of its total assets in non-United States currency denominated common
stock and fixed-income securities convertible into common stock of foreign and
U.S. issuers. The particular risks of investments in foreign securities are
described under FOREIGN SECURITIES on page 14.

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<PAGE>

A portion of the portfolio may be invested in short-term debt obligations of the
kind held in the Money Market Portfolio as described in the Appendix to this
prospectus in order to make effective use of cash reserves pending investment in
common stocks.

Thomas Jackson, Managing Director, PMFIM, has been portfolio manager of the
Equity Portfolio since 1990. Mr. Jackson is also portfolio manager of the
Prudential Equity Fund, Inc.

PRUDENTIAL JENNISON PORTFOLIO. The objective of the Prudential Jennison
Portfolio is to achieve long-term growth of capital through investment primarily
in equity securities of established companies with above-average growth
prospects. Current income, if any, is incidental.

In order to achieve this objective, the Prudential Jennison Portfolio will
follow a policy of selecting stocks on a company-by-company basis primarily
through the use of fundamental analysis. The portfolio manager will look for
companies that have demonstrated growth in earnings and sales, high returns on
equity and assets, or other strong financial characteristics, and in the opinion
of the portfolio manager, are attractively valued. These companies tend to have
a unique market niche, a strong new product profile or superior management.
Under normal market conditions, at least 65% of the value of the total assets of
the portfolio will be invested in common stocks and preferred stocks of
companies which exceed $1 billion in market capitalization.

The portfolio may invest up to 35% of its total assets in: (i) common stocks,
preferred stocks, and other equity-related securities of companies that are
undergoing changes in management or product and marketing dynamics which have
not yet been reflected in reported earnings but which are expected to impact
earnings in the intermediate term -- these securities often lack investor
recognition and are often favorably valued; (ii) other equity-related
securities; (iii) with respect to a maximum of 30% of its total assets, common
stocks, preferred stocks and other equity-related securities of non-United
States currency denominated issuers or American Depository Receipts ("ADRs");
(iv) investment grade fixed income securities and mortgage-backed securities,
including lower rated securities [rated in the fourth highest rating category by
a nationally recognized rating service (e.g. Baa by Moody's Investor Services or
BBB by Standard & Poor's)] or, if not rated, determined by the portfolio manager
to be of comparable quality to securities so rated. A description of debt
ratings is contained in the Appendix to the statement of additional information;
and (v) obligations issued or guaranteed by the U.S. Government, its agencies
and instrumentalities.

In addition, the portfolio may: (i) purchase and sell options on equity
securities, stock indices, and foreign currencies; (ii) lend its portfolio
securities; (iii) purchase and sell stock index and foreign currency futures
contracts and options thereon; (iv) enter into forward foreign currency exchange
contracts; and (v) enter into repurchase agreements and purchase securities on a
when-issued or delayed delivery basis. These techniques are described on pages
15 through 19, and further information about some of them is included in the
statement of additional information.

The effort to achieve superior investment returns necessarily involves a risk of
exposure to declining values. Securities in which the portfolio may primarily
invest have historically been more volatile than the Standard & Poor's 500
Composite Stock Price Index. Accordingly, during periods when stock prices
decline generally, it can be expected that the value of the portfolio will
decline more than the market indices.

David Poiesz, Director and Senior Vice President of Jennison Associates Capital
Corp., has been portfolio manager of the Prudential Jennison Portfolio since its
inception in 1995. Mr. Poiesz also manages the Prudential Institutional Growth
Fund and the Prudential Jennison Fund. Mr. Poiesz joined Jennison Associates in
1983 as an equity research analyst and has been an equity portfolio manager
since 1991.

GLOBAL PORTFOLIO. The objective of this portfolio is long-term growth of capital
through investment primarily in common stocks and common stock equivalents (such
as convertible debt securities) of foreign and domestic issuers. Current income,
if any, is incidental.

The portfolio is intended to provide investors with the opportunity to invest in
a portfolio of securities of companies located throughout the world. In making
the allocation of assets among the various countries and geographic regions, the
portfolio manager ordinarily considers such factors as prospects for relative
economic growth between foreign countries; expected levels of inflation and
interest rates; government policies influencing business conditions; the range
of individual investment opportunities available to international investors; and
other pertinent financial, tax, social, political and national factors--all in
relation to the prevailing prices of the securities in each country or region.

There are, generally, no geographic limitations on companies in which the
portfolio may invest. Depending upon market conditions, the portfolio may be
invested primarily in foreign securities. Investments may be made in companies
based in the Pacific Basin (for example, Japan, Australia, New Zealand,
Singapore, Malaysia, and Hong Kong) and Western Europe (for example, the United
Kingdom, Spain, Germany, Switzerland, the Netherlands, France, and Scandinavia),
as well as the United States, Canada, and such other areas and countries as the
portfolio

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<PAGE>

manager may determine from time to time. The portfolio may seek to hedge its
position in foreign currencies as more fully described herein.

The portfolio is not required to maintain any particular geographic or currency
mix of its investments. The portfolio intends to maintain investments in at
least three countries (including the United States), but may, when market
conditions warrant, invest up to 35% of its assets in companies located in any
one country (other than the United States).

In analyzing companies for investment, the portfolio manager ordinarily looks
for one or more of the following characteristics: prospects for above-average
earnings growth per share; high return on invested capital; healthy balance
sheet; sound financial and accounting policies and overall financial strength;
strong competitive advantages; effective research and product development and
marketing; efficient service; pricing flexibility; strength of management; and
general operating characteristics which will enable the companies to compete
successfully in their marketplace--all in relation to the prevailing prices of
the securities of such companies.

Investing in securities of foreign companies and countries involves special
risks. The particular risks of investments in foreign securities are described
under FOREIGN SECURITIES on page 14.

When the portfolio manager believes market conditions dictate a temporary
defensive strategy, or during periods of structuring and restructuring the
portfolio, the portfolio may invest without limit in money market investments of
the kind in which the Money Market Portfolio invests, including repurchase
agreements.

In addition, the portfolio may: (i) purchase and sell options on equity
securities, stock indices and foreign currencies; (ii) purchase and sell stock
index, interest rate and foreign currency futures contracts and options thereon;
(iii) enter into forward foreign currency exchange contracts; and (iv) purchase
securities on a when-issued or delayed delivery basis. These techniques are
described on pages 14 through 19, and further information about some of them is
included in the statement of additional information.

The operating expense ratio of the portfolio can be expected to be significantly
higher than that of a fund investing exclusively in domestic securities since
the expenses of the portfolio, such as custodial, valuation and communication
costs, as well as the rate of the investment management fee (0.75% of the
portfolio's average daily net assets), though similar to such expenses of other
global funds, are higher than those generally incurred by funds investing solely
in the securities of U.S. issuers.

As a result of its investment policies, the portfolio's turnover rate may exceed
100% although it is not expected to exceed 200%.

Daniel Duane, Managing Director, PMFIM, has been the portfolio manager of the
Global Portfolio since 1990. Mr. Duane also manages several mutual funds
including the Prudential Global Fund, Inc.

CONVERTIBLE SECURITIES

The Equity Income, Equity, Prudential Jennison, and Global Portfolios may invest
in convertible securities and such securities may constitute a major part of the
holdings of the Equity Income and Global Portfolios. A convertible security is a
fixed-income security (a bond or preferred stock) which may be converted at a
stated price within a specified period of time into a certain quantity of the
common stock of the same or a different issuer. Convertible securities are
senior to common stocks in a corporation's capital structure, but are usually
subordinated to similar nonconvertible securities. While providing a fixed
income stream (generally higher in yield than the income derivable from a common
stock but lower than that afforded by a similar nonconvertible security), a
convertible security also affords an investor the opportunity, through its
conversion feature, to participate in the capital appreciation attendant upon a
market price advance in the convertible security's underlying common stock. The
price of a convertible security tends to increase as the market value of the
underlying stock rises, whereas it tends to decrease as the market value of the
underlying stock declines. While no securities investment is without risk,
investments in convertible securities generally entail less risk than
investments in the common stock of the same issuer.

FOREIGN SECURITIES

The Global Portfolio may invest up to 100% of its total assets in common stock
and convertible securities denominated in a foreign currency and issued by
foreign or domestic issuers. The Diversified Bond and High Yield Bond Portfolios
may each invest up to 20% of their assets in United States currency denominated
debt securities issued outside the United States by foreign or domestic issuers.
To the extent permitted by applicable law, the Equity Income Portfolio may
invest up to 30% of its total assets in debt and equity securities denominated
in a foreign currency and issued by foreign or domestic issuers. Further, to the
extent permitted by applicable insurance law, the Equity and Prudential Jennison
Portfolios may invest up to 30% of their total assets in non-United States
currency denominated common stock and fixed-income securities convertible into
common stock of foreign and U.S. issuers. Securities issued outside the United
States and not publicly traded in the United States, as well as

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American Depository Receipts ("ADRs"), and securities denominated in a foreign
currency are referred to collectively in this prospectus as "foreign
securities."

ADRs are U.S. dollar-denominated certificates issued by a United States bank or
trust company and represent the right to receive securities of a foreign issuer
deposited in a domestic bank or foreign branch of a United States bank and
traded on a United States exchange or in an over-the-counter market. Investment
in ADRs has certain advantages over direct investment in the underlying foreign
securities because they are easily transferable, have readily available market
quotations, and the foreign issuers are usually subject to comparable auditing,
accounting, and financial reporting standards as domestic issuers.

Foreign securities involve certain risks, which should be considered carefully
by an investor. These risks include political or economic instability in the
country of the issuer, the difficulty of predicting international trade
patterns, the possibility of imposition of exchange controls and, in the case of
securities not denominated in United States currency, the risk of currency
fluctuations. Such securities may be subject to greater fluctuations in price
than domestic securities. Under certain market conditions, foreign securities
may be less liquid than domestic securities. In addition, there may be less
publicly available information about a foreign company than about a domestic
company. Foreign companies generally are not subject to uniform accounting,
auditing, and financial reporting standards comparable to those applicable to
domestic companies. There is generally less government regulation of securities
exchanges, brokers, and listed companies abroad than in the United States, and,
with respect to certain foreign countries, there is a possibility of
expropriation, confiscatory taxation or diplomatic developments which could
affect investment in those countries. Finally, in the event of a default of any
foreign debt obligations, it may be more difficult for a portfolio to obtain or
to enforce a judgment against the issuers of such securities.

If the security is denominated in foreign currency, it may be affected by
changes in currency rates and in exchange control regulations, and costs may be
incurred in connection with conversions between currencies. The portfolios that
may invest in foreign securities may, but need not, enter into forward foreign
currency exchange contracts for the purchase or sale of foreign currency for
hedging purposes, including: locking-in the U.S. dollar price equivalent of
interest or dividends to be paid on such securities which are held by the
portfolio; and protecting the U.S. dollar value of such securities which are
held by the portfolio. The portfolios will not enter into such forward contracts
or maintain a net exposure to such contracts where the consummation of the
contracts would obligate the portfolio to deliver an amount of foreign currency
in excess of the value of the portfolio's portfolio securities or other assets
denominated in that currency. See FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS in
the statement of additional information. In addition, the portfolios may, for
hedging purposes, enter into certain transactions involving options on foreign
currencies, foreign currency futures contracts and options on foreign currency
futures contracts. See OPTIONS ON FOREIGN CURRENCIES, FUTURES CONTRACTS, and
OPTIONS ON FUTURES CONTRACTS on pages 17 through 19.

OPTIONS ON EQUITY SECURITIES

The Equity Income, Equity, Prudential Jennison, and Global Portfolios may
purchase and write (i.e., sell) put and call options on equity securities that
are traded on securities exchanges, are listed on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), or that result from
privately negotiated transactions with broker-dealers ("OTC options"). A call
option is a short-term contract pursuant to which the purchaser or holder, in
return for a premium paid, has the right to buy the equity security underlying
the option at a specified exercise price at any time during the term of the
option. The writer of the call option, who receives the premium, has the
obligation, upon exercise of the option, to deliver the underlying equity
security against payment of the exercise price. A put option is a similar
contract which gives the purchaser or holder, in return for a premium, the right
to sell the underlying equity security at a specified price during the term of
the option. The writer of the put, who receives the premium, has the obligation
to buy the underlying equity security at the exercise price upon exercise by the
holder of the put.

A portfolio will write only "covered" options on stocks. A call option is
covered if: (1) the portfolio owns the security underlying the option; or (2)
the portfolio has an absolute and immediate right to acquire that security
without additional cash consideration (or for additional cash consideration held
in a segregated account by its custodian) upon conversion or exchange of other
securities it holds; or (3) the portfolio holds on a share-for-share basis a
call on the same security as the call written where the exercise price of the
call held is equal to or less than the exercise price of the call written or
greater than the exercise price of the call written if the difference is
maintained by the portfolio in cash, Treasury bills or other high grade
short-term debt obligations in a segregated account with its custodian. A put
option is covered if: (1) the portfolio deposits and maintains with its
custodian in a segregated account cash, U.S. Government securities or other
liquid high-grade debt obligations having a value equal to or greater than the
exercise price of the option; or (2) the portfolio holds on a share-for-share
basis a put on the same security as the put written where the exercise price of
the put held is equal to or greater than the exercise price of the put written
or less than the exercise price if the difference is maintained by the portfolio
in cash, Treasury bills or other high grade short-term debt obligations in a
segregated account with its custodian.

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The Equity Income, Equity, Prudential Jennison, and Global Portfolios may also
purchase "protective puts" (i.e., put options acquired for the purpose of
protecting a portfolio security from a decline in market value). In exchange for
the premium paid for the put option, the portfolio acquires the right to sell
the underlying security at the exercise price of the put regardless of the
extent to which the underlying security declines in value. The loss to the
portfolio is limited to the premium paid for, and transaction costs in
connection with, the put plus the initial excess, if any, of the market price of
the underlying security over the exercise price. However, if the market price of
the security underlying the put rises, the profit the portfolio realizes on the
sale of the security will be reduced by the premium paid for the put option less
any amount (net of transaction costs) for which the put may be sold. Similar
principles apply to the purchase of puts on debt securities and stock indices,
as described under OPTIONS ON DEBT SECURITIES, page 16 and OPTIONS ON STOCK
INDICES, page 17.

These portfolios may purchase call options for hedging and investment purposes.
No portfolio intends to invest more than 5% of its net assets at any one time in
the purchase of call options on stocks. These portfolios may also purchase
putable and callable equity securities, which are securities coupled with a put
or a call option provided by the issuer.

If the writer of an exchange-traded option wishes to terminate the obligation,
he or she may effect a "closing purchase transaction" by buying an option of the
same series as the option previously written. Similarly, the holder of an
exchange-traded option may liquidate his or her position by exercise of the
option or by effecting a "closing sale transaction" by selling an option of the
same series as the option previously purchased. A portfolio will realize a
profit from a closing transaction if the price of the transaction is less than
the premium received from writing the option or is more than the premium paid to
purchase the option. Because increases in the market price of a call option will
generally reflect increases in the market price of the underlying security, any
loss resulting from a closing purchase transaction with respect to a call option
is likely to be offset in whole or in part by appreciation of the underlying
equity security owned by the portfolio. Unlike exchange-traded options, OTC
options generally do not have a continuous liquid market. Consequently, the
portfolio will generally be able to realize the value of an OTC option it has
purchased only by exercising it or reselling it to the dealer who issued it.
Similarly, when the portfolio writes an OTC option, it generally will be able to
close out the OTC option prior to its expiration only by entering into a closing
purchase transaction with the dealer to which the portfolio originally wrote the
OTC option. There is, in general, no guarantee that closing purchase or closing
sale transactions can be effected.

There are certain special risks associated with the portfolios' transactions in
stock options, in addition to a risk that the market value of the security will
move adversely to the portfolio's option position. These risks, which relate
primarily to liquidity, are discussed in the statement of additional
information.

OPTIONS ON DEBT SECURITIES

The Diversified Bond and High Yield Bond Portfolios may purchase and write (i.e.
sell) put and call options on debt securities (including U.S. Government debt
securities) that are traded on U.S. securities exchanges or that result from
privately negotiated transactions with primary U.S. Government securities
dealers recognized by the Federal Reserve Bank of New York ("OTC options").
Options on debt are similar to options on stock, except that the option holder
has the right to take or make delivery of a debt security, rather than stock.

A portfolio will write only "covered" options. Options on debt securities are
covered in the same manner as options on stocks, discussed above, except that,
in the case of call options on U.S. Treasury Bills, the portfolio might own U.S.
Treasury Bills of a different series from those underlying the call option, but
with a principal amount and value corresponding to the option contract amount
and a maturity date no later than that of the securities deliverable under the
call option. The principal reason for a portfolio to write an option on one or
more of its securities is to realize through the receipt of the premiums paid by
the purchaser of the option a greater current return than would be realized on
the underlying security alone. Calls on debt securities will not be written
when, in the opinion of The Prudential, interest rates are likely to decline
significantly, because under those circumstances the premium received by writing
the call likely would not fully offset the foregone appreciation in the value of
the underlying security.

These portfolios may also write straddles (i.e., a combination of a call and a
put written on the same security at the same strike price where the same issue
of the security is considered "cover" for both the put and the call). In such
cases, the portfolio will also segregate or deposit for the benefit of the
portfolio's broker cash or liquid high-grade debt obligations equivalent to the
amount, if any, by which the put is "in the money." It is contemplated that each
portfolio's use of straddles will be limited to 5% of the portfolio's net assets
(meaning that the securities used for cover or segregated as described above
will not exceed 5% of the portfolio's net assets at the time the straddle is
written). The writing of a call and a put on the same security at the same
strike price where the call and the put are covered by different securities is
not considered a straddle for purposes of this limit.

These portfolios may purchase "protective puts" in an effort to protect the
value of a security that it owns against a substantial decline in market value.
Protective puts are described in OPTIONS ON EQUITY SECURITIES, page 15. A
portfolio may wish to protect certain portfolio securities against a decline in
market value at a time when put

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options on those particular securities are not available for purchase. A
portfolio may therefore purchase a put option on securities other than those it
wishes to protect even though it does not hold such other securities in its
portfolio. While changes in the value of the put option should generally offset
changes in the value of the securities being hedged, the correlation between the
two values may not be as close in these transactions as in transactions in which
the portfolio purchases a put option on an underlying security it owns.

These portfolios may also purchase call options on debt securities for hedging
or investment purposes. No portfolio currently intends to invest more than 5% of
its net assets at any one time in the purchase of call options on debt
securities. A portfolio may also purchase putable and callable debt securities,
which are securities coupled with a put or call option provided by the issuer.

If the writer of an exchange-traded option wishes to terminate the obligation,
he or she may effect a "closing purchase transaction" or a "closing sale
transaction" in a manner similar to that discussed above in connection with
options on equity securities.

The staff of the Securities and Exchange Commission has taken the position that
purchased OTC options and the assets used as "cover" for written OTC options are
illiquid for purposes of a portfolio's 15% limitation on investment in illiquid
securities. However, pursuant to the terms of certain no-action letters issued
by the staff, the securities used as cover for written OTC options may be
considered liquid provided that the portfolio sells OTC options only to
qualified dealers who agree that the portfolio may repurchase any OTC option it
writes for a maximum price to be calculated by a predetermined formula. In such
cases, the OTC option would be considered illiquid only to the extent that the
maximum repurchase price under the formula exceeds the intrinsic value of the
option.

There are certain risks associated with the portfolios' transactions in debt
options, in addition to a risk that the market value of the security will move
adversely to the portfolio's option position. These risks, which relate
primarily to liquidity, are discussed in the statement of additional
information.

OPTIONS ON STOCK INDICES

The Equity Income, Equity, Prudential Jennison, and Global Portfolios may
purchase and sell put and call options on stock indices traded on securities
exchanges, listed on NASDAQ or that result from privately negotiated
transactions with broker-dealers ("OTC options"). The Stock Index Portfolio may
utilize options on stock indices by constructing "put/call" combinations that
are economically comparable to a long stock index futures position, as described
in the statement of additional information. Options on stock indices are similar
to options on stock except that, rather than the right to take or make delivery
of stock at a specified price, an option on a stock index gives the holder the
right to receive, upon exercise of the option, an amount of cash if the closing
level of the stock index upon which the option is based is greater than, in the
case of a call, or less than, in the case of a put, the exercise price of the
option. This amount of cash is equal to such difference between the closing
price of the index and the exercise price of the option expressed in dollars
times a specified multiple (the "multiplier"). The writer of the option is
obligated, in return for the premium received, to make delivery of this amount.
Unlike stock options, all settlements are in cash, and gain or loss depends on
price movements in the stock market generally (or in a particular industry or
segment of the market) rather than price movements in individual stocks.

The multiplier for an index option performs a function similar to the unit of
trading for a stock option. It determines the total dollar value per Contract of
each point in the difference between the exercise price of an option and the
current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.

A portfolio will write only "covered" options on stock indices. The manner in
which these options are covered is discussed in the statement of additional
information.

These portfolios may purchase put and call options for hedging and investment
purposes. No portfolio intends to invest more than 5% of its net assets at any
time in the purchase of puts and calls on stock indices. A portfolio may effect
closing sale and purchase transactions involving options on stock indices, as
described above in connection with stock options.

OPTIONS ON FOREIGN CURRENCIES

The Equity Income, Equity, Prudential Jennison, and Global Portfolios may
purchase and write put and call options on foreign currencies traded on U.S. or
foreign securities exchanges or boards of trade for hedging purposes in a manner
similar to that in which forward foreign currency exchange contracts (discussed
under FOREIGN SECURITIES, page 14 and futures contracts on foreign currencies
(discussed under FUTURES CONTRACTS, page 18) will be employed. Options on
foreign currencies are similar to options on stock, except that the option
holder has the right to take or make delivery of a specified amount of foreign
currency, rather than stock.

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A portfolio may purchase and write options to hedge the portfolio's securities
denominated in foreign currencies. If there is a decline in the dollar value of
a foreign currency in which the portfolio's securities are denominated, the
dollar value of such securities will decline even though the foreign currency
value remains the same. To hedge against the decline of the foreign currency, a
portfolio may purchase put options on such foreign currency. If the value of the
foreign currency declines, the gain realized on the put option would offset, in
whole or in part, the adverse effect such decline would have on the value of the
portfolio's securities. Alternatively, a portfolio may write a call option on
the foreign currency. If the foreign currency declines, the option would not be
exercised and the decline in the value of the portfolio securities denominated
in such foreign currency would be offset in part by the premium the portfolio
received for the option.

If, on the other hand, the portfolio manager anticipates purchasing a foreign
security and also anticipates a rise in such foreign currency (thereby
increasing the cost of such security), a portfolio may purchase call options on
the foreign currency. The purchase of such options could offset, at least
partially, the effects of the adverse movements of the exchange rates.
Alternatively, a portfolio could write a put option on the currency and, if the
exchange rates move as anticipated, the option would expire unexercised.

A portfolio's successful use of currency exchange options on foreign currencies
depends upon the manager's ability to predict the direction of the currency
exchange markets and political conditions, which requires different skills and
techniques than predicting changes in the securities markets generally. For
instance, if the currency being hedged has moved in a favorable direction, the
corresponding appreciation of the portfolio's securities denominated in such
currency would be partially offset by the premiums paid on the options. Further,
if the currency exchange rate does not change, the portfolio net income would be
less than if the portfolio had not hedged since there are costs associated with
options.

The use of these options is subject to various additional risks. The correlation
between movements in the price of options and the price of the currencies being
hedged is imperfect. The use of these instruments will hedge only the currency
risks associated with investments in foreign securities, not market risks. The
portfolio's ability to establish and maintain positions will depend on market
liquidity. The ability of the portfolio to close out an option depends upon a
liquid secondary market. There is no assurance that liquid secondary markets
will exist for any particular option at any particular time.

FUTURES CONTRACTS

The Stock Index, Equity Income, Equity, Prudential Jennison, and Global
Portfolios may, to the extent permitted by applicable regulations, attempt to
reduce the risk of investment in equity securities by hedging a portion of their
equity portfolios through the use of stock index futures contracts. A stock
index futures contract is an agreement in which the seller of the contract
agrees to deliver to the buyer an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock index at the
close of the last trading day of the contract and the price at which the
agreement is made. No physical delivery of the underlying stocks in the index is
made.

The Diversified Bond, High Yield Bond, and Global Portfolios may, to the extent
permitted by applicable regulations, purchase and sell for hedging purpose
futures contracts on interest-bearing securities (such as U.S. Treasury bonds
and notes) or interest rate indices (referred to collectively as "interest rate
futures contracts").

The Equity Income, Equity, Prudential Jennison, and Global Portfolios may, to
the extent permitted by applicable regulations, purchase and sell futures
contracts on foreign currencies or groups of foreign currencies for hedging
purposes.

When the futures contract is entered into, each party deposits with a broker or
in a segregated custodial account approximately 5% of the contract amount,
called the "initial margin." Subsequent payments to and from the broker, called
the "variation margin," will be made on a daily basis as the underlying
security, index or rate fluctuates making the long and short positions in the
futures contracts more or less valuable, a process known as "marking to the
market." The Board of Directors currently intends to limit futures trading so
that a portfolio will not enter into futures contracts or related options if the
aggregate initial margins and premiums exceed 5% of the fair market value of its
assets, after taking into account unrealized profits and unrealized losses on
any such contracts and options.

A portfolio's successful use of futures contracts depends upon the investment
manager's ability to predict the direction of the relevant market. The
correlation between movement in the price of the futures contract and the price
of the securities or currencies being hedged is imperfect. The ability of a
portfolio to close out a futures position depends on a liquid secondary market.
There is no assurance that liquid secondary markets will exist for any
particular futures contract at any particular time.

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OPTIONS ON FUTURES CONTRACTS

To the extent permitted by applicable insurance law and federal regulations, the
Stock Index, Equity Income, Equity, Prudential Jennison, and Global Portfolios
may enter into certain transactions involving options on stock index futures
contracts; the Diversified Bond, High Yield Bond and Global Portfolios may enter
into certain transactions involving options on interest rate futures contracts;
and the Equity Income, Equity, Prudential Jennison, and Global Portfolios may
enter into certain transactions involving options on foreign currency futures
contracts. An option on a futures contract gives the purchaser or holder the
right, but not the obligation, to assume a position in a futures contract (a
long position if the option is a call and a short position if the option is a
put) at a specified price at any time during the option exercise period. The
writer of the option is required upon exercise to assume an offsetting futures
position (a short position if the option is a call and long position if the
option is a put). Upon exercise of the option, the assumption of offsetting
futures positions by the writer and holder of the option will be accomplished by
delivery of the accumulated balance in the writer's futures margin account which
represents the amount by which the market price of the futures contract, at
exercise, exceeds, in the case of a call, or is less than, in the case of a put,
the exercise price of the option on the futures contract. As an alternative to
exercise, the holder or writer of an option may terminate a position by selling
or purchasing an option of the same series. There is no guarantee that such
closing transactions can be effected. The Stock Index Portfolio intends to
utilize options on stock index futures contracts by constructing "put/call"
combinations that are economically comparable to a long stock index futures
position, as described in the statement of additional information. The other
portfolios intend to utilize options on futures contracts for the same purposes
that they use the underlying futures contracts.

REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS

The Diversified Bond and High Yield Bond Portfolios may use reverse repurchase
agreements and dollar rolls. The Money Market Portfolio and the money market
portion of any portfolio may use reverse repurchase agreements. Reverse
repurchase agreements involve the sale of securities held by a portfolio with an
agreement by the portfolio to repurchase the same securities at an agreed upon
price and date. During the reverse repurchase period, the portfolio often
continues to receive principal and interest payments on the sold securities. The
terms of each agreement reflect a rate of interest for use of the funds for the
period, and thus these agreements have the characteristics of borrowing by the
portfolio. Dollar rolls involve sales by a portfolio of securities for delivery
in the current month with a simultaneous contract to repurchase substantially
similar securities (same type and coupon) from the same party at an agreed upon
price and date. During the roll period, the portfolio forgoes principal and
interest paid on the securities. A portfolio is compensated by the difference
between the current sales price and the forward price for the future purchase
(often referred to as the "drop") as well as by the interest earned on the cash
proceeds of the initial sale. A "covered roll" is a specific type of dollar roll
for which there is an offsetting cash position or a cash equivalent security
position which matures on or before the forward settlement date of the dollar
roll transaction. A portfolio will establish a segregated account with its
custodian in which it will maintain cash, U.S. Government securities or other
liquid high-grade debt obligations equal in value to its obligations in respect
of reverse repurchase agreements and dollar rolls. Reverse repurchase agreements
and dollar rolls involve the risk that the market value of the securities
retained by the portfolio may decline below the price of the securities the
portfolio has sold but is obligated to repurchase under the agreement. In the
event the buyer of securities under a reverse repurchase agreement or dollar
roll files for bankruptcy or becomes insolvent, the portfolio's use of the
proceeds of the agreement may be restricted pending a determination by the other
party, or its trustee or receiver, whether to enforce the portfolio's obligation
to repurchase the securities. The Diversified Bond and High Yield Bond
Portfolios will not obligate more than 30% of their net assets in connection
with reverse repurchase agreements and dollar rolls. No other portfolio will
obligate more than 10% of its net assets in connection with reverse repurchase
agreements.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

From time to time, in the ordinary course of business, the Diversified Bond,
High Yield Bond, Equity Income, Equity, Prudential Jennison, and Global
Portfolios may purchase or sell securities on a when-issued or delayed delivery
basis, that is, delivery and payment can take place a month or more after the
date of the transaction. Each of these portfolios will limit such purchases to
those in which the date for delivery and payment falls within 120 days of the
date of the commitment. A portfolio will make commitments for such when-issued
transactions only with the intention of actually acquiring the securities. A
portfolio's custodian will maintain, in a separate account, cash, U.S.
Government securities or other high grade debt obligations having a value equal
to or greater than such commitments. If a portfolio 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.

In addition, the Money Market Portfolio and short-term portions of the other
portfolios may purchase money market securities on when-issued or delayed
delivery basis on the terms set forth in the Appendix to this prospectus.

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SHORT SALES

The Diversified Bond and High Yield Bond Portfolios may sell securities they do
not own in anticipation of a decline in the market value of those securities
("short sales"). To complete such a transaction, the portfolio will borrow the
security to make delivery to the buyer. The portfolio is then obligated to
replace the security borrowed by purchasing it at the market price at the time
of replacement. The price at such time may be more or less than the price at
which the security was sold by the portfolio. Until the security is replaced,
the portfolio is required to pay to the lender any interest which accrues during
the period of the loan. To borrow the security the portfolio may be required to
pay a premium which would increase the cost of the security sold. The proceeds
of the short sale will be retained by the broker to the extent necessary to meet
margin requirements until the short position is closed out. Until the portfolio
replaces the borrowed security, it will (a) maintain in a segregated account
cash or U.S. Government securities at such a level that the amount deposited in
the account plus the amount deposited with the broker as collateral will equal
the current market value of the security sold short and will not be less than
the market value of the security at the time it was sold short or (b) otherwise
cover its short position.

The portfolio will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and the date on which
the portfolio replaces the borrowed security. The portfolio will realize a gain
if the security declines in price between those dates. This result is the
opposite of what one would expect from a cash purchase of a long position in a
security. The amount of any gain will be decreased, and the amount of any loss
will be increased, by the amount of any premium or interest paid in connection
with the short sale. No more than 25% of any portfolio's net assets will be,
when added together: (i) deposited as collateral for the obligation to replace
securities borrowed to effect short sales and (ii) allocated to segregated
accounts in connection with short sales.

SHORT SALES AGAINST THE BOX

All portfolios (other than the Money Market Portfolio) may make short sales of
securities or maintain a short position, provided that at all times when a short
position is open the portfolio owns an equal amount of such securities or
securities convertible into or exchangeable, with or without payment of any
further consideration, for an equal amount of the securities of the same issuer
as the securities sold short (a "short sale against the box"); provided, that if
further consideration is required in connection with the conversion or exchange,
cash or U.S. Government securities in an amount equal to such consideration must
be put in a segregated account.

INTEREST RATE SWAPS

The Diversified Bond and High Yield Bond Portfolios may use interest rate swaps
to increase or decrease a portfolio's exposure to long- or short-term interest
rates. No portfolio currently intends to invest more than 5% of its net assets
at any one time in interest rate swaps. For more information, see the statement
of additional information.

LOANS OF PORTFOLIO SECURITIES

All of the portfolios except the Money Market Portfolio may from time to time
lend the securities they hold to broker-dealers, provided that such loans are
made pursuant to written agreements and are continuously secured by collateral
in the form of cash, U.S. Government securities or irrevocable standby letters
of credit in an amount equal to at least the market value at all times of the
loaned securities plus the accrued interest and dividends. During the time
securities are on loan, the portfolio will continue to receive the interest and
dividends or amounts equivalent thereto, on the loaned securities while
receiving a fee from the borrower or earning interest on the investment of the
cash collateral. The right to terminate the loan will be given to either party
subject to appropriate notice. Upon termination of the loan, the borrower will
return to the lender securities identical to the loaned securities. The
portfolio will not have the right to vote securities on loan, but would
terminate the loan and retain the right to vote if that were considered
important with respect to the investment.

The primary risk in lending securities is that the borrower may become insolvent
on a day on which the loaned security is rapidly advancing in price. In such
event, if the borrower fails to return the loaned securities, the existing
collateral might be insufficient to purchase back the full amount of the
security loaned, and the borrower would be unable to furnish additional
collateral. The borrower would be liable for any shortage; but the portfolio
would be an unsecured creditor with respect to such shortage and might not be
able to recover all or any of it. However, this risk may be minimized by a
careful selection of borrowers and securities to be lent and by monitoring
collateral.

No portfolio will lend securities to broker-dealers affiliated with The
Prudential, including Prudential Securities Incorporated. This will not affect a
portfolio's ability to maximize its securities lending opportunities.

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INVESTMENT RESTRICTIONS APPLICABLE
TO THE PORTFOLIOS

The Series Fund is subject to certain investment restrictions which are
fundamental to the operations of the Series Fund and may not be changed except
with the approval of a majority vote (as defined under INVESTMENT OBJECTIVES AND
POLICIES OF THE PORTFOLIOS on page 6) of the persons participating in the
affected portfolio.

The investments of the various portfolios are generally subject to certain
additional restrictions under state laws. In the event of future amendments to
the applicable statutes, each portfolio will comply, without the approval of the
shareholders, with the statutory requirements as so modified.

For a detailed discussion of investment restrictions applicable to the Series
Fund, see INVESTMENT RESTRICTIONS in the statement of additional information.

INVESTMENT MANAGEMENT ARRANGEMENTS
AND EXPENSES

The Series Fund has entered into an Investment Advisory Agreement with The
Prudential under which The Prudential will, subject to the direction of the
Board of Directors of the Series Fund, be responsible for the management of the
Series Fund, and provide investment advice and related services to each
portfolio. The directors, in addition to reviewing the actions of the Series
Fund's investment advisor, decide upon matters of general policy. The Series
Fund's officers conduct and supervise the daily business operations of the
Series Fund.

The Prudential, founded in 1875 under the laws of New Jersey, is subject to
regulation by the Department of Insurance of the State of New Jersey as well as
by the insurance departments of all the other states and jurisdictions in which
it does business. The Prudential is registered both as a broker-dealer under the
Securities Exchange Act of 1934 and as an investment advisor under the
Investment Advisers Act of 1940. The Prudential's principal business address is
Prudential Plaza, Newark, New Jersey 07102-3777.

The Prudential manages the assets that it owns as well as those of various
separate accounts established by The Prudential and those held by other
investment companies for which it acts as investment advisor. Total assets under
management as of December 31, 1995 were over $314 billion which includes over
$219 billion owned by The Prudential and approximately $95 billion of external
assets under The Prudential's management.

Subject to The Prudential's supervision, substantially all of the investment
advisory services provided to the Series Fund by The Prudential are furnished,
with respect to seven of the eight Series Fund portfolios, by its wholly-owned
subsidiary PIC, pursuant to the Service Agreement between The Prudential and
PIC. The Agreement provides that a portion of the fee received by The Prudential
for providing investment advisory services will be paid to PIC. Investment
advisory services with respect to the Prudential Jennison Portfolio provided by
The Prudential are furnished by another wholly-owned subsidiary, Jennison
Associates Capital Corp. ("Jennison"), pursuant to an Investment Subadvisory
Agreement between The Prudential and Jennison. That Agreement provides that a
portion of the fee received by The Prudential for providing investment advisory
services to the Prudential Jennison Portfolio will be paid to Jennison. PIC and
Jennison are both registered as investment advisors under the Investment
Advisers Act of 1940.

Under the Investment Advisory Agreement, The Prudential receives an investment
management fee as compensation for its services to the Series Fund. The fee is a
daily charge, payable quarterly, equal to an annual percentage of the average
daily net assets of each individual portfolio.

The investment management fee for the Stock Index Portfolio is equal to an
annual rate of 0.35% of the average daily net assets of the portfolio. For the
Money Market, Diversified Bond, and Equity Income Portfolios that fee is equal
to an annual rate of 0.4% of the average daily net assets of each of the
portfolios. For the Equity Portfolio, the fee is equal to an annual rate of
0.45% of the average daily net assets of the portfolio. The fee for the High
Yield Bond Portfolio is equal to an annual rate of 0.55% of the average daily
net assets of the portfolio. For the Prudential Jennison Portfolio, the fee is
equal to an annual rate of 0.6% of the average daily net assets of the
portfolio. The fee for the Global Portfolio is equal to an annual rate of 0.75%
of the average daily net assets of the portfolio.

For the year ended December 31, 1995, the Series Fund's total expenses were
0.55% of the average net assets of all of the Series Fund's portfolios. The
investment management fee for that period constituted 0.51% of the average net
assets. For further information about the expenses of the Series Fund, see
INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES in the statement of additional
information.

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PURCHASE AND REDEMPTION OF SHARES

Shares in the Series Fund are currently offered continuously, without sales
charge, at prices equal to the respective net asset values of the portfolios,
only to the Accounts to fund benefits payable under the Contracts. The Series
Fund may at some later date also offer its shares to other separate accounts of
The Prudential or other insurers. Pruco Securities Corporation ("Prusec"), an
indirect wholly-owned subsidiary of The Prudential, acts as the principal
underwriter of the Series Fund. Prusec's principal business address is 1111
Durham Avenue, South Plainfield, New Jersey 07080.

The Series Fund is required to redeem all full and fractional shares of the
Series Fund for cash within 7 days of receipt of proper notice of redemption.
The redemption price is the net asset value per share next determined after the
initial receipt of proper notice of redemption.

The right to redeem shares or to receive payment with respect to any redemption
may be suspended only for any period during which trading on the NYSE is
restricted as determined by the Securities and Exchange Commission or when such
exchange is closed (other than customary weekend and holiday closings), for any
period during which an emergency exists as defined by the Securities and
Exchange Commission as a result of which disposal of a portfolio's securities or
determination of the net asset value of each portfolio is not reasonably
practicable, and for such other periods as the Securities and Exchange
Commission may by order permit for the protection of shareholders of each
portfolio.

DETERMINATION OF NET ASSET VALUE

The net asset value of the shares of each portfolio is determined once daily, as
of 4:15 p.m. New York City time (12:00 noon New York City time in the case of
the Money Market Portfolio) on each day during which the NYSE is open for
business. The NYSE is open for business Monday through Friday except for the
days on which the following holidays are observed: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day. In the event the New York Stock Exchange closes early on any
business day, the net asset value of each portfolio shall be determined at a
time between such closing and 4:15 p.m. New York City time. The net asset value
per share of each portfolio except the Money Market Portfolio is computed by
adding the sum of the value of the securities held by that portfolio plus any
cash or other assets it holds, subtracting all its liabilities, and dividing the
result by the total number of shares outstanding of that portfolio at such time.
Expenses, including the investment management fee payable to The Prudential, are
accrued daily.

In determining the net asset value of the Diversified Bond and High Yield Bond
Portfolios, securities (other than debt obligations with remaining maturities of
less than 60 days, which are valued at amortized cost) will be valued utilizing
an independent pricing service to determine valuations for normal institutional
size trading units of securities. The pricing service considers such factors as
security prices, yields, maturities, call features, ratings, and developments
relating to specific securities in arriving at securities valuations.

The net asset value of shares of the Money Market Portfolio will normally remain
at $10 per share, because the net investment income of this portfolio (including
realized and unrealized gains and losses on portfolio holdings) will be declared
as a dividend each time the portfolio's net income is determined, see DIVIDENDS,
DISTRIBUTIONS, AND TAXES, page 23. If in the view of the Board of Directors of
the Series Fund it is inadvisable to continue to maintain the net asset value of
the Money Market Portfolio at $10 per share, the Board reserves the right to
alter the procedure. The Series Fund will notify shareholders of any such
alteration.

All short-term debt obligations in the Money Market Portfolio of 397 days'
maturity or less are valued on an amortized cost basis. This means that each
obligation will be valued initially at its purchase price and thereafter by
amortizing any discount or premium uniformly to maturity, regardless of the
impact of fluctuating interest rates on the market value of the obligation. This
highly practical method of valuation is in widespread use and almost always
results in a value that is extremely close to the actual market value. In order
to continue to utilize the amortized cost method of valuation, the Money Market
Portfolio may not purchase any security with a remaining maturity of more than
397 days and must maintain a dollar-weighted average of portfolio maturity of 90
days or less. In the event of sizeable changes in interest rates, however, the
value determined by this method may be higher or lower than the price that would
be received if the obligation were sold. The Board of Directors has established
procedures to determine whether, on these occasions, if any should occur, the
deviation might be enough to affect the value of shares in the portfolio by more
than 1/2 of one percent, and, if it does, an appropriate adjustment will be made
in the value of the obligations. The portfolio may only be invested in
securities of high quality as described in detail in the Appendix to this
prospectus.

The net asset value of the Stock Index, Equity Income, Equity, Prudential
Jennison, and Global Portfolios will be determined in the following manner. Any
security for which the primary market is on an exchange is generally valued at
the last sale price on such exchange as of the close of the NYSE (which is
currently 4:00 p.m. New York

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City time) or, in the absence of recorded sales, at the mean between the most
recently quoted bid and asked prices. NASDAQ National Market System equity
securities are valued at the last sale price or, if there was no sale on such
day, at the mean between the most recently quoted bid and asked prices. Other
over-the-counter equity securities are valued at the mean between the most
recently quoted bid and asked prices. Convertible debt securities that are
actively traded in the over-the-counter market, including listed securities for
which the primary market is believed to be over-the-counter, are valued at the
mean between the most recently quoted bid and asked prices. Corporate bonds
(other than convertible debt securities) and Government bonds held by the Equity
Income Portfolio are valued on the same basis as securities in the Diversified
Bond and High Yield Bond Portfolios, as described above. Short-term debt
instruments which mature in less than 60 days are valued at amortized cost. For
valuation purposes, quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents.

Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities, and money market instruments, is substantially completed
each day at various times prior to the close of the NYSE. The value of any such
securities is determined as of such times for purposes of computing a
portfolio's net asset value. Foreign currency exchange rates are also generally
determined prior to the close of the NYSE. If an extraordinary event occurs
after the close of an exchange on which that security is traded, the security
will be valued at fair value as determined in good faith by the applicable
portfolio manager under procedures established by and under the general
supervision of the Series Fund's Board of Directors.

With respect to all the portfolios which utilize such investments, options on
stock and stock indices traded on national securities exchanges are valued at
the average of the bid and asked prices as of the close of the respective
exchange (which is currently 4:10 p.m. New York City time). Futures contracts
and options thereon are valued at the last sale price at the close of the
applicable commodities exchanges or board of trade (which is currently 4:15 p.m.
New York City time) or, if there was no sale on the applicable commodities
exchange or board of trade on such day, at the mean between the most recently
quoted bid and asked prices on such exchange or board of trade.

Securities or assets for which market quotations are not readily available will
be valued at fair value as determined by The Prudential under the direction of
the Board of Directors of the Series Fund.

DIVIDENDS, DISTRIBUTIONS, AND TAXES

The Series Fund intends to continue to qualify as a regulated investment company
under certain provisions of the Internal Revenue Code (the "Code"). Under such
provisions, the Series Fund will not be subject to federal income tax on the
part of its net ordinary income and net realized capital gains that it
distributes to the Accounts. The Series Fund intends to meet the requirements
for treatment as a regulated investment company both on a portfolio-by-portfolio
basis and for the Series Fund as a whole. The Series Fund's compliance with
those requirements may prevent a portfolio from utilizing options and futures
contracts as much as the portfolio manager might otherwise believe to be
desirable.

The Series Fund intends to distribute as dividends substantially all the net
investment income, if any, of each portfolio. For dividend purposes, net
investment income of each portfolio, other than the Money Market Portfolio, will
consist of all payments of dividends (other than stock dividends) or interest
received by such portfolio less the estimated expenses of such portfolio
(including fees payable to the Investment Manager). Net investment income of the
Money Market Portfolio consists of: (i) interest accrued and/or discount earned
(including both original issue and market discount); (ii) plus or minus all
realized and unrealized gains and losses; (iii) less the expenses of the
portfolio (including the fees payable to the Investment Manager). Each portfolio
may be required to distribute more cash than it actually has received. Each
portfolio will raise the cash necessary to make such distributions by selling
securities or from interest income. This may require the portfolio to sell
securities when it would not do so for investment reasons, and may cause the
portfolio to realize additional gains. The Contract owner is not subject to
federal or state income taxes on distributions from the Series Fund portfolios
to the corresponding subaccounts.

Dividends on the Money Market Portfolio will be declared and reinvested daily in
additional full and fractional shares of the portfolio. Shares will begin
accruing dividends on the day following the date on which they are issued.
Dividends from investment income of the other portfolios will normally be
declared and reinvested in additional full and fractional shares
quarter-annually.

The Series Fund will also declare and distribute annually all net realized
capital gains of the Series Fund portfolios -- other than short-term gains of
the Money Market Portfolio, which are declared as dividends daily.

The Code generally imposes a 4% excise tax on a portion of the undistributed
income of a regulated investment company if that company fails to distribute
required percentages of its ordinary income and capital gain net income. The
Series Fund intends to employ practices that will eliminate or minimize the
imposition of this excise tax.

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In addition, Section 817(h) of the Code requires that assets underlying variable
life insurance and variable annuity contracts must meet certain diversification
requirements if the contracts are to qualify as life insurance and annuity
contracts. The diversification requirements ordinarily must be met within 1 year
after Contract owner funds are first allocated to the particular portfolio, and
within 30 days after the end of each calendar quarter thereafter. In order to
meet the diversification requirements set forth in Treasury Regulations issued
pursuant to Section 817(h), each portfolio must meet one of two alternative
tests. Under the first test, no more than 55% of the portfolio's assets can be
invested in any one investment; no more than 70% of the assets can be invested
in any two investments; no more than 80% of the assets can be invested in any
three investments; and no more than 90% can be invested in any four investments.
Under the second test, the portfolio must meet the tax law diversification
requirements for a regulated investment company and no more than 55% of the
value of the portfolio's assets can be invested in cash, cash items, Government
securities, and securities of other regulated investment companies. A third test
is available for portfolios that underlie only variable life insurance
contracts. Under this test, such portfolios can be invested without limit in
Treasury securities and, where the portfolio is invested in part in Treasury
securities, the percentages of the first test are revised and applied to the
portion of the portfolio not invested in Treasury securities.

For purposes of determining whether a variable account is adequately
diversified, each United States Government agency or instrumentality is treated
as a separate issuer for purposes of determining whether a variable account is
adequately diversified. The Series Fund's compliance with the diversification
requirements will generally limit the amount of assets that may be invested in
federally insured certificates of deposit and all types of securities issued or
guaranteed by each United States Government agency or instrumentality.

The Global Portfolio may be required to pay withholding or other taxes to
foreign governments. If so, the taxes will reduce the portfolio's dividends.
Foreign tax withholding from dividends and interest (if any) is typically set at
a rate between 10% and 15%. While Contract owners will thus bear the cost of
foreign tax withholding, they will not be able to claim a foreign tax credit or
deduction for foreign taxes paid by the portfolio.

The foregoing is a general and abbreviated summary of the applicable provisions
of the Code and Treasury Regulations currently in effect. For the complete
provisions, reference should be made to the pertinent Code sections and the
Treasury Regulations promulgated thereunder. The Code and these Regulations are
subject to change by legislative or administrative actions.

OTHER INFORMATION CONCERNING THE SERIES FUND

INCORPORATION AND AUTHORIZED STOCK

The Series Fund was incorporated under Maryland law on November 15, 1982. The
authorized Capital Stock of the Series Fund consists of 2 billion shares, par
value $0.01 per share. The shares of Capital Stock are divided into fifteen
classes: Money Market Portfolio Capital Stock (225 million shares), Diversified
Bond Portfolio Capital Stock (200 million shares), Government Income Portfolio
Capital Stock (100 million shares), Zero Coupon Bond Portfolio 2000 Capital
Stock (25 million shares), Zero Coupon Bond Portfolio 2005 Capital Stock (50
million shares), Conservative Balanced Portfolio Capital Stock (300 million
shares), Flexible Managed Portfolio Capital Stock (300 million shares), High
Yield Bond Portfolio Capital Stock (100 million shares), Stock Index Portfolio
Capital Stock (100 million shares), Equity Income Portfolio Capital Stock (100
million shares), Common Stock Portfolio Capital Stock (200 million shares),
Prudential Jennison Portfolio Capital Stock (50 million shares), Small
Capitalization Stock Portfolio Capital Stock (50 million shares), Global
Portfolio Capital Stock (100 million shares), Natural Resources Portfolio
Capital Stock (100 million shares). The shares of each portfolio, when issued,
will be fully paid and non-assessable, will have no conversion, exchange or
similar rights, and will be freely transferable.

Each share of stock will have a pro rata interest in the assets of the portfolio
to which the stock of that class relates and will have no interest in the assets
of any other portfolio. Holders of shares of any portfolio are entitled to
redeem their shares as set forth under PURCHASE AND REDEMPTION OF SHARES, page
22.

The Prudential provided the initial capital for the Series Fund. With respect to
the eight portfolios currently available to Pruco Life's DISCOVERY SELECT(SM)
Variable Annuity Contract, The Prudential initially purchased $5,000,000 worth
of shares of each of the Money Market and Diversified Bond Portfolios, and
$300,000 worth of shares of the Equity Portfolio. In addition, The Prudential
has since purchased $20,000,000 worth of shares of the High Yield Bond
Portfolio; $25,000,000 worth of shares of the Stock Index and Global Portfolios;
$5,000,000 worth of shares of the Equity Income Portfolio; and $10,000,000 worth
of shares of the Prudential Jennison Portfolio. Such shares were acquired to
enable the portfolios to avoid an unrealistically poor investment performance
that might otherwise result because the amounts available for investment were
too small. These shares were acquired for investment and can be disposed of only
by redemption. They will not be redeemed by The Prudential until the other
assets of the portfolios are large enough so that redemption will not have an
adverse effect upon investment performance. From the inception of the respective
portfolios through December 31, 1995, The Prudential has redeemed a total of
$5,062,001 worth of shares from the Money Market Portfolio, $7,752,850

24 - SERIES FUND

<PAGE>

worth of shares from the Diversified Bond Portfolio, $21,444,384 worth of shares
from the High Yield Bond Portfolio, $31,019,279 worth of shares from the Stock
Index Portfolio, $6,346,935 worth of shares from the Equity Income Portfolio,
and $304,065 worth of shares from the Equity Portfolio (these amounts reflect
total redemption of the shares purchased by The Prudential). In addition, The
Prudential has redeemed $33,878,000 worth of shares from the Global Portfolio
(this amount reflects partial redemption of the shares purchased by The
Prudential). The Prudential will vote its shares in the same manner and in the
same proportion as the shares held in the Accounts, which generally are voted in
accordance with instructions of Contract owners.

VOTING RIGHTS

The voting rights of Contract owners, and limitations on those rights, are
explained in the accompanying prospectus for the Contracts. The Prudential and
certain other insurers with separate accounts which invest in the Series Fund,
as the owners of the assets in the Accounts, vote all of the shares of the
Series Fund, but they will generally do so in accordance with the instructions
of Contract owners pursuant to the current SEC requirements and staff
interpretations regarding pass-through voting. Under certain circumstances,
however, the Companies may disregard voting instructions received from Contract
owners. The Series Fund does not hold annual meetings of shareholders in any
year in which it is not required to do so either under Maryland law or the
Investment Company Act of 1940. For additional information describing how the
Companies will vote the shares of the Series Fund, see VOTING RIGHTS in the
accompanying prospectus for the Contracts.

MONITORING FOR POSSIBLE CONFLICT

As stated above, Series Fund shares will be sold to separate accounts of The
Prudential and certain other insurers to fund both variable life insurance and
variable annuity contracts. The Board of Directors of the Series Fund intends to
monitor events for the existence of any material conflict between the interests
of variable life insurance and variable annuity contract owners. The Companies
have agreed to be responsible for reporting any potential or existing conflicts
to the Board of Directors. Moreover, the Companies have agreed to be
responsible, at their cost, to remedy any material irreconcilable conflict up to
and including establishing a new registered management investment company and
segregating the assets underlying the variable life insurance and variable
annuity contracts.

PERIODIC REPORTS

The Series Fund will send each shareholder, at least annually, statements
showing as of a specified date the number of shares in each portfolio credited
to the shareholder. The Series Fund will also send Contract owners annual and
semi-annual reports showing the financial condition of the portfolios and the
investments held in each. The annual report may take the form of an updated copy
of this prospectus and its accompanying statement of additional information.

PORTFOLIO BROKERAGE AND RELATED PRACTICES

The Prudential is responsible for decisions to buy and sell securities for the
portfolios, the selection of brokers and dealers to effect the transactions and
the negotiation of brokerage commissions, if any. Transactions on a stock
exchange in equity securities will be executed primarily through brokers that
will receive a commission paid by the portfolio. The Money Market, Diversified
Bond, and High Yield Bond Portfolios, on the other hand, will not normally incur
any brokerage commissions. Fixed income securities, as well as equity securities
traded in the over-the-counter market, are generally traded on a "net" basis
with dealers acting as principals 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
that includes an amount of compensation to the underwriter, generally referred
to as the underwriter's concession or discount. Certain of these securities may
also be purchased directly from an issuer, in which case neither commissions nor
discounts are paid.

An affiliated broker may be employed to execute brokerage transactions on behalf
of the portfolios, as long as the commissions are reasonable and fair compared
to the commissions received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time. The Series Fund may not
engage in any transactions in which The Prudential or its affiliates, including
Prudential Securities Incorporated, acts as principal, including
over-the-counter purchases and negotiated trades in which such a party acts as a
principal. Additional information about portfolio brokerage and related
transactions is included in the statement of additional information.

CUSTODIAN, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT

Chemical Bank, 4 New York Plaza, New York, NY 10004 is the custodian of the
assets held by all the portfolios, except the Global Portfolio, and is
authorized to use the facilities of the Depository Trust Company and the
facilities of the book-entry system of the Federal Reserve Bank with respect to
securities held by these portfolios. Brown

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<PAGE>

Brothers Harriman & Co. ("Brown Brothers"), 40 Water Street, Boston, MA 02109,
is the custodian of the assets of the Global Portfolio. Brown Brothers employs
subcustodians, who were approved by the directors of the Series Fund in
accordance with regulations of the Securities and Exchange Commission, for the
purpose of providing custodial service for the Global Portfolio's foreign assets
held outside the United States. Morgan Guaranty Trust Company, 60 Wall Street,
New York, NY 10260 is the custodian of the assets held in connection with
repurchase agreements entered into by the portfolios and is authorized to use
the facilities of the book-entry system of the Federal Reserve Bank. The
directors of the Series Fund monitor the activities of the custodians and the
subcustodians.

The Prudential is the transfer agent and dividend disbursing agent for the
Series Fund. The Prudential's principal business address is Prudential Plaza,
Newark, New Jersey 07102-3777.

ADDITIONAL INFORMATION

This prospectus and the statement of additional Information referred to on the
cover page do not contain all the information set forth in the registration
statement, certain portions of which have been omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. The omitted information
may be obtained from the Commission's principal office in Washington, D.C., upon
payment of the fees prescribed by the Commission.

For further information, shareholders may also contact the Series Fund's office,
the address and phone number of which are set forth on the cover of this
prospectus.

26 - SERIES FUND

<PAGE>

APPENDIX

SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO
MAY CURRENTLY INVEST

The Money Market Portfolio, and the other portfolios to the extent their
investment policies so provide, may invest in the following liquid, short-term,
debt securities regularly bought and sold by financial institutions:

1. U.S. Treasury Bills and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. These are debt securities
(including bills, certificates of indebtedness, notes, and bonds) issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S.
Government that is established under the authority of an act of Congress.
Although all obligations of agencies and instrumentalities are not direct
obligations of the U.S. Treasury, payment of the interest and principal on them
is generally backed directly or indirectly by the U.S. Government. This support
can range from the backing of the full faith and credit of the United States, to
U.S. Treasury guarantees or to the backing solely of the issuing instrumentality
itself. Securities which are not backed by the full faith and credit of the
United States include but are not limited to obligations of the Tennessee Valley
Authority, the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, and the United States Postal Service, each of which has
the right to borrow from the U.S. Treasury to meet its obligations, and
obligations of the Federal Farm Credit System and the Federal Home Loan Banks,
the obligations of which may only be satisfied by the individual credit of the
issuing agency. Obligations of the Government National Mortgage Association, the
Farmers Home Administration, and the Export-Import Bank are examples of
securities that are backed by the full faith and credit of the United States.

2. Obligations (including certificates of deposit, bankers' acceptances, and
time deposits) of domestic banks, foreign branches of U.S. banks, U.S. branches
of foreign banks, and foreign offices of foreign banks provided that such bank
has, at the time of the portfolio's investment, total assets of at least $1
billion or the equivalent. Obligations of any savings and loan association or
savings bank organized under the laws of the United States or any state thereof,
provided that such association or savings bank has, at the time of the
portfolio's investment, total assets of at least $1 billion. The term
"certificates of deposit" includes both Eurodollar certificates of deposit,
which are traded in the over-the-counter market, and Eurodollar time deposits,
for which there is generally not a market. "Eurodollars" are dollars deposited
in banks outside the United States. An investment in Eurodollar instruments
involves risks that are different in some respects from an investment in debt
obligations of domestic issuers, including future political and economic
developments such as possible expropriation or confiscatory taxation that might
adversely affect the payment of principal and interest on the Eurodollar
instruments.

"Certificates of deposit" are certificates evidencing the indebtedness of a
commercial bank to repay funds deposited with it for a definite period of time
(usually from 14 days to 1 year). "Bankers' acceptances" are credit instruments
evidencing the obligation of a bank to pay a draft which has been drawn on it by
a customer. These instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. "Time deposits"
are non-negotiable deposits in a bank for a fixed period of time.

3. Commercial paper, variable amount demand master notes, bills, notes, and
other obligations issued by a U.S. company, a foreign company or a foreign
government, its agencies, instrumentalities or political subdivisions,
denominated in U.S. dollars, and, at the date of investment, rated at least A or
A-2 by Standard & Poor's Corporation ("S&P"), A or Prime-2 by Moody's Investors
Service ("Moody's") or, if not rated, issued by an entity having an outstanding
unsecured debt issue rated at least A or A-2 by S&P or A or Prime-2 by Moody's.
A description of corporate bond ratings is contained in the Appendix to the
statement of additional information. If such obligations are guaranteed or
supported by a letter of credit issued by a bank, such bank (including a foreign
bank) must meet the requirements set forth in paragraph 2 above. If such
obligations are guaranteed or insured by an insurance company or other non-bank
entity, such insurance company or other non-bank entity must represent a credit
of high quality, as determined by the Series Fund's investment adviser under the
supervision of the Series Fund's Board of Directors.

As stated above in paragraphs 2 and 3, the Money Market Portfolio and short-term
portions of the other portfolios may contain obligations of foreign branches of
domestic banks and domestic branches of foreign banks, as well as commercial
paper, bills, notes, and other obligations issued in the United States by
foreign issuers, including foreign governments, their agencies, and
instrumentalities. This involves certain additional risks. These risks include
future political and economic developments in the country of the issuer, the
possible imposition of withholding taxes on interest income payable on such
obligations held by the Series Fund, the possible seizure or nationalization of
foreign deposits, and the possible establishment of exchange controls or other
foreign governmental laws or restrictions which might affect adversely the
payment of principal and interest on such obligations held by the Series Fund.
In addition, there may be less publicly available information about a foreign
issuer than about a domestic one, and foreign issuers may not be subject to the
same accounting, auditing and financial recordkeeping standards, and
requirements as domestic issuers. Securities issued by foreign issuers may

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<PAGE>

be subject to greater fluctuations in price than securities issued by U.S.
entities. Finally, in the event of a default with respect to any such foreign
debt obligations, it may be more difficult for the Series Fund to obtain or to
enforce a judgment against the issuers of such securities.

4. Repurchase Agreements. When the Money Market Portfolio purchases money market
securities of the types described above, it may on occasion enter into a
repurchase agreement with the seller wherein the seller and the buyer agree at
the time of sale to a repurchase of the security at a mutually agreed upon time
and price. The period of maturity is usually quite short, possibly overnight or
a few days, although it may extend over a number of months. The resale price is
in excess of the purchase price, reflecting an agreed-upon market rate effective
for the period of time the portfolio's money is invested in the security, and is
not related to the coupon rate of the purchased security. Repurchase agreements
may be considered loans of money to the seller of the underlying security, which
are collateralized by the securities underlying the repurchase agreement. The
Series Fund will not enter into repurchase agreements unless the agreement is
"fully collateralized" (i.e., the value of the securities is, and during the
entire term of the agreement remains, at least equal to the amount of the
"loan" including accrued interest). The Series Fund will take possession of
the securities underlying the agreement and will value them daily to assure that
this condition is met. The Series Fund has adopted standards for the parties
with whom it will enter into repurchase agreements which it believes are
reasonably designed to assure that such a party presents no serious risk of
becoming involved in bankruptcy proceedings within the time frame contemplated
by the repurchase agreement. In the event that a seller defaults on a repurchase
agreement, the Series Fund may incur a loss in the market value of the
collateral, as well as disposition costs; and, if a party with whom the Series
Fund had entered into a repurchase agreement becomes involved in bankruptcy
proceedings, the Series Fund's ability to realize on the collateral may be
limited or delayed and a loss may be incurred if the collateral securing the
repurchase agreement declines in value during the bankruptcy proceedings.

The Series Fund will not enter into repurchase agreements with The Prudential or
its affiliates, including Prudential Securities Incorporated. This will not
affect the Series Fund's ability to maximize its opportunities to engage in
repurchase agreements.

5. Reverse Repurchase Agreements. The Money Market Portfolio may use reverse
repurchase agreements, which are described on page 19 of the prospectus. No
portfolio may obligate more than 10% of its net assets in connection with
reverse repurchase agreements, except that the Diversified Bond and High Yield
Bond Portfolios may obligate up to 30% of their net assets in connection with
reverse repurchase agreements and dollar rolls.

6. When-Issued and Delayed Delivery Securities. From time to time, in the
ordinary course of business, the Money Market Portfolio may purchase securities
on a when-issued or delayed delivery basis (i.e., delivery and payment can take
place a month or more after the date of the transaction). The purchase price and
the interest rate payable on the securities are fixed on the transaction date.
The securities so purchased are subject to market fluctuation, and no interest
accrues to the portfolio until delivery and payment take place. At the time the
portfolio makes the commitment to purchase securities on a when-issued or
delayed delivery basis, it will record the transaction and thereafter reflect
the value, each day, of such securities in determining its net asset value. The
portfolio will make commitments for when-issued transactions only with the
intention of actually acquiring the securities and, to facilitate such
acquisitions, the Series Fund's custodian bank will maintain in a separate
account securities of the portfolio having a value equal to or greater than such
commitments. On delivery dates for such transactions, the portfolio will meet
its obligations from maturities or sales of the securities held in the separate
account and/or from then available cash flow. If the portfolio 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 obligation, incur a gain or loss
due to market fluctuation. No when-issued commitments will be made if, as a
result, more than 15% of the portfolio's net assets would be so committed.

The Board of Directors of the Series Fund has adopted policies for the Money
Market Portfolio to conform to amendments of an SEC rule applicable to money
market funds, like the portfolio. These policies do not apply to any other
portfolio. The policies are as follows: (1) The portfolio will not invest more
than 5% of its assets in the securities of any one issuer (except U.S.
Government securities); however, the portfolio may exceed the 5% limit with
respect to a single security rated in the highest rating category for up to
three business days after the purchase thereof; (2) To be eligible for
investment, a security must be a United States dollar-denominated instrument
that the Series Fund's Board has determined to present minimal credit risks and
must be rated in one of the two highest rating categories by at least two
nationally recognized statistical rating organizations ("NRSROs") assigning a
rating to the security or issue, or if only one NRSRO has assigned a rating,
that NRSRO. An unrated security must be deemed to be of comparable quality as
determined by the Series Fund's Board. In other words, the portfolio will invest
in only first tier or second tier securities. First tier securities are
securities which are rated by at least two NRSROs, or by the only NRSRO that has
rated the security, in the highest short-term rating category, or unrated
securities of comparable quality as determined by the Series Fund's Board.
Second tier securities are eligible securities that are not first tier
securities; (3) The portfolio will not invest more than 5% of its total assets
in second tier securities; (4) The portfolio may not invest more than 1% of its
assets

A2 - Series Fund

<PAGE>

in second tier securities of any one issuer; (5) In the event a first tier
security held by the portfolio is downgraded and becomes a second tier security,
or in the case of an unrated security the Series Fund's Board determines it is
no longer of comparable quality to a first tier security, or in the event The
Prudential becomes aware that a NRSRO has rated a second tier security or an
unrated portfolio security below its second highest rating, the Board will
reassess promptly whether the security presents minimal credit risks and shall
cause the portfolio to take such action as the Board determines is in the best
interests of the portfolio and its shareholders; (6) In the event of a default
or because of a rating downgrade a security held in the portfolio is no longer
an eligible investment, the portfolio will sell the security as soon as
practicable unless the Series Fund's Board makes a specific finding that such
action would not be in the best interest of the portfolio; and (7) The
portfolio's dollar-weighted average maturity will be no more than 90 days. The
Series Fund's Board of Directors has adopted written procedures delegating to
the investment advisor under certain guidelines the responsibility to make
several of the above-described determinations, including certain credit quality
determinations.

A3 - Series Fund