CBA MONEY FUND, 485BPOS, 1997-06-23

CBA MONEY FUND
485BPOS, 1997-06-23

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 23, 1997
SECURITIES ACT FILE NO. 2-82766
INVESTMENT COMPANY ACT FILE NO. 811-3703
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [_]
[X]
POST-EFFECTIVE AMENDMENT NO. 15
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
[X]
AMENDMENT NO. 18
(CHECK APPROPRIATE BOX OR BOXES)

----------------
CBA(R) MONEY FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (609) 282-2800

ARTHUR ZEIKEL
CBA(R) MONEY FUND
800 SCUDDERS MILL ROAD, PLAINSBORO, NEW JERSEY
MAILING ADDRESS: P.O. BOX 9011, PRINCETON, NEW JERSEY 08543-9011
(NAME AND ADDRESS OF AGENT FOR SERVICE)

COPIES TO:
COUNSEL FOR THE FUND: PHILIP L. KIRSTEIN, ESQ.
FUND ASSET MANAGEMENT, L.P.
BROWN & WOOD LLP
ONE WORLD TRADE CENTER P.O. BOX 9011
NEW YORK, NEW YORK 10048-0557 PRINCETON, NEW JERSEY 08543-9011
ATTENTION: THOMAS R. SMITH, JR.

KEVIN J. MOYNIHAN, ESQ.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE
BOX)

[X] immediately upon filing pursuant to paragraph (b), or
[_] on (date) pursuant to paragraph (b), or
[_] 60 days after filing pursuant to paragraph (a) (1),
or
[_] on (date) pursuant to paragraph (a) (1), or
[_] 75 days after filing pursuant to paragraph (a) (2),
or
[_] on (date) pursuant to paragraph (a) (2) of Rule 485.
If appropriate, check the following box:
[_] this post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.

The Registrant has registered an indefinite number of its shares of
beneficial interest under the Securities Act of 1933 pursuant to Rule 24f-2
under the Investment Company Act of 1940. The notice required by such rule for
the Registrant's most recent fiscal year was filed on April 22, 1997.

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

<PAGE>

CBA(R) MONEY FUND
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
------------- --------
Part A
<C> <S> <C>
Item 1. Cover Page............................ Cover Page
Item 2. Synopsis.............................. Fee Table
Item 3. Condensed Financial Information....... Supplementary Financial Information;
Yield Information
Item 4. General Description of Registrant..... Investment Objectives and Policies;
Additional Information--
Organization of the Money Fund
Item 5. Management of the Fund................ Fee Table; Management of the Money
Fund; Portfolio Transactions;
Inside Back Cover Page
Item 5A. Management's Discussion of Fund
Performance.......................... Not Applicable
Item 6. Capital Stock and Other Securities.... Cover Page; Additional Information
Item 7. Purchase of Securities Being Offered.. Cover Page; Fee Table; Purchase of
Shares; Redemption of Shares; Addi-
tional Information; Inside Back
Cover Page
Item 8. Redemption or Repurchase.............. Purchase of Shares; Redemption of
Shares
Item 9. Pending Legal Proceedings............. Not Applicable

Part B
Item 10. Cover Page............................ Cover Page
Item 11. Table of Contents..................... Cover Page
Item 12. General Information and History....... Not Applicable
Item 13. Investment Objectives and Policies.... Investment Objectives and Policies
Item 14. Management of the Fund................ Management of the Money Fund
Item 15. Control Persons and Principal Holders
of Securities........................ Management of the Money Fund
Item 16. Investment Advisory and Other
Services............................. Management of the Money Fund;
Purchase and Redemption of Shares;
General Information
Item 17. Brokerage Allocation.................. Portfolio Transactions
Item 18. Capital Stock and Other Securities.... General Information--Description of
Shares
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered............. Purchase and Redemption of Shares;
Determination of Net Asset Value
Item 20. Tax Status............................ Taxes
Item 21. Underwriters.......................... Purchase and Redemption of Shares
Item 22. Calculation of Performance Data....... Yield Information
Item 23. Financial Statements.................. Financial Statements
</TABLE>

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

i
<PAGE>

PROSPECTUS

June 23, 1997

CBA(R) MONEY FUND
P.O. BOX 9011, PRINCETON, NEW JERSEY 08543-9011 . PHONE NO. (609) 282-2800

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

CBA(R) Money Fund (the "Money Fund") is a no-load money market fund whose
shares are offered to subscribers to the Capital Builder SM Account service,
the Life Management Service SM, the Merrill Lynch Emerging Investor Account SM
service and the Medical Savings Account service of Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), to subscribers to the Broadcort
Capital Account service of Broadcort Capital Corp. ("Broadcort") (the Capital
Builder SM Account service, Life Management Service SM, Merrill Lynch Emerging
Investor Account SM service, Medical Savings Account service and Broadcort
Capital Account service are collectively referred to as the "Services") and to
investors maintaining accounts directly with the Money Fund's transfer agent.
Each Service consists of a conventional securities cash or margin account
("Securities Account") maintained at Merrill Lynch or Broadcort, as
applicable, which is presently linked to the Money Fund and to a Visa (R)
card/check account ("Visa (R) Account"). The Life Management Service also may
be linked to insurance, home financing and other services. THE MONEY FUND
SEEKS TO MAINTAIN A CONSISTENT $1.00 NET ASSET VALUE PER SHARE, ALTHOUGH THIS
CANNOT BE ASSURED. AN INVESTMENT IN THE MONEY FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT.

A customer of Merrill Lynch and a customer of a securities firm that has
entered into a selected dealer agreement with Broadcort may subscribe to one
of the Services, as applicable, as set forth in the description of the
respective Services discussed below. Subject to the conditions described in
this Prospectus, free credit balances in the Securities Account of Service
participants may be periodically invested in shares of the Money Fund. Service
subscribers also are able to have free credit balances deposited in money
market deposit accounts maintained with depository institutions. Investment in
the Money Fund or utilization of such deposit accounts permits the subscriber
to earn a return on such funds pending further investment through other
aspects of the respective Services or utilization through the Visa (R)
Account. The shares of the Money Fund also may be purchased by investors
maintaining accounts directly with the Money Fund's Transfer Agent. The
minimum initial purchase for investors who do not subscribe to one of the
Services is $5,000 and subsequent purchases must be $1,000 or more. Such
investors will not receive any of the additional services available to Service
subscribers, such as the Visa (R) Account or the automatic investment of free
credit balances. See "Purchase of Shares."
----------------

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

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

This Prospectus is a concise statement of information about the Money Fund
that is relevant to making an investment in the Money Fund. This Prospectus
should be retained for future reference. A statement containing additional
information about the Money Fund, dated June 23, 1997 (the "Statement of
Additional Information"), has been filed with the Securities and Exchange
Commission (the "Commission") and can be obtained, without charge, by calling
or writing to the Money Fund at the above telephone number or address. The
Statement of Additional Information is hereby incorporated by reference into
this Prospectus.

The information in this Prospectus should be read in conjunction with the
description of the Merrill Lynch Capital Builder SM Account program or the
description of the applicable Service program furnished to all subscribers
prior to the time the Account is opened. Reference is made to such
descriptions and accompanying materials for information with respect to the
Services, including the fees related to such Accounts. Information concerning
the money market deposit accounts in which free credit balances may be
deposited is described in a separate brochure. For more information about the
Services, call toll-free from anywhere in the U.S., 1-800-247-6400 (Capital
Builder SM Account), 1-888-543-3648 (Life Management Service SM), 1-888-
EMERGE-1 (Merrill Lynch Emerging Investor Account SM), 1-888-INFO-MSA (Medical
Savings Account) or 1-800-247-6450 (Broadcort Capital Account), respectively.

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

FEE TABLE

<TABLE>
<CAPTION>
MONEY FUND ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1997:
- --------------------------------------------
<S> <C>
Management Fees(a)................................................... 0.41%
Rule 12b-1 Fees(b)................................................... 0.13%
Other Expenses:
Transfer Agency Fees(c)...................................... 0.16%
Other Fees................................................... 0.03%
-----
Total Other Expenses................................................. 0.19%
-----
Total Money Fund Operating Expenses.................................. 0.73%
=====
</TABLE>
- --------

(a) See "Management of the Money Fund--Management and Advisory Arrangements"--
page 9.

(b) See "Purchase of Shares"--page 10.

EXAMPLE:
<TABLE>
<CAPTION>
CUMULATIVE EXPENSES PAID FOR THE PERIOD OF:
-----------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming an operating expense ra-
tio of 0.73% and a 5% annual re-
turn throughout the periods....... $7 $23 $41 $91
</TABLE>

MERRILL LYNCH CHARGES AN ANNUAL PROGRAM PARTICIPATION FEE (PRESENTLY $65) FOR
THE CAPITAL BUILDER SM ACCOUNT SERVICE AND CHARGES AN ANNUAL PROGRAM
PARTICIPATION FEE (PRESENTLY $114, SUBJECT TO REBATE IN CERTAIN CIRCUMSTANCES)
FOR THE LIFE MANAGEMENT SERVICE SM. SEE THE LIFE MANAGEMENT SERVICE SM PROGRAM
DESCRIPTION BOOKLET FOR DETAILS. MERRILL LYNCH CHARGES AN ANNUAL PROGRAM
PARTICIPATION FEE (PRESENTLY $24, SUBJECT TO FEE WAIVER IN CERTAIN
CIRCUMSTANCES) FOR THE MERRILL LYNCH EMERGING INVESTOR ACCOUNT SM. SEE THE
MERRILL LYNCH EMERGING INVESTOR ACCOUNT SM BROCHURE FOR DETAILS. MERRILL LYNCH
CHARGES AN ANNUAL PROGRAM PARTICIPATION FEE (PRESENTLY $100) FOR THE MEDICAL
SAVINGS ACCOUNT SERVICE. BROADCORT CHARGES AN ANNUAL PROGRAM PARTICIPATION FEE
(PRESENTLY $75) FOR THE BROADCORT CAPITAL ACCOUNT SERVICE. SHAREHOLDERS OF THE
MONEY FUND WHOSE ACCOUNTS ARE MAINTAINED DIRECTLY WITH THE MONEY FUND'S
TRANSFER AGENT AND WHO ARE NOT SUBSCRIBERS TO ANY OF THE SERVICES WILL NOT BE
CHARGED A PROGRAM FEE BUT WILL NOT RECEIVE ANY OF THE ADDITIONAL SERVICES
AVAILABLE TO SUBSCRIBERS.

The manager of the Money Fund, Fund Asset Management, L.P. (the "Manager"),
has agreed voluntarily to waive a portion of its management fee. The Fee Table
has been restated to assume the absence of any waiver because the Manager may
discontinue or reduce such waiver at any time without notice. For the fiscal
year ended February 28, 1997, the Manager waived management fees totalling
0.04% after which the total Money Fund operating expenses were 0.69%.

2
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fee Table........................ 2
Financial Highlights............. 3
Yield Information................ 4
Investment Objectives and Poli-
cies............................ 4
Management of the Money Fund..... 8
Trustees....................... 8
Management and Advisory
Arrangements.................. 9
Transfer Agency Services....... 10
Purchase of Shares............... 10
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Redemption of Shares............. 13
Portfolio Transactions........... 14
Additional Information........... 15
Dividends...................... 15
Determination of Net Asset Val-
ue............................ 15
Taxes ......................... 15
Organization of the Money Fund. 17
Shareholder Inquiries.......... 17
Reports to Shareholders........ 17
</TABLE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN
CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE MONEY FUND, THE MANAGER, MERRILL LYNCH OR
BROADCORT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY STATE IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.

FINANCIAL HIGHLIGHTS

Financial statements for the fiscal year ended February 28, 1997 and the
independent auditors' report thereon are included in the Statement of
Additional Information. The following per share data and ratios have been
derived from information provided in financial statements of the Money Fund
audited by Deloitte & Touche LLP, independent auditors.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
FEBRUARY 28,
------------------------------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED
FEBRUARY 28, FEBRUARY 29, FEBRUARY 29,
1997 1996 1995 1994 1993 1992
------------ ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in
Net Asset Value:
PER SHARE
OPERATING
PERFORMANCE:
Net asset value,
beginning of
year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ----------
Investment
income--net.... .0475 .0524 .0396 .0260 .0304 .0511
Realized and
unrealized gain
(loss) on
investments--
net............ -- ** .0001 .0005 (.0004) .0017 .0008
---------- ---------- ---------- ---------- ---------- ----------
Total from
investment
operations...... .0475 .0525 .0401 .0256 .0321 .0519
---------- ---------- ---------- ---------- ---------- ----------
Less dividends
and
distributions:
Investment
income--net.... (.0475) (.0524) (.0396) (.0260) (.0304) (.0511)
Realized gain on
investments--
net............ -- ** (.0001) -- ** (.0004) (.0014) (.0008)*
---------- ---------- ---------- ---------- ---------- ----------
Total dividends
and
distributions... (.0475) (.0525) (.0396) (.0264) (.0318) (.0519)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value,
end of year..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ==========
TOTAL INVESTMENT
RETURN.......... 4.87% 5.39% 4.04% 2.67% 3.23% 5.32%
========== ========== ========== ========== ========== ==========
RATIOS TO AVERAGE
NET ASSETS:
Expenses, net of
reimbursement... .69% .75% .77% .71% .71% .69%
========== ========== ========== ========== ========== ==========
Expenses......... .73% .79% .81% .75% .75% .74%
========== ========== ========== ========== ========== ==========
Investment income
and realized
gain on
investments--
net............. 4.71% 5.22% 3.98% 2.62% 3.19% 5.18%*
========== ========== ========== ========== ========== ==========
SUPPLEMENTAL
DATA:
Net assets, end
of year (in
thousands)...... $2,236,660 $1,988,000 $1,406,315 $1,287,456 $1,242,686 $1,211,833
========== ========== ========== ========== ========== ==========
<CAPTION>
FOR THE YEAR ENDED
FEBRUARY 28,
----------------------------------
FOR THE
YEAR ENDED
FEBRUARY 29,
1991 1990 1989 1988
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Increase
(Decrease) in
Net Asset Value:
PER SHARE
OPERATING
PERFORMANCE:
Net asset value,
beginning of
year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ---------- ---------- ------------
Investment
income--net.... .0736 .0846 .0720 .0619
Realized and
unrealized gain
(loss) on
investments--
net............ .0006 .0004 .0001 .0008
------------ ---------- ---------- ------------
Total from
investment
operations...... .0742 .0850 .0721 .0627
------------ ---------- ---------- ------------
Less dividends
and
distributions:
Investment
income--net.... (.0736) (.0846) (.0720) (.0619)
Realized gain on
investments--
net............ (.0006)* (.0004)* (.0001)* (.0008)*
------------ ---------- ---------- ------------
Total dividends
and
distributions... (.0742) (.0850) (.0721) (.0627)
------------ ---------- ---------- ------------
Net asset value,
end of year..... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ========== ========== ============
TOTAL INVESTMENT
RETURN.......... 7.69% 8.82% 7.47% 6.47%
============ ========== ========== ============
RATIOS TO AVERAGE
NET ASSETS:
Expenses, net of
reimbursement... .70% .68% .65% .65%
============ ========== ========== ============
Expenses......... .75% .81% .89% .96%
============ ========== ========== ============
Investment income
and realized
gain on
investments--
net............. 7.40%* 8.40%* 7.30%* 6.29%*
============ ========== ========== ============
SUPPLEMENTAL
DATA:
Net assets, end
of year (in
thousands)...... $1,063,827 $864,835 $459,658 $267,201
============ ========== ========== ============
</TABLE>
- --------
* Includes unrealized gain (loss).
** Amount is less than $.0001 per share.

3
<PAGE>

YIELD INFORMATION

Set forth below is the Money Fund's yield information as to the annualized
and compounded annualized yield for the indicated seven-day period.

<TABLE>
<CAPTION>
SEVEN-DAY PERIOD ENDED
------------------------------
FEBRUARY 28, 1997 MAY 31, 1997
----------------- ------------
<S> <C> <C>
Annualized Yield:
Including gains and
losses................. 4.77% 4.96%
Excluding gains and
losses................. 4.77% 4.96%
Compounded Annualized
Yield................... 4.89% 5.08%
Average maturity of port-
folio at end of period.. 68 days 69 days
</TABLE>

The yield of the Money Fund refers to the income generated by an investment
in the Money Fund over a stated seven-day period. This income is then
annualized; that is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The compounded annualized yield is
calculated similarly but, when annualized, the income earned by an investment
in the Money Fund is assumed to be reinvested. The compounded annualized yield
will be somewhat higher than the yield because of the effect of the assumed
reinvestment.

The yield on Money Fund shares normally will fluctuate on a daily basis.
Therefore, the yield for any given past period is not an indication or
representation by the Money Fund of future yields or rates of return on its
shares. The Money Fund's yield is affected by changes in interest rates on
money market securities, average portfolio maturity, the types and quality of
portfolio securities held and operating expenses. Current yield information may
not provide a basis for comparison with bank deposits or other investments
which pay a fixed yield over a stated period of time.

On occasion, the Money Fund may compare its yield to (i) industry averages
compiled by IBC's Money Fund Report, a widely recognized independent
publication that monitors the performance of money market mutual funds, (ii)
the average yield reported by the Bank Rate Monitor National Index(TM) for
money market deposit accounts offered by the 100 leading banks and thrift
institutions in the ten largest standard metropolitan statistical areas, (iii)
yield data published by Lipper Analytical Services, Inc., (iv) the yield on an
investment in 90-day Treasury bills on a rolling basis, assuming quarterly
compounding or (v) performance data published by Morningstar Publications,
Inc., Money Magazine, U.S. News & World Report, Business Week, CDA Investment
Technology, Inc., Forbes Magazine and Fortune Magazine. As with yield
quotations, yield comparisons should not be considered indicative of the Money
Fund's yield or relative performance for any future period.

INVESTMENT OBJECTIVES AND POLICIES

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

4
<PAGE>

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

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

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

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

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

Bank Money Instruments. Obligations of commercial banks, savings banks,
savings and loan associations or other depository institutions such as
certificates of deposit, including variable rate certificates of deposit,
time deposits, deposit notes, bank notes, and bankers' acceptances. The
savings banks and savings and loan associations must be organized and
operating in the United States. The obligations of commercial banks may be
issued by U.S. banks, foreign branches of U.S. banks ("Eurodollar"
obligations) or U.S. branches of foreign banks ("Yankeedollar"
obligations). Eurodollar and Yankeedollar obligations may be general
obligations of the parent bank or may be limited to the issuing branch by
the terms of the specific obligations or by government regulation.

Commercial Paper and Other Short-Term Obligations. Commercial paper
(including variable amount master demand notes and funding agreements),
which refers to short-term unsecured promissory notes issued by
corporations, partnerships, trusts or other entities to finance short-term
credit needs and non-convertible debt securities (e.g., bonds and
debentures) with no more than 397 days (13 months) remaining to maturity at
the date of purchase. Short-term obligations issued by trusts,
corporations,

5
<PAGE>

partnerships or other entities include mortgage related or asset-backed
debt instruments, including pass-through certificates such as
participations in, or bonds and notes backed by, pools of mortgage, credit
card, automobile or other types of receivables. These structured financings
will be supported by sufficient collateral and other credit enhancements,
including letters of credit, insurance, reserve funds and guarantees by
third parties, to enable such instruments to obtain the requisite quality
rating by a nationally recognized statistical rating organization, as
described below.

Foreign Bank Money Instruments. U.S. dollar-denominated obligations of
foreign depository institutions and their foreign branches and
subsidiaries, such as certificates of deposit, bankers' acceptances, time
deposits and deposit notes. The obligations of such foreign branches and
subsidiaries may be the general obligation of the parent bank or may be
limited to the issuing branch or subsidiary by the terms of the specific
obligation or by government regulation. Such investments will only be made
if determined to be of comparable quality to other investments permissible
for the Money Fund. The Money Fund will not invest more than 25% of its
total assets (taken at market value at the time of each investment) in
these obligations.

Foreign Short-Term Debt Instruments. U.S. dollar-denominated commercial
paper and other short-term obligations issued by foreign entities. Such
investments are subject to quality standards similar to those applicable to
investments in comparable obligations of domestic issuers.

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

Repurchase Agreements. The Money Fund may invest in the money market
securities described above pursuant to repurchase agreements. Under such
agreements, the bank or primary dealer agrees, upon entering into the
contract, to repurchase the security at a mutually agreed upon time and
price, thereby determining the yield during the term of the agreement. This
results in a fixed rate of return insulated from market fluctuations during
such period.

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

Lending of Portfolio Securities. The Money Fund may lend portfolio
securities (with a value not in excess of 33 1/3% of its total assets,
taken at market value) to brokers, dealers and financial institutions and
receive collateral in cash or securities issued or guaranteed by the U.S.
Government which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities. During the
period of the loan, the Money Fund receives income on the loaned securities
and either receives a fee or earns interest on any investments made with
the cash collateral and thereby increases its yield.

6
<PAGE>

The dollar weighted average maturity of the Money Fund's portfolio will be 90
days or less. During the year ended February 28, 1997, the average maturity of
its portfolio ranged from 48 days to 89 days.

Preservation of capital is a prime investment objective of the Money Fund,
and while the types of money market securities in which the Money Fund invests
are not completely risk free, such securities are generally considered to have
low principal risk. There is the risk of the failure of issuers to meet their
principal and interest obligations. Repurchase agreements may be construed to
be collateralized loans by the purchaser to the seller secured by the
securities transferred to the purchaser. In the event of default by the seller
under a repurchase agreement construed to be a collateralized loan, the
underlying securities are not owned by the Money Fund but only constitute
collateral for the seller's obligation to pay the repurchase price. With
respect to repurchase agreements, reverse repurchase agreements and the lending
of portfolio securities by the Money Fund, there is also the risk of the
failure of parties involved to repurchase at the agreed upon price or to return
the securities involved in such transactions, in which event the Money Fund may
suffer time delays and incur costs or possible losses in connection with such
transactions.

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

The Money Fund's investments in U.S. Government and Government agency
securities will be in instruments with a remaining maturity of 762 days (25
months) or less. The Money Fund's other investments will be in instruments with
a remaining maturity of 397 days (13 months) or less that have received a
short-term rating, or that have been issued by issuers that have received a
short-term rating with respect to a class of debt obligations that are
comparable in priority and security with the instruments, from the requisite
nationally recognized statistical rating organizations ("NRSROs") in one of the
two highest short-term rating categories or, if neither the instrument nor its
issuers is so rated, will be of comparable quality as determined by the
Trustees of the Money Fund. Currently, there are six NRSROs: Duff & Phelps
Inc., Fitch Investors Service, Inc., IBCA Limited and its affiliate IBCA Inc.,
Thompson BankWatch, Inc., Moody's Investors Service, Inc. and Standard & Poor's
Ratings Services. The Money Fund will determine the remaining maturity of
investments in which it invests in accordance with Commission regulations.

A Commission regulation ordinarily limits investments by the Money Fund in
securities issued by any one issuer (other than the U.S. Government, its
agencies or instrumentalities) to not more than 5% of its total assets, or in
the event that such securities do not have the highest rating, not more than 1%
of its total assets. In addition, such regulations require that not more than
5% of the Money Fund's total assets be invested in securities that do not have
the highest rating, or are not of comparable quality to securities with the
highest rating, as determined by the Trustees of the Money Fund.

The Money Fund may purchase or sell money market securities on a forward
commitment basis at fixed purchase or sale terms. The purchase of money market
securities on a forward commitment basis involves the risk that the yields
available in the market when the delivery takes place may actually be higher
than

7
<PAGE>

those obtained in the transaction itself; if yields increase, the value of the
securities purchased on a forward commitment basis will generally decrease. A
separate account of the Money Fund will be established with the Money Fund's
custodian consisting of cash or liquid money market securities having a market
value at all times at least equal to the amount of the forward purchase
commitment. The Money Fund may also sell money market securities on a forward
commitment basis. By doing so, the Fund foregoes the opportunity to sell such
securities at a higher price should they increase in value between the trade
and settlement dates.

Investment Restrictions. The Money Fund has adopted a number of restrictions
and policies relating to the investment of its assets and its activities, which
are fundamental policies and may not be changed without the approval of the
holders of a majority of the Money Fund's outstanding voting securities as
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act"). Among the more significant restrictions, the Money Fund may not:
(1) purchase any securities other than (i) money market securities and (ii) the
other investments described under "Investment Objectives and Policies;" (2)
invest more than 25% of its total assets (taken at market value at the time of
each investment) in the securities of issuers in any particular industry (other
than U.S. Government securities, U.S Government agency securities, or domestic
bank money instruments); (3) purchase the securities of any one issuer, other
than the U.S. Government, its agencies or instrumentalities, if immediately
after the purchase, more than 5% of the value of its total assets (taken at
market value) would be invested in that issuer, except that, with respect to
25% of the value of the Money Fund's total assets, the Money Fund may invest up
to 10% of its total assets in bank money instruments or repurchase agreements
with any one bank; (4) purchase more than 10% of the outstanding securities of
an issuer except that this restriction shall not apply to U.S. Government or
Government agency securities, bank money instruments and repurchase agreements;
or (5) enter into repurchase agreements if, as a result, more than 10% of its
total assets (taken at market value at the time of each investment) would be
subject to repurchase agreements maturing in more than seven days.

MANAGEMENT OF THE MONEY FUND

TRUSTEES

The Trustees of the Money Fund consist of six individuals, five of whom are
not "interested persons" of the Money Fund as defined in the Investment Company
Act. The Trustees of the Money Fund are responsible for the overall supervision
of the operations of the Money Fund and perform the various duties imposed on
the directors of investment companies by the Investment Company Act.

The Trustees of the Money Fund are:

Arthur Zeikel*--President of the Manager and its affiliate, Merrill Lynch
Asset Management, L.P. ("MLAM"); President and Director of Princeton
Services, Inc. ("Princeton Services"); Executive Vice President of Merrill
Lynch & Co., Inc. ("ML & Co."); Director of Merrill Lynch Funds
Distributor, Inc. ("MLFD").

8
<PAGE>

Ronald W. Forbes--Professor of Finance, School of Business, State
University of New York at Albany.

Cynthia A. Montgomery--Professor of Competition and Strategy, Harvard
Business School.

Charles C. Reilly--Former Adjunct Professor, Columbia University Graduate
School of Business.

Kevin A. Ryan--Professor of Education, Boston University; Founder and
current Director of the Boston University Center for the Advancement of
Ethics and Character.

Richard R. West--Dean Emeritus, New York University, Leonard N. Stern
School of Business Administration.

- --------
* Interested person, as defined in the Investment Company Act, of the Money
Fund.

MANAGEMENT AND ADVISORY ARRANGEMENTS

The Manager is owned and controlled by ML & Co., a financial services holding
company and the parent of Merrill Lynch. The Manager or an affiliate of the
Manager, MLAM, acts as the investment adviser for more than 140 registered
investment companies and provides investment advisory services to individual
and institutional accounts. As of May 31, 1997, the Manager and MLAM had a
total of approximately $252.5 billion in investment company and other portfolio
assets under management, including accounts of certain affiliates of MLAM.

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

Pursuant to the Management Agreement, the Manager receives a fee from the
Money Fund at the end of each month at the annual rate of 0.50% of the first
$500 million of average daily net assets of the Money Fund, 0.425% of average
daily net assets in excess of $500 million but not exceeding $1 billion, and
0.375% of average daily net assets in excess of $1 billion. For the fiscal year
ended February 28, 1997, the total management fee paid, prior to any
reimbursement, by the Money Fund to the Manager aggregated $8,657,674 (based on
average net assets of approximately $2.1 billion) and the effective fee rate
was 0.41%. During the same period, the Manager reimbursed $830,366 to the Money
Fund pursuant to arrangements to limit the Money Fund's operating expenses, and
the effective fee rate after such reimbursement was 0.37%.

The Management Agreement obligates the Money Fund to pay certain expenses
incurred in its operations, including, among other things, the management fee,
legal and audit fees, unaffiliated Trustees' fees and expenses, registration
fees, custodian and transfer agency fees, accounting and pricing costs, and
certain of the costs of printing proxies, shareholder reports, prospectuses and
statements of additional information. Accounting services are provided to the
Money Fund by the Manager, and the Money Fund

9
<PAGE>

reimburses the Manager for its costs in connection with such services. For the
fiscal year ended February 28, 1997, the amount of such reimbursement was
$143,588. For the fiscal year ended February 28, 1997, the ratio of operating
expenses, net of reimbursement, to average net assets was 0.69%.

For information as to the distribution fee to be paid by the Money Fund to
Merrill Lynch and Broadcort pursuant to a Distribution Agreement, see "Purchase
of Shares."

TRANSFER AGENCY SERVICES

Merrill Lynch Financial Data Services, Inc. (the "Transfer Agent"), which is
a subsidiary of ML & Co., acts as the Trust's Transfer Agent pursuant to a
Transfer Agency, Shareholder Servicing Agency, and Proxy Agency Agreement (the
"Transfer Agency Agreement"). Pursuant to the Transfer Agency Agreement, the
Transfer Agent is responsible for the issuance, transfer and redemption of
shares and the opening and maintenance of shareholder accounts. Pursuant to the
Transfer Agency Agreement, the Transfer Agent receives a fee at the rate of
$10.00 per account and the Transfer Agent is entitled to reimbursement from the
Fund for certain transaction charges and out-of-pocket expenses incurred by it
under the Transfer Agency Agreement. For purposes of the Transfer Agency
Agreement, the term "account" includes a shareholder account maintained
directly by the Transfer Agent and any other account representing the
beneficial interest of a person on a recordkeeping system, provided the
recordkeeping system is maintained by a wholly-owned subsidiary of ML & Co. For
the year ended February 28, 1997, the total fee paid by the Trust to the
Transfer Agent pursuant to the Transfer Agency Agreement was $3,420,214.

PURCHASE OF SHARES

The Money Fund is offering its shares without sales charge at a public
offering price equal to the net asset value (normally $1.00 per share) next
determined after receipt by the Money Fund of the purchase order. Shares
purchased will receive the next dividend declared after the shares are issued,
which will be immediately prior to the 12 noon, New York time, pricing on the
following business day. A purchase order will not become effective until cash
in the form of Federal funds becomes available to the Money Fund (see below for
information as to when the Money Fund receives such funds). Purchases of shares
will be made pursuant to the procedures described below.

PURCHASE OF SHARES BY SERVICE SUBSCRIBERS

Automatic Purchases. Cash balances arising in the Securities Account of a
Service subscriber are automatically invested in shares of the Money Fund not
later than the first business day of each week on which both the New York Stock
Exchange and New York banks are open, which normally will be Monday (except
cash balances in the Securities Account of a Medical Savings Account service
subscriber are automatically invested the next business day after they are
received). Subscribers to a Service also are able to have free credit balances
deposited in money market deposit accounts maintained with depository
institutions. This Prospectus does not purport to describe such Services and
prospective participants in such Services are referred to the brochure which is
available with respect thereto. Cash balances may arise from securities
activity in the Securities Account, dividend and interest payments or cash
deposits made by the subscriber. Cash balances arising from the following
transactions will be automatically invested prior to the automatic weekly
sweeps. Cash balances arising from the sale of securities which do not settle
on the day of the

10
<PAGE>

transactions (such as most common and preferred stock transactions) and from
principal repayment on debt securities become available to the Money Fund and
will be invested in shares on the business day following receipt of the
proceeds with respect thereto in the subscriber's Service account. Proceeds
from the sale of shares of Merrill Lynch Ready Assets Trust and Merrill Lynch
U.S.A. Government Reserves, and from the sale of securities settling on a same
day basis also become available to the Money Fund and will be invested in
shares on the next business day following receipt. A Service subscriber
desiring to effect a purchase order for Money Fund shares by making a cash
deposit in his Securities Account should make such deposit on the business day
preceding the day of the weekly sweep before the cashiering deadline of the
brokerage office in which the deposit is to be made in order for such cash
deposit to be invested in Money Fund shares through the weekly sweep. A
subscriber desiring to make a cash deposit should contact his financial
consultant or registered representative for information concerning the
cashiering deadline of his local brokerage office.

Manual Purchases. Subscribers to a Service may make manual investments of
$1,000 or more at any time in shares of the Money Fund. Manual investments may
be made from cash balances in the subscriber's Securities Account which arise
from cash deposits or other activity. Manual purchases shall be effective on
the day following the day the order is placed from Merrill Lynch or the
selected dealer except that orders involving cash deposits become effective on
the second business day thereafter if they are placed after the cashiering
deadline referred to in the preceding paragraph. In addition, manual purchases
of $500,000 or more can be made effective on the same day the order is placed
with Merrill Lynch provided that requirements as to timely notification and
transfer of a Federal funds wire in the proper amount are met. Money Fund
customers desiring further information on this method of purchasing shares
should contact their Financial Consultants.

Merrill Lynch, Broadcort and the selected dealers reserve the right to
terminate a subscriber's participation in the respective Service for any
reason.

All purchases of Money Fund shares and dividend reinvestments will be
confirmed to Service subscribers (rounded to the nearest share) in the
transaction statement which is sent to all participants in such Accounts
monthly.

Individuals who purchase shares of the Money Fund through a Securities
Account will be subject to the applicable annual program participation fee. In
order to receive all the services available to Service subscribers, such
individuals must complete the account opening process, including completing or
supplying requested documentation. Individuals who subscribe to the Life
Management Service SM will receive a full rebate of their annual program
participation fee if they meet certain conditions, as described in more detail
in the Life Management Service SM program description booklet. Individuals who
subscribe to the Merrill Lynch Emerging Investor Account SM service will have
their annual program participation fee waived if they meet certain conditions,
as described in more detail in the Merrill Lynch Emerging Investor Account SM
program brochure.

Merrill Lynch (or Broadcort if applicable) will transmit payment to the
Money Fund on behalf of the investor and will supply the Money Fund with the
required account information. If the investor can provide Merrill Lynch (or
Broadcort if applicable) with immediately available funds, Merrill Lynch (or
Broadcort if applicable) will be able to transmit such funds to the Money Fund
in an expeditious manner. Since there is a three-day settlement period
applicable to the sale of most securities, delays may occur when an investor
is liquidating other investments for investment in the Money Fund.

11
<PAGE>

PURCHASE OF SHARES BY NON-SERVICE SUBSCRIBERS

Shares of the Money Fund may be purchased by investors maintaining accounts
directly with the Transfer Agent. Shareholders of the Money Fund not
subscribing to a Service will not be charged the applicable Service fee but
will not receive any of the additional services available to Service
subscribers, such as the Visa (R) Account or the automatic investment of free
credit balances. The minimum initial purchase for non-Service subscribers is
$5,000 and the minimum subsequent purchase is $1,000. Investors desiring to
purchase shares directly through the Transfer Agent as described below should
contact Merrill Lynch Financial Data Services, Inc., P.O. Box 45290,
Jacksonville, Florida 32239-5290.

Payment to the Transfer Agent. Investors who are not subscribers to a
Service may submit purchase orders directly by mail or otherwise to the
Transfer Agent. Purchase orders by mail should be sent to Merrill Lynch
Financial Data Services, Inc., P.O. Box 45290, Jacksonville, Florida 32232-
5290. Purchase orders which are sent by hand should be delivered to Merrill
Lynch Financial Data Services, Inc., 4800 Deer Lake Drive East, Jacksonville,
Florida 32246-6484. Investors opening a new account must enclose a completed
Purchase Application which is available from Merrill Lynch Financial Data
Services, Inc. Existing shareholders should enclose the detachable stub from a
monthly account statement which they have received. Checks should be made
payable to Merrill Lynch, Pierce, Fenner & Smith Incorporated. Certified
checks are not necessary, but checks are accepted subject to collection at
full face value in U.S. funds and must be drawn in U.S. dollars on a U.S.
bank. Payments for the accounts of corporations, foundations and other
organizations may not be made by third party checks.

The Money Fund has entered into a distribution agreement with Merrill Lynch,
a wholly-owned subsidiary of ML & Co., and Broadcort (the "Distribution
Agreement"). Broadcort, a wholly-owned subsidiary of Merrill Lynch, conducts a
securities clearing business. Pursuant to the Distribution Agreement, the
shares of the Money Fund are offered exclusively (i) by Merrill Lynch to
subscribers to the Capital Builder SM Account program and the Services, (ii)
by Broadcort to selected dealers for resale to subscribers to the Broadcort
Capital Account program and (iii) to investors maintaining accounts directly
with the Transfer Agent.

The Money Fund also has adopted a distribution and shareholder servicing
plan in compliance with Rule 12b-1 under the Investment Company Act (the
"Distribution Plan"). The Distribution Plan authorizes the Money Fund to pay
Merrill Lynch and Broadcort a distribution fee at the end of each month at the
annual rate of 0.125% of average daily net assets of the Money Fund
attributable to subscribers to the applicable Service and to pay Merrill Lynch
or Broadcort a fee at the same rate with regard to net assets of the Money
Fund attributable to investors maintaining securities accounts at Merrill
Lynch (or Broadcort if applicable) and to investors maintaining accounts
directly with the Transfer Agent who are not subscribers to such programs,
except that the value of Money Fund shares in accounts maintained directly
with the Transfer Agent which are not serviced by Merrill Lynch financial
consultants will be excluded. The Distribution Plan reimburses Merrill Lynch
and Broadcort only for actual expenses incurred in the fiscal year in which
the fee is paid. The Merrill Lynch distribution fee is to compensate Merrill
Lynch financial consultants and other directly involved Merrill Lynch
personnel for selling shares of the Money Fund and for providing direct
personal services to shareholders. The Broadcort distribution fee is to
compensate selected dealers for activities and services related to the sale,
promotion and marketing of shares of the Money Fund. The Distribution Plan
authorizes Broadcort to enter into sub-agreements with selected dealers.

12
<PAGE>

For the fiscal year ended February 28, 1997, $2,519,882 was paid to Merrill
Lynch and Broadcort pursuant to the distribution arrangements (based on average
net assets subject to the Distribution Plan of approximately $2.1 billion).

REDEMPTION OF SHARES

The Money Fund is required to redeem for cash all full and fractional shares
of the Money Fund. The redemption price is the net asset value per share next
determined after receipt by the Transfer Agent of proper notice of redemption
as described in accordance with either the automatic or manual procedures set
forth below. If notice is received by the Transfer Agent prior to the 12 noon,
New York time, pricing on any business day, the redemption will be effective on
that day. If the notice is received after 12 noon, New York time, the
redemption will be effective on the next business day. Payment of the
redemption proceeds will be made on the same day the redemption becomes
effective.

REDEMPTION OF SHARES BY SERVICE SUBSCRIBERS

Automatic Redemptions. Redemptions will be automatically effected by Merrill
Lynch or Broadcort to satisfy debit balances in the Securities Account created
by activity therein or to satisfy debit balances created by Visa (R) card
purchases, cash advances or checks written against the Visa (R) Account. Each
Securities Account of a Service subscriber will be automatically scanned for
debits each business day prior to 12 noon, New York time. After application of
any cash balances in the account to these debits, shares of the Money Fund will
be redeemed at net asset value at the 12 noon, New York time, pricing to the
extent necessary to satisfy any remaining debits in either the Securities
Account or the Visa (R) Account. If the Securities Account is a margin account,
margin loans will be utilized to satisfy debits remaining after the liquidation
of all funds invested in the Money Fund, and shares of the Money Fund may not
be purchased until all debits and margin loans in a subscriber's Service
account are satisfied.

Manual Redemptions. Shareholders may redeem shares of the Money Fund directly
by submitting a written notice of redemption directly to Merrill Lynch or the
selected dealer, respectively, which will submit the requests to the Money
Fund's Transfer Agent. Cash proceeds from the manual redemption of the Money
Fund shares will be ordinarily mailed to the shareholder at his address of
record, or upon request, mailed or wired (if $10,000 or more) to his bank
account. Redemption requests should not be sent to the Money Fund or the
Transfer Agent. If inadvertently sent to the Money Fund or the Transfer Agent,
they will be forwarded to Merrill Lynch or Broadcort. The notice requires the
signatures of all persons in whose name the shares are registered, signed
exactly as their names appear on their statements. Shareholders desiring to
effect manual redemptions should contact their financial consultant or
registered representative.

All redemptions of Money Fund shares will be confirmed to Service subscribers
(rounded to the nearest share) in the transaction statement which is sent to
all participants in such Services monthly.

REDEMPTION OF SHARES BY NON-SERVICE SUBSCRIBERS

Shareholders may redeem shares of the Money Fund held in a Merrill Lynch
securities account directly by submitting a written notice of redemption
directly to Merrill Lynch, which will submit the requests to the Money Fund's
Transfer Agent as described above under "Redemption of Shares--Redemption of
Shares by Service Subscribers--Manual Redemptions."

13
<PAGE>

Shareholders maintaining an account directly with the Transfer Agent may
redeem shares of the Money Fund directly by submitting a written notice by mail
directly to the Transfer Agent, Merrill Lynch Financial Data Services, Inc.,
P.O. Box 45290, Jacksonville, Florida 32232-5290. Redemption requests which are
sent by hand should be delivered to Merrill Lynch Financial Data Services,
Inc., 4800 Deer Lake Drive East, Jacksonville, Florida 32246-6484. Cash
proceeds from the manual redemption of Money Fund shares will be mailed to the
shareholder at his address of record. Redemption requests should not be sent to
the Money Fund or Merrill Lynch. If inadvertently sent to the Money Fund or
Merrill Lynch, such redemption requests will be forwarded to the Transfer
Agent. The notice requires the signatures of all persons in whose name the
shares are registered, signed exactly as their names appear on their monthly
statement. The signature(s) on the redemption request must be guaranteed by an
"eligible guarantor institution" as such is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, the existence and validity of which may be
verified by the Transfer Agent through the use of industry publications.
Notarized signatures are not sufficient. In certain instances, additional
documents such as, but not limited to, trust instruments, death certificates,
appointments as executor or administrator, or certificates of corporate
authority may be required.

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

At various times the Money Fund may be requested to redeem shares in manual
or automatic redemptions with respect to which good payment for shares
purchased has not yet been received by Merrill Lynch or the selected dealer.
The Money Fund may delay, or cause to be delayed, the payment of the redemption
proceeds until such time as good payment has been collected for the purchase of
such shares. Normally, this delay will not exceed 10 days.

PORTFOLIO TRANSACTIONS

The money market securities in which the Money Fund invests are traded
primarily in the over-the-counter ("OTC") market. Where possible, the Money
Fund will deal directly with the dealers who make a market in the securities
involved except in those circumstances where better prices and execution are
available elsewhere. Such dealers usually are acting as principal for their own
account. On occasion, securities may be purchased directly from the issuer.
Money market securities are generally traded on a net basis and do not normally
involve either brokerage commissions or transfer taxes. The cost of executing
portfolio transactions will primarily consist of dealer spreads and
underwriting commissions. Under the Investment Company Act, persons affiliated
with the Money Fund are prohibited from dealing with the Money Fund as a
principal in the purchase and sale of securities unless an exemptive order
allowing such transactions is obtained from the Commission. Affiliated persons
of the Money Fund may serve as its broker in OTC transactions conducted on an
agency basis. The Commission has issued an exemptive order permitting the Money
Fund to conduct certain principal transactions with Merrill Lynch Government
Securities Inc., its subsidiary Merrill Lynch Money Markets Inc. and Merrill
Lynch, subject to certain terms and conditions. For the fiscal year ended
February 28, 1997, the Money Fund engaged in 33 transactions pursuant to such
order aggregating approximately $600.6 million.

14
<PAGE>

ADDITIONAL INFORMATION

DIVIDENDS

Dividends are declared and reinvested daily in the form of additional shares
at net asset value. Shareholders will receive statements monthly as to such
reinvestments. Shareholders liquidating their holdings will receive upon
redemption all dividends declared and reinvested through the date of
redemption, except that, in those instances where shareholders request
transactions that settle on a "same-day" basis (such as Federal Funds wire
redemptions, branch office checks, transfers to other Merrill Lynch accounts
and certain securities transactions) the Money Fund shares necessary to effect
such transactions will be deemed to have been transferred to Merrill Lynch
prior to the Money Fund's declaration of dividends on that day. In such
instances, shareholders will receive all dividends declared and reinvested
through the date immediately preceding the date of redemption. Since the net
income (including realized gains and losses on the portfolio assets) is
declared as a dividend in shares each time the net income of the Money Fund is
determined, the net asset value per share of the Money Fund normally remains
constant at $1.00 per share.

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

DETERMINATION OF NET ASSET VALUE

The net asset value of the Money Fund is determined by the Manager at 12
noon, New York time, on each day the New York Stock Exchange or New York banks
are open for business, immediately after the daily declaration of dividends.
The net asset value is determined pursuant to the "penny rounding" method by
adding the fair value of all securities and other assets in the portfolio,
deducting the portfolio's liabilities and dividing by the number of shares
outstanding. The result of this computation will be rounded to the nearest
whole cent. It is anticipated that the net asset value per share will remain
constant at $1.00 per share, but no assurance can be offered in this regard.
Securities with remaining maturities of greater than 60 days for which market
quotations are readily available will be valued at market value. Securities
with remaining maturities of 60 days or less will be valued on an amortized
cost basis, i.e. by valuing the instrument at its cost and thereafter assuming
a constant amortization to maturity of any discount or premium, regardless of
the impact of fluctuating interest rates on the market value of the instrument.
Other securities held by the Money Fund will be valued at their fair value as
determined in good faith by or under direction of the Board of Trustees.

TAXES

The Money Fund intends to continue to qualify for the special tax treatment
afforded regulated investment companies ("RICs") under the Internal Revenue
Code of 1986, as amended (the "Code"). As long as it so qualifies, the Money
Fund (but not its shareholders) will not be subject to Federal income tax on
the part of its net ordinary income and net realized capital gains which it
distributes to shareholders. The Money Fund intends to distribute substantially
all of such income.

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<PAGE>

Dividends paid by the Money Fund from its ordinary income or from an excess
of net short-term capital gains over net long-term capital losses (together
referred to hereafter as "ordinary income dividends") are taxable to
shareholders as ordinary income. Distributions made from an excess of net long-
term capital gains over net short-term capital losses ("capital gain
dividends") are taxable to shareholders as long-term capital gains, regardless
of the length of time the shareholder has owned Money Fund shares. Any loss
upon the sale or exchange of Fund shares held for six months or less, however,
will be treated as long-term capital loss to the extent of any capital gain
dividends received by the shareholder. Distributions in excess of the Money
Fund's earnings and profits will first reduce the adjusted tax basis of a
holder's shares and, after such adjusted tax basis is reduced to zero, will
constitute capital gains to such holder (assuming the shares are held as a
capital asset).

Dividends are taxable to shareholders even though they are reinvested in
additional shares of the Money Fund. Not later than 60 days after the close of
its taxable year, the Money Fund will provide its shareholders with a written
notice designating the amounts of any ordinary income dividends or capital gain
dividends. Distributions by the Fund, whether from ordinary income or capital
gains, will not be eligible for the dividends received deduction allowed to
corporations under the Code. If the Money Fund pays a dividend in January which
was declared in the previous October, November or December to shareholders of
record on a specified date in one of such months, then such dividend will be
treated for tax purposes as being paid by the Money Fund and received by its
shareholders on December 31 of the year in which such dividend was declared.

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

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

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

Under certain provisions of the Code, some taxpayers may be subject to a 31%
withholding tax on ordinary income dividends, capital gain dividends and
redemption payments ("backup withholding"). Generally, shareholders subject to
backup withholding will be those for whom no certified taxpayer identification
number is on file with the Money Fund or who, to the Money Fund's knowledge,
have furnished an incorrect number. When establishing an account, an investor
must certify under penalty of perjury that such number is correct and that such
investor is not otherwise subject to backup withholding.

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<PAGE>

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

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

Ordinary income and capital gain dividends may also be subject to state and
local taxes. Certain states exempt from state income taxation dividends paid by
RICs which are derived from interest on U.S. Government obligations. State law
varies as to whether dividend income attributable to U.S. Government
obligations is exempt from state income tax.

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

ORGANIZATION OF THE MONEY FUND

The Money Fund is an unincorporated business trust organized on March 29,
1983 under the laws of Massachusetts. It is a no-load, diversified, open-end
investment company. The Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional shares of a single class. Upon
liquidation of the Money Fund, shareholders are entitled to share pro rata in
the net assets of the Money Fund available for distribution to shareholders.
Shares are fully paid and non-assessable by the Money Fund.

SHAREHOLDER INQUIRIES

Shareholder inquiries may be addressed to the Money Fund at the address or
telephone number set forth on the cover page of this Prospectus.

REPORTS TO SHAREHOLDERS

The fiscal year of the Money Fund ends on the last day of February of each
year. The Money Fund will send to its shareholders at least semi-annually
reports showing its portfolio securities and other information. An annual
report containing financial statements audited by independent auditors is sent
to shareholders each year.

17
<PAGE>

Only one copy of each shareholder report and certain shareholder
communications will be mailed to each identified shareholder regardless of the
number of accounts such shareholder has. If a shareholder wishes to receive
separate copies of each report and communication for each of the shareholder's
related accounts the shareholder should notify in writing:

Merrill Lynch Financial Data Services, Inc.
P.O. Box 45290
Jacksonville, FL 32232-5290

The written notification should include the shareholder's name, address, tax
identification number and Merrill Lynch and/or mutual fund account numbers. If
you have any questions regarding this please call your Merrill Lynch Financial
Consultant or Merrill Lynch Financial Data Services, Inc. at (800) 221-7210.

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

The Capital Builder SM Account is also marketed by Merrill Lynch under the
registered service mark "CBA." The Life Management Service SM is also marketed
by Merrill Lynch under the registered service mark "LMS."

The Declaration of Trust establishing the Money Fund, as amended (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts. The Declaration provides that the name "CBA Money Fund"
refers to the Trustees under the Declaration collectively as Trustees, but not
as individuals or personally; and no Trustee, shareholder, officer, employee
or agent of the Money Fund shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim or otherwise in connection with the affairs of said Money Fund but
the Trust Property only shall be liable.

18
<PAGE>

Manager
Fund Asset Management, L.P.
Administrative Offices:
800 Scudders Mill Road
Plainsboro, New Jersey
Mailing Address:
P.O. Box 9011
Princeton, New Jersey 08543-9011

Distributors
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
250 Vesey Street
New York, New York 10281

Broadcort Capital Corp.
100 Church Street
New York, New York 10007

Custodian
State Street Bank and Trust Company
P.O. Box 1713
Boston, Massachusetts 02101

Transfer Agent
Merrill Lynch Financial Data Services, Inc.
Administrative Offices:
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
Mailing Address:
P.O. Box 45290 Jacksonville, Florida 32232-5290

Independent Auditors
Deloitte & Touche LLP
117 Campus Drive
Princeton, New Jersey 08540

Counsel
Brown & Wood LLP
One World Trade Center
New York, New York 10048-0557
<PAGE>

LOGO MERRILL LYNCH

LOGO CBA(R)
MONEY FUND

PROSPECTUS
LOGO CBA(R)

- --------------------------------------------------------------------------------
LOGO CBA(R)
Shares of the
Money Fund are
offered to
participants
in the Capital
Builder SM
Account
service and
various
central asset
account
programs of
Merrill Lynch,
Pierce, Fenner
& Smith
Incorporated,
to
participants
in the
Broadcort
Capital
Account
service of
Broadcort
Capital Corp.
and to
investors
maintaining
accounts
directly with
the Transfer
Agent.
Investors
should be
aware that the
Accounts are
not bank
accounts and
that a
shareholder's
investment in
the Money Fund
is not insured
by any
governmental
agency. As
with any
investment in
securities,
the value of a
shareholder's
investment in
the Money Fund
may fluctuate.

Principal Office of the
Money Fund:
800 Scudders Mill Road
Plainsboro, New Jersey

Mailing Address:
P.O. Box 9011
Princeton, New Jersey
08543-9011

Code #10126-0697 June 23, 1997
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
CBA(R) MONEY FUND
P.O. BOX 9011, PRINCETON, NEW JERSEY 08543-9011 . PHONE NO. (609) 282-2800

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

CBA(R) Money Fund (the "Money Fund") is a no-load money market fund whose
shares are offered to subscribers to the Capital Builder SM Account service,
the Life Management Service SM, the Merrill Lynch Emerging Investor Account SM
service and the Medical Savings Account service of Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), to subscribers to the Broadcort
Capital Account service of Broadcort Capital Corp. ("Broadcort") (the Capital
Builder SM Account service, Life Management Service SM, Merrill Lynch Emerging
Investor Account SM service and the Medical Savings Account service are
collectively referred to as the "Services") and to investors maintaining
accounts directly with the Money Fund's Transfer Agent. Each Service consists
of a conventional securities cash or margin account ("Securities Account")
maintained at Merrill Lynch or Broadcort, as applicable, which is presently
linked to the Money Fund and to a Visa (R) card/check account ("Visa (R)
Account"). The Life Management Service also may be linked to insurance, home
financing and other services.

Merrill Lynch charges an annual program participation fee (presently $65)
for the Capital Builder SM Account service and charges an annual program
participation fee (presently $114, subject to rebate in certain circumstances)
for the Life Management Service SM. See the Life Management Service SM program
description booklet for details. Merrill Lynch charges an annual program
participation fee (presently $24, subject to fee waiver in certain
circumstances) for the Merrill Lynch Emerging Investor Account SM. See the
Merrill Lynch Emerging Investor Account SM brochure for details. Merrill Lynch
charges an annual program participation fee (presently $100) for the Medical
Savings Account service. Broadcort charges an annual fee (presently $75) for
the Broadcort Capital Account service. Information with respect to the
respective Services is set forth in the description of such Service or
accompanying material furnished to all Service subscribers. Merrill Lynch and
Broadcort reserve the right to change the respective fees at any time.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objectives and Policies.. 2
Management of the Money Fund........ 5
Trustees and Officers.............. 5
Compensation of Trustees........... 6
Management and Advisory Arrange-
ments............................. 7
Purchase and Redemption of Shares... 8
Portfolio Transactions.............. 10
Determination of Net Asset Value.... 12
Yield Information................... 13
Taxes............................... 13
Federal............................ 13
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information............ 15
Description of Shares......... 15
Custodian..................... 15
Transfer Agent................ 16
Independent Auditors.......... 16
Legal Counsel................. 16
Reports to Shareholders....... 16
Additional Information........ 16
Appendix....................... 17
Independent Auditors' Report... 19
Financial Statements........... 20
</TABLE>

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

This Statement of Additional Information of the Money Fund is not a
prospectus and should be read in conjunction with the Prospectus of the Money
Fund, dated June 23, 1997 (the "Prospectus"), which has been filed with the
Securities and Exchange Commission (the "Commission") and can be obtained
without charge by calling or by writing to the Money Fund at the above
telephone number or address. This Statement of Additional Information has been
incorporated by reference into the Prospectus.

The date of this Statement of Additional Information is June 23, 1997.
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The Money Fund is a no-load money market fund whose shares are offered to
subscribers to the Capital Builder SM Account service and the Life Management
Service SM of Merrill Lynch, to subscribers to the Broadcort Capital Account
service of Broadcort and to investors maintaining accounts directly with the
Money Fund's Transfer Agent. Reference is made to "Investment Objectives and
Policies" in the Prospectus for a discussion of the investment objectives and
policies of the Money Fund.

As discussed in the Prospectus, the Money Fund may invest in money market
securities pursuant to repurchase agreements. Under such agreements, the
counterparty agrees, on entering into the contract, to repurchase the security
at a mutually agreed upon time and price, thereby determining the yield during
the term of the agreement. This results in a fixed rate of return insulated
from market fluctuations during such period. Such agreements usually cover
short periods, such as under a week. The Money Fund will require the seller to
provide additional collateral if the market value of the securities falls
below the repurchase price at any time during the term of the repurchase
agreement. In the event of a default by the seller, the Money Fund ordinarily
will retain ownership of the securities underlying the repurchase agreement,
and instead of a contractually fixed rate of return, the rate of return to the
Money Fund shall be dependent upon intervening fluctuations of the market
value of such securities and the accrued interest on the securities. In such
event, the Money Fund would have rights against the seller for breach of
contract with respect to any losses arising from market fluctuations following
the failure of the seller to perform. In certain circumstances, repurchase
agreements may be construed to be collateralized loans by the purchaser to the
seller secured by the securities transferred to the purchaser. In the event of
default by the seller under a repurchase agreement construed to be a
collateralized loan, the underlying securities are not owned by the Money Fund
but only constitute collateral for the seller's obligation to pay the
repurchase price. Therefore, the Money Fund may suffer time delays and incur
costs or possible losses in connection with the disposition of the collateral.
From time to time the Money Fund also may invest in money market securities
pursuant to purchase and sale contracts. While purchase and sale contracts are
similar to repurchase agreements, purchase and sale contracts are structured
so as to be in substance more like a purchase and sale of the underlying
security than is the case with repurchase agreements.

Also, as discussed in the Prospectus, the Money Fund may invest in
obligations issued by commercial and savings banks and savings and loan
associations. The obligations of commercial banks may be issued by U.S. banks,
foreign branches of U.S. banks ("Eurodollar" obligations) or U.S. branches of
foreign banks ("Yankeedollar" obligations). In addition, the Money Fund may
also invest in U.S. dollar-denominated obligations of foreign depository
institutions and their subsidiaries. Eurodollar and Yankeedollar obligations
and obligations of foreign depository institutions may be general obligations
of the parent bank or may be limited to the issuing branch by the terms of the
specific obligation or by government regulation. The Money Fund may also
invest in U.S. dollar-denominated commercial paper and other short-term
obligations issued by foreign entities. Such investments are subject to
quality standards similar to those applicable to investments in comparable
obligations of domestic issuers.

2
<PAGE>

Eurodollar and Yankeedollar obligations, as well as obligations of foreign
depository institutions and short-term obligations issued by other foreign
entities, involve additional investment risks from the risks of obligations of
U.S. issuers. Such investment risks include adverse political and economic
developments, the possible imposition of withholding taxes on interest income
payable on such obligations, the possible seizure or nationalization of foreign
deposits and the possible establishment of exchange controls or other foreign
governmental laws or restrictions which might adversely affect the payment of
principal and interest. Generally the issuers of such obligations are subject
to few or none of the U.S. regulatory requirements applicable to U.S. issuers.
Foreign branches of U.S. banks may be subject to less stringent reserve
requirements than U.S. banks. U.S. branches of foreign banks are subject to the
reserve requirements of the states in which they are located. There may be less
publicly available information about a U.S. branch or subsidiary of a foreign
bank or other issuer than about a U.S. bank or other issuer, and such entities
may not be subject to the same accounting, auditing and financial record
keeping standards and requirements as U.S. issuers. Evidence of ownership of
Eurodollar and foreign obligations may be held outside the United States, and
the Money Fund may be subject to the risks associated with the holding of such
property overseas. Eurodollar and foreign obligations of the Money Fund held
overseas will be held by foreign branches of the Money Fund's custodian or by
other U.S. or foreign banks under subcustodian arrangements complying with the
requirements of the Investment Company Act of 1940, as amended (the "Investment
Company Act").

The manager of the Money Fund, Fund Asset Management, L.P. (the "Manager"),
will carefully consider the above factors in making investments in Eurodollar
obligations, Yankeedollar obligations of foreign depository institutions and
other foreign short-term obligations and will not knowingly purchase
obligations which, at the time of purchase, are subject to exchange controls or
withholding taxes. Generally, the Money Fund will limit its Yankeedollar
investments to obligations of banks organized in Canada, France, Germany,
Japan, the Netherlands, Switzerland, the United Kingdom and other
industrialized nations.

The Money Fund's investments in U.S. Government and Government agency
securities will be in instruments with a remaining maturity of 762 days (25
months) or less. The Money Fund's other investments will be in instruments with
a remaining maturity of 397 days (13 months) or less that have received a
short-term rating, or that have been issued by issuers that have received a
short-term rating with respect to a class of debt obligations that are
comparable in priority and security with the instruments, from the requisite
nationally recognized statistical rating organizations ("NRSROs") in one of the
two highest short-term rating categories or, if neither the instrument nor its
issuer is so rated, will be of comparable quality as determined by the Trustees
of the Money Fund. Currently, there are six NRSROs: Duff & Phelps Inc., Fitch
Investors Service, Inc., IBCA Limited and its affiliate IBCA Inc., Thompson
BankWatch, Inc., Moody's Investors Service, Inc. and Standard & Poor's Ratings
Services. The Money Fund will determine the remaining maturity of investments
in which it invests in accordance with Commission regulations.

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

3
<PAGE>

50% of the outstanding shares). The Money Fund may not (1) make investments for
the purpose of exercising control or management; (2) underwrite securities
issued by other persons; (3) purchase securities of other investment companies,
except in connection with a merger, consolidation, acquisition or
reorganization; (4) purchase or sell real estate (other than money market
securities secured by real estate or interests therein or money market
securities issued by companies which invest in real estate or interests
therein), commodities or commodity contracts, interests in oil, gas or other
mineral exploration or development programs; (5) purchase any securities on
margin, except for the use of short-term credit necessary for clearance of
purchase and sales of portfolio securities; (6) make short sales of securities
or maintain a short position or write, purchase or sell puts, calls, straddles,
spreads or combinations thereof; (7) make loans to other persons, provided that
the Money Fund may purchase money market securities or enter into repurchase
agreements or purchase and sale contracts and lend securities owned or held by
it pursuant to (8) below; (8) lend its portfolio securities in excess of 33
1/3% of its total assets, taken at market value, provided that such loans are
made according to the guidelines set forth below; (9) borrow amounts in excess
of 20% of its total assets, taken at market value (including the amount
borrowed), and then only from banks as a temporary measure for extraordinary or
emergency purposes (the borrowing provisions shall not apply to reverse
repurchase agreements) [Usually only "leveraged" investment companies may
borrow in excess of 5% of their assets; however, the Money Fund will not borrow
to increase income but only to meet redemption requests which might otherwise
require untimely dispositions of portfolio securities. The Money Fund will not
purchase securities while borrowings are outstanding. Interest paid on such
borrowing will reduce net income.]; (10) mortgage, pledge, hypothecate or in
any manner transfer (except as provided in (8) above) as security for
indebtedness any securities owned or held by the Money Fund except as may be
necessary in connection with borrowings referred to in investment restriction
(9) above, and then such mortgaging, pledging or hypothecating may not exceed
10% of the Money Fund's net assets, taken at market value; (11) invest in
securities with legal or contractual restrictions on resale (except for
repurchase agreements) or for which no readily available market exists if,
regarding all such securities, more than 10% of its net assets (taken at market
value) would be invested in such securities; (12) invest in securities of
issuers (other than U.S. Government agency securities) having a record,
together with predecessors, of less than three years of continuous operation
if, regarding all such securities, more than 5% of its total assets (taken at
market value) would be invested in such securities; (13) invest in securities
or investments referred to in investment restriction (11) above and investment
restriction (5) in the Prospectus if, regarding all such securities and
investments, more than 10% of the Money Fund's total assets (taken at market
value) would be invested in such securities or investments; (14) enter into
reverse repurchase agreements if, as a result thereof, the Money Fund's
obligations with respect to reverse repurchase agreements would exceed one-
third of its net assets (defined to be total assets, taken at market value,
less liabilities other than reverse repurchase agreements); and (15) purchase
or retain the securities of any issuer, if those individual officers and
Trustees of the Money Fund, Merrill Lynch Asset Management, L.P. ("MLAM") or
any subsidiary thereof each owning beneficially more than 1/2 of 1% of the
securities of such issuer own in the aggregate more than 5% of the securities
of the issuer.

Lending of Portfolio Securities. Subject to investment restriction (8) above,
the Money Fund may from time to time lend securities from its portfolio to
brokers, dealers and financial institutions and receive collateral in cash or
securities issued or guaranteed by the U.S. Government which will be maintained
at all times in an amount equal to at least 100% of the current market value of
the loaned securities. Such cash

4
<PAGE>

collateral will be invested in short-term securities, the income from which
will increase the return to the Money Fund. Such loans will be terminable at
any time. The Money Fund will have the right to regain record ownership of
loaned securities to exercise beneficial rights and may do so when deemed
appropriate. The Money Fund may pay reasonable fees in connection with the
arranging of such loans.

MANAGEMENT OF THE MONEY FUND

TRUSTEES AND OFFICERS

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

Arthur Zeikel (65)--President and Trustee (1)(2)--President of the Manager
(which term, as used herein, includes its corporate predecessors) since 1977;
President of MLAM (which term, as used herein, includes its corporate
predecessors) since 1977; President and Director of Princeton Services, Inc.
("Princeton Services") since 1993; Executive Vice President of Merrill Lynch &
Co., Inc. ("ML & Co.") since 1990; Director of Merrill Lynch Funds Distributor,
Inc. ("MLFD") since 1977.

Ronald W. Forbes (56)--Trustee (2)--1400 Washington Avenue, Albany, New York
12222. Professor of Finance, School of Business, State University of New York
at Albany since 1989.

Cynthia A. Montgomery (44)--Trustee (2)--Harvard Business School, Soldiers
Field Road, Boston, Massachusetts 02163. Professor, Harvard Business School
since 1989; Associate Professor, J.L. Kellogg Graduate School of Management,
Northwestern University from 1985 to 1989; Assistant Professor, Graduate School
of Business Administration, The University of Michigan from 1979 to 1985;
Director, UNUM Corporation since 1990 and Director of Newell Co. since 1995.

Charles C. Reilly (65)--Trustee (2)--9 Hampton Harbor Road, Hampton Bays,
New York 11946. Self-employed financial consultant since 1990; President and
Chief Investment Officer of Verus Capital, Inc. from 1979 to 1990; Senior Vice
President of Arnhold and S. Bleichroeder, Inc. from 1973 to 1990; Adjunct
Professor, Columbia University Graduate School of Business from 1990 to 1991;
Adjunct Professor, Wharton School, The University of Pennsylvania, from to 1989
to 1990; Partner, Small Cities Cable Television since 1986.

Kevin A. Ryan (64)--Trustee (2)--127 Commonwealth Avenue, Chestnut Hill,
Massachusetts 02167. Founder and current Director of The Boston University
Center for the Advancement of Ethics and Character; Professor of Education at
Boston University since 1982; formerly taught on the faculties of The
University of Chicago, Stanford University and Ohio State University.

Richard R. West (59)--Trustee (2)--Box 604, Genoa, Nevada 89411. Professor of
Finance since 1984, and Dean from 1984 to 1993, and currently Dean Emeritus of
New York University Leonard N. Stern School of Business Administration;
Director of Bowne & Co., Inc. (financial printer), Vornado, Inc. (real estate
holding company) and Alexander's Inc. (real estate company).

5
<PAGE>

Terry K. Glenn (56)--Executive Vice President (1)(2)--Executive Vice
President of the Manager and MLAM since 1983; Executive Vice President and
Director of Princeton Services since 1993; President of the Distributor since
1986 and Director thereof since 1991; President of Princeton Administrators,
L.P. since 1988.

Joseph T. Monagle, Jr. (48)--Senior Vice President (1)(2)--Senior Vice
President of the Manager and MLAM since 1990; Senior Vice President of
Princeton Services since 1993.

Donald C. Burke (37)--Vice President (1)(2)--Vice President and Director of
Taxation of MLAM since 1990.

Carlo J. Giannini (53)--Vice President (1)(2)--Vice President of MLAM since
1981.

Kevin J. McKenna (40)--Vice President (1)(2)--Vice President of MLAM since
1985.

Gerald M. Richard (48)--Treasurer (1)(2)--Senior Vice President and
Treasurer of the Manager and MLAM since 1984; Senior Vice President and
Treasurer of Princeton Services since 1993; Vice President of MLFD since 1981;
Treasurer since 1984.

Robert Harris (45)--Secretary (1)(2)-- Vice President of MLAM since 1984 and
attorney associated with MLAM since 1980; Secretary of MLFD since 1982.

- --------

(1) Interested person, as defined in the Investment Company Act, of the Money
Fund.
(2) Such Trustee or officer is a director or officer of certain other
investment companies for which the Manager or MLAM acts as investment
adviser.

At May 31, 1997, the Trustees and officers of the Money Fund as a group (13
persons) owned an aggregate of less than 1% of the outstanding shares of
beneficial interest of the Money Fund. At such date, Mr. Zeikel, an officer
and Trustee of the Money Fund, and the other officers of the Money Fund, owned
less than 1% of the outstanding shares of common stock of ML & Co.

COMPENSATION OF TRUSTEES

Pursuant to the terms of its management agreement with the Money Fund (the
"Management Agreement"), the Manager pays all compensation of officers and
employees of the Money Fund as well as the fees of all Trustees of the Money
Fund who are affiliated persons of ML & Co. or its subsidiaries. The Money
Fund pays each non-interested Trustee a fee of $3,000 per year plus $800 per
meeting attended and pays all Trustees' actual out-of-pocket expenses relating
to attendance at meetings; the Money Fund also pays an annual fee of $1,500 to
members of its Audit and Nominating Committee (the "Committee") and pays all
Trustees' actual out-of-pocket expenses relating to attendance at meetings.
The Chairman of the Committee receives an additional annual fee of $1,000 per
year. For the fiscal year ended February 28, 1997 fees and expenses paid to
the non-interested Trustees aggregated $40,616.

6
<PAGE>

The following table sets forth for the fiscal year ended February 28, 1997
compensation paid by the Money Fund to the non-interested Trustees and for the
calendar year ended December 31, 1996 the aggregate compensation paid by all
investment companies advised by MLAM, FAM or their affiliates ("MLAM/FAM
Advised Funds") to the non-interested Trustees.

<TABLE>
<CAPTION>
TOTAL COMPENSATION
FROM FUND AND
AGGREGATE PENSION OR RETIREMENT MLAM/FAM ADVISED
COMPENSATION BENEFITS ACCRUED AS PART FUNDS PAID TO
NAME OF TRUSTEE FROM FUND OF FUND EXPENSE TRUSTEES(1)
--------------- ------------ ------------------------ ------------------
<S> <C> <C> <C>
Ronald W. Forbes(1)..... $7,700 None $142,500
Cynthia A. Montgom-
ery(1)................. $7,700 None $142,500
Charles C. Reilly(1).... $8,700 None $293,833
Kevin A. Ryan(1)........ $7,700 None $142,500
Richard R. West(1)...... $7,700 None $269,833
</TABLE>
- --------

(1) The Trustees serve on the Boards of other MLAM/FAM Advised Funds as
follows: Mr. Forbes (25 registered investment companies consisting of 38
portfolios); Ms. Montgomery (25 registered investment companies consisting
of 38 portfolios); Mr. Reilly (43 registered investment companies
consisting of 56 portfolios); Mr. Ryan (25 registered investment companies
consisting of 38 portfolios); and Mr. West (52 registered investment
companies consisting of 65 portfolios).

MANAGEMENT AND ADVISORY ARRANGEMENTS

Reference is made to "Management of the Money Fund--Management and Advisory
Arrangements" in the Prospectus for certain information concerning the
management and advisory arrangements of the Money Fund.

Subject to the direction of the Board of Trustees, the Manager performs, or
arranges for affiliates to perform, pursuant to the Management Agreement, the
management and administrative services necessary for the operation of the Money
Fund. The Manager and its affiliates will provide a variety of administrative
and operational services to shareholders of the Money Fund, including
processing services related to the purchase and redemption of shares and the
general handling of shareholder relations. The Manager is responsible for the
actual management of the Money Fund's portfolio and constantly reviews the
Money Fund's holdings in light of its own research analysis and that from other
relevant sources. The responsibility for making decisions to buy, sell or hold
a particular security rests with the Manager, subject to review by the
Trustees. The Manager provides the Money Fund with office space, equipment and
facilities and such other services as the Manager, subject to supervision and
review by the Trustees, shall from time to time determine to be necessary to
perform its obligations under the Management Agreement.

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

7
<PAGE>

The Manager presently receives a fee from the Money Fund at the end of each
month at the annual rate of 0.50% of the first $500 million of average daily
net assets of the Money Fund, 0.425% of average daily net assets in excess of
$500 million but not exceeding $1 billion, and 0.375% of average daily net
assets in excess of $1 billion. For the fiscal years ended February 28, 1997,
February 29, 1996 and February 28, 1995, the total management fee payable by
the Money Fund to the Manager was $8,657,674, $7,171,703 and $5,722,106,
respectively.

In the interest of minimizing the expenses of the Money Fund, the Manager has
agreed voluntarily to assume a portion of the expenses of the Money Fund. The
Manager may discontinue or reduce such assumption of expenses at any time
without notice. For the fiscal years ended February 28, 1997, February 29, 1996
and February 28, 1995, the Manager paid $830,366, $671,436 and $517,025,
respectively, to the Money Fund pursuant to such arrangement.

The Management Agreement obligates the Manager to provide advisory,
administrative and management services, to furnish office space and facilities
for management of the affairs of the Money Fund, to pay all compensation of and
furnish office space for officers and employees of the Money Fund, as well as
the fees of all Trustees of the Money Fund who are affiliated persons of ML &
Co. or any of its subsidiaries. The Money Fund pays all other expenses incurred
in its operations, including, among other things, organizational expenses,
taxes, expenses for legal and auditing services, costs of printing proxies,
shareholder reports, prospectuses and statements of additional information
(except to the extent paid by the distributors), charges of the custodian and
transfer agent, expenses of redemption of shares, Commission fees, expenses of
registering the shares under Federal and state securities laws, fees, and
expenses of non-interested Trustees, accounting and pricing costs (including
the daily calculation of net asset value), insurance, interest, expenses of
portfolio transactions, litigation and other extraordinary or nonrecurring
expenses, and other expenses properly payable by the Money Fund. Accounting
services are provided to the Money Fund by the Manager and the Money Fund
reimburses the Manager for its costs in connection with such services. Merrill
Lynch and Broadcort will also pay for other supplementary sales literature.

For information as to the distribution fee paid by the Money Fund to Merrill
Lynch and Broadcort pursuant to the Distribution Agreement, see "Purchase and
Redemption of Shares" below.

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

PURCHASE AND REDEMPTION OF SHARES

Reference is made to "Purchase of Shares" and "Redemption of Shares" in the
Prospectus for certain information as to the purchase and redemption of Money
Fund shares.

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<PAGE>

The Money Fund has entered into a distribution agreement with Merrill Lynch
and Broadcort as the distributors (the "Distribution Agreement"). The
Distribution Agreement obligates Merrill Lynch and Broadcort to pay certain
expenses in connection with the offering of the shares of the Money Fund. After
the prospectuses, statements of additional information and periodic reports
have been prepared, set in type and mailed to shareholders, Merrill Lynch and
Broadcort will pay for the printing and distribution of copies thereof used in
connection with the offering to investors. Merrill Lynch and Broadcort will
also pay for other supplementary sales literature and advertising costs. The
Distribution Agreement is subject to the same renewal requirements and
termination provisions as the Management Agreement described above.

The Money Fund has also adopted a Distribution and Shareholder Servicing Plan
in compliance with Rule 12b-1 under the Investment Company Act (the
"Distribution Plan") pursuant to which Merrill Lynch and Broadcort receive a
distribution fee under the Distribution Agreement from the Money Fund at the
end of each month at the annual rate of 0.125% of average daily net assets of
the Money Fund attributable to subscribers to the Services, to investors
maintaining securities accounts at Merrill Lynch or at firms which use the
clearing facilities of Broadcort who are not subscribers to such programs and
to investors maintaining accounts directly with the Transfer Agent, except that
the value of Money Fund shares in accounts maintained directly with the
Transfer Agent which are not serviced by Merrill Lynch financial consultants
will be excluded. The Distribution Plan reimburses Merrill Lynch and Broadcort
only for actual expenses incurred in the fiscal year in which the fee is paid.
The Merrill Lynch distribution fee is to compensate Merrill Lynch financial
consultants and other directly involved Merrill Lynch personnel for selling
shares of the Money Fund and for providing direct personal services to
shareholders. The Broadcort distribution fee is to compensate selected dealers
for activities and services related to the sale, promotion and marketing of
shares of the Money Fund. The distribution fee is not compensation for the
administrative and operational services rendered to the shareholders by Merrill
Lynch which are covered by the Management Agreement (see "Management of the
Money Fund -- Management and Advisory Arrangements") between the Money Fund and
the Manager. For the fiscal years ended February 28, 1997, February 29, 1996
and February 28, 1995, $2,519,882, $2,066,718, and $1,581,431, respectively,
were paid to Merrill Lynch and Broadcort pursuant to the Distribution Plan. All
of the amounts expended for the fiscal years ended February 28, 1997, February
29, 1996 and February 28, 1995 were allocated to Merrill Lynch and Broadcort
personnel and to related administrative costs.

The payment of the distribution fee under the Distribution Agreement is
subject to the provisions of the Distribution Plan and Rule 12b-1. Among other
things, the Distribution Plan provides that Merrill Lynch and Broadcort shall
each provide and the Trustees of the Money Fund shall review quarterly reports
regarding the payment of the respective distribution fees during such period.
In their consideration of the Distribution Plan, the Trustees must consider all
factors they deem relevant, including information as to the benefits of the
Distribution Plan to the Money Fund and its shareholders. The Distribution Plan
further provides that, so long as the Distribution Plan remains in effect, the
selection and nomination of Trustees of the Money Fund who are not "interested
persons" of the Money Fund as defined in the Investment Company Act
("Independent Trustees") shall be committed to the discretion of the
Independent Trustees then in office. The Distribution Plan can be terminated at
any time, without penalty, by the vote of a majority of the Independent
Trustees or by the vote of the holders of a majority of the outstanding voting
securities of the Money Fund. Finally, the Distribution Plan cannot be amended
to increase materially the amount to be spent

9
<PAGE>

by the Money Fund thereunder without shareholder approval, and all material
amendments are required to be approved by vote of the Trustees of the Money
Fund, including a majority of the Independent Trustees, cast in person at a
meeting called for that purpose.

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

PORTFOLIO TRANSACTIONS

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

The money market securities in which the Money Fund invests are traded
primarily in the over-the-counter ("OTC") market. Bonds and debentures are
usually traded OTC, but may be traded on an exchange. Where possible, the Money
Fund will deal directly with the dealers who make a market in the securities
involved except in those circumstances where better prices and execution are
available elsewhere. Such dealers usually are acting as principal for their own
accounts. On occasion, securities may be purchased directly from the issuer.
The money market securities in which the Money Fund invests are generally
traded on a net basis and do not normally involve either brokerage commissions
or transfer taxes. The cost of executing portfolio securities transactions of
the Money Fund will primarily consist of dealer spreads and underwriting
commissions. Under the Investment Company Act, persons affiliated with the
Money Fund are prohibited from dealing with the Money Fund as a principal in
the purchase and sale of securities unless a permissive order allowing such
transactions is obtained from the Commission. Since OTC transactions are
usually principal transactions, affiliated persons of the Money Fund may not
serve the Money Fund as dealers in connection with such transactions, except
pursuant to the permissive order described below. However, affiliated persons
of the Money Fund may serve as its brokers in OTC transactions conducted on an
agency basis. The Money Fund may not purchase securities from any underwriting
syndicate of which Merrill Lynch is a member, except in accordance with
applicable rules under the Investment Company Act.

10
<PAGE>

The Commission has issued an exemptive order permitting all Merrill Lynch-
sponsored money market funds, including the Money Fund, to conduct principal
transactions with Merrill Lynch Government Securities Inc. ("GSI") in U.S.
Government and U.S. Government agency securities, with Merrill Lynch Money
Markets Inc. ("MMI") in certificates of deposit and other short-term bank money
instruments and commercial paper and with Merrill Lynch in fixed income
securities including medium-term notes. This order contains a number of
conditions, including conditions designed to insure that the price to the Money
Fund from GSI, MMI or Merrill Lynch is at least as favorable as that available
from other sources. GSI, MMI and Merrill Lynch have informed the Money Fund
that they will in no way, at any time, attempt to influence or control the
activities of the Money Fund or the Manager in placing such principal
transactions. The permissive order allows GSI, MMI or Merrill Lynch to receive
a dealer spread on any transaction with the Money Fund no greater than its
customary dealer spread for transactions of the type involved. Generally such
spreads do not exceed 0.25% of the principal amount of the securities involved.
During the fiscal years ended February 28, 1997, February 29, 1996 and February
28, 1995, the Money Fund engaged in 33, 26 and 33 such transactions,
respectively, aggregating approximately $600.6 million, $454.1 million and
$467.1 million, respectively.

The Trustees of the Money Fund have considered the possibilities of
recapturing for the benefit of the Money Fund expenses of possible portfolio
transactions, such as dealer spreads and underwriting commissions, by
conducting such portfolio transactions through affiliated entities, including
GSI, MMI and Merrill Lynch. For example, dealer spreads received by GSI, MMI or
Merrill Lynch on transactions conducted pursuant to the permissive order
described above could be offset against the management fee payable by the Money
Fund to the Manager. After considering all factors deemed relevant, the
Trustees made a determination not to seek such recapture. The Trustees will
reconsider this matter from time to time. The Manager has arranged for the
Custodian to receive any tender offer solicitation fees on behalf of the Money
Fund payable with respect to portfolio securities of the Money Fund.

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

11
<PAGE>

DETERMINATION OF NET ASSET VALUE

The net asset value of the Money Fund is determined by the Manager at 12
noon, New York time, on each business day the New York Stock Exchange or New
York banks are open for business. As a result of this procedure, the net asset
value is determined each business day except for days on which both the New
York Stock Exchange ("NYSE") and New York banks are closed. Both the NYSE and
New York banks are closed for New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value is determined under the "penny rounding" method by adding the value of
all securities and other assets in the portfolio, deducting the portfolio's
liabilities, dividing by the number of shares outstanding and rounding the
result to the nearest whole cent.

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

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

Since the net income of the Money Fund is determined and declared as a
dividend immediately prior to each time the net asset value of the Money Fund
is determined, the net asset value per share of the Money Fund normally remains
at $1.00 per share immediately after each such dividend declaration. Any
increase in the value of a shareholder's investment in the Money Fund,
representing the reinvestment of dividend income, is reflected by an increase
in the number of shares in the account and any decrease in the value of a
shareholder's investment may be reflected by a decrease in the number of shares
in the account. See "Taxes" below.

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<PAGE>

YIELD INFORMATION

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

The yield on the Money Fund's shares normally will fluctuate on a daily
basis. Therefore, the yield for any given past period is not an indication or
representation by the Money Fund of future yields or rates of return on its
shares. The yield is affected by such factors as changes in interest rates on
money market securities, average portfolio maturity, the types and quality of
portfolio securities held and operating expenses.

TAXES
FEDERAL

Dividends paid by the Money Fund from its ordinary income or from an excess
of net short-term capital gains over net long-term capital losses: (together
referred to hereafter as "ordinary income dividends") are taxable to
shareholders as ordinary income. Distributions made from an excess of net long-
term capital gains over net short-term capital losses ("capital gain
dividends") are taxable to shareholders as long-term capital gains, regardless
of the length of time the shareholder has owned Money Fund shares. Any loss
upon the sale or exchange of Money Fund shares held for six months or less,
however, will be treated as long-term capital loss to the extent of any capital
gain dividends received by the shareholder. Distributions in excess of the
Fund's earnings and profits will first reduce the adjusted tax basis of a
holder's shares and, after such adjusted tax basis is reduced to zero, will
constitute capital gains to such holder (assuming the shares are held as a
capital asset).

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<PAGE>

dividends received deduction allowed to corporations under the Code. If the
Money Fund pays a dividend in January which was declared in the previous
October, November or December to shareholders of record on a specified date in
one of such months, then such dividend will be treated for tax purposes as
being paid by the Money Fund and received by its shareholders on December 31 of
the year in which such dividend was declared.

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

Under certain provisions of the Code, some shareholders may be subject to a
31% withholding tax on ordinary income dividends, capital gain dividends and
redemption payments ("backup withholding"). Generally, shareholders subject to
backup withholding will be those for whom no certified taxpayer identification
number is on file with the Money Fund or who, to the Money Fund's knowledge,
have furnished an incorrect number. When establishing an account, an investor
must certify under penalty of perjury that such number is correct and that such
investor is not otherwise subject to backup withholding.

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

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<PAGE>

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

GENERAL INFORMATION

DESCRIPTION OF SHARES

The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest, par value $.10 per share, of
a single class and to divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial
interests in the Money Fund. Each share represents an equal proportionate
interest in the Money Fund with each other share. Upon liquidation of the Money
Fund, shareholders are entitled to share pro rata in the net assets of the
Money Fund available for distribution to shareholders. Shares have no
preemptive or conversion rights. The rights of redemption are described
elsewhere herein and in the Prospectus. Shares are fully paid and non-
assessable by the Money Fund.

Shareholders are entitled to one vote for each full share held and fractional
votes for fractional shares held in the election of Trustees (to the extent
hereafter provided) and on other matters submitted to the vote of shareholders.
There will normally be no meetings of shareholders for the purpose of electing
Trustees unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time the Trustees
then in office will call a shareholders' meeting for the election of Trustees.
Shareholders may, in accordance with the terms of the Declaration of Trust,
cause a meeting of shareholders to be held for the purpose of voting on the
removal of Trustees. Voting rights are not cumulative, so that the holders of
more than 50% of the shares voting in the election of Trustees can, if they
choose to do so, elect all the Trustees of the Money Fund, in which event the
holders of the remaining shares are unable to elect any person as a Trustee. No
amendment may be made to the Declaration of Trust without the affirmative vote
of a majority of the outstanding shares of the Money Fund except under certain
limited circumstances set forth in the Declaration of Trust.

CUSTODIAN

State Street Bank and Trust Company, P.O. Box 1713, Boston, Massachusetts
02101 (the "Custodian"), acts as custodian of the Money Fund's assets. The
Custodian is responsible for safeguarding and controlling the Money Fund's cash
and securities, handling the receipt and delivery of securities and collecting
interest on the Money Fund's investments.

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<PAGE>

TRANSFER AGENT

Merrill Lynch Financial Data Services, Inc., 4800 Deer Lake Drive East,
Jacksonville, Florida 32246-6484 (the "'Transfer Agent"), acts as the Money
Fund's transfer agent. The Transfer Agent is responsible for the issuance,
transfer and redemption of shares and the opening, maintenance and servicing of
shareholder accounts.

INDEPENDENT AUDITORS

Deloitte & Touche LLP, 117 Campus Drive, Princeton, New Jersey 08540, has
been selected as the independent auditors of the Money Fund. The selection of
independent auditors is subject to ratification by the Money Fund's
shareholders. The independent auditors are responsible for auditing the annual
financial statements of the Money Fund.

LEGAL COUNSEL

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

REPORTS TO SHAREHOLDERS

Merrill Lynch Financial Data Services, Inc.
P.O. Box 45290
Jacksonville, FL 32232-5290

ADDITIONAL INFORMATION

The Prospectus and Statement of Additional Information with respect to the
shares of the Money Fund do not contain all the information set forth in the
Registration Statement and the exhibits relating thereto, which the Money Fund
has filed with the Commission, Washington, D.C., under the Securities Act of
1933, as amended and the Investment Company Act, to which reference is hereby
made.

The Declaration of Trust establishing the Money Fund, as amended (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts. The Declaration provides that the name "CBA (R) Money Fund"
refers to the Trustees under the Declaration collectively as Trustees, but not
as individuals or personally; and no Trustee, shareholder, officer, employee or
agent of the Money Fund shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim or otherwise in connection with the affairs of said Money Fund but the
"Trust Property" only shall be liable.

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<PAGE>

APPENDIX

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

COMMERCIAL PAPER AND BANK MONEY INSTRUMENTS

Commercial paper with the greatest capacity for timely payment is rated A by
Standard & Poor's Ratings Services ("S&P"). Issues within this category are
further redefined with designations 1, 2 and 3 to indicate the relative degree
of safety; A-1, the highest of the three, indicates that the capacity for
timely repayment is strong; A-2 indicates that capacity for timely repayment is
satisfactory; and A-3 indicates that the capacity for timely repayment is
adequate, but adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.

Moody's Investors Service, Inc. ("Moody's") employs the designations of
Prime-1, Prime-2 and Prime-3 to indicate the relative repayment ability of
rated issuers. Prime-1 issuers have a superior ability for repayment. Prime-2
issuers have a strong ability for repayment. Prime-3 issuers have an acceptable
ability for repayment.

Commercial paper rated A.1+ by IBCA Limited or its affiliate IBCA Inc.
(together, "IBCA") are obligations supported by the highest capacity for timely
repayment. Commercial paper rated A.1 are obligations supported by a strong
capacity for timely repayment. Commercial paper rated A.2 are obligations
supported by a satisfactory capacity for timely repayment, although such
capacity may be susceptible to adverse changes in business, economic or
financial conditions.

Fitch Investors Service, Inc. ("Fitch") employs the rating F-1+ to indicate
issues regarded as having the strongest degree of assurance for timely payment.
Issues assigned the rating F-1 reflect an assurance of timely payment only
slightly less in degree than issues rated F-1+. Issues assigned the rating F-2
indicates a satisfactory degree of assurance for timely payment, but the margin
of safety is not as great as for issuers assigned F-1+ and F-1 ratings.

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

Thomson BankWatch, Inc. ("Thomson") employs the designation TBW-1 to indicate
issues regarded as having a very high degree of likelihood that principal and
interest will be paid on a timely basis. TBW-2 is the second highest category
and indicates that while the degree of safety regarding timely repayment of
principal and interest is strong, the relative degree of safety is not as high
as for issues rated TBW-1.

CORPORATE BONDS

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

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<PAGE>

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

Bonds rated AAA by IBCA are obligations for which there is the lowest
expectation of investment risk. Capacity for timely repayment of principal and
interest is substantial such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk significantly.
Bonds rated AA are obligations for which there is a very low expectation of
investment risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic or financial conditions may
increase investment risk, albeit not very significantly.

Bonds rated AAA by Fitch are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events. Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds rated AAA.

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

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

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<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Trustees and Shareholders, CBA Money Fund:

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of CBA Money Fund as of February 28, 1997, the
related statements of operations for the year then ended and changes in net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended.
These financial statements and the financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
February 28, 1997 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of CBA Money Fund as
of February 28, 1997, the results of its operations, the changes in its net
assets, and the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.

Deloitte & Touche LLP
Princeton, New Jersey

April 2, 1997

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<PAGE>

CBA Money Fund
Schedule of Investments as of February 28, 1997 (in Thousands)

Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Bank Notes -- 1.1%
<S> <C> <C> <C> <C>
First Bank N.A., $25,000 5.283% 1/22/98 $24,982
Milwaukee+
Total Bank Notes (Cost -- $24,982) 24,982

Certificates of Deposit -- 3.8%
Bankers Trust Company 25,000 5.40 5/05/97 24,998
Chase Manhattan 35,000 5.52 7/08/97 34,997
Bank, NY
Morgan Guaranty 25,000 5.71 1/06/98 24,971
Trust Company, NY
Total Certificates of Deposit
(Cost -- $84,992) 84,966

Certificates of Deposit -- Yankee -- 1.6%
ABN-AMRO 10,000 5.68 12/22/97 9,987
Bank N.V.
Bayerische Landesbank 15,000 5.50 12/04/97 14,960
Girozentrale
Deutsche Bank NY 10,000 5.63 2/26/98 9,979
Total Certificates of Deposit -- Yankee
(Cost -- $34,981) 34,926

Commercial Paper -- 54.8%
ARCO British Limited 17,337 5.35 3/12/97 17,306
Allomon Funding 10,242 5.28 3/19/97 10,214
Corporation 28,179 5.28 3/20/97 28,096
Alpine Securitization 25,000 5.33 3/04/97 24,985
Corp. 19,576 5.28 4/03/97 19,478
American Honda 25,000 5.28 4/02/97 24,879
Finance Corp.
Atlantic Asset 20,263 5.50 3/17/97 20,212
Securitization Corp. 29,737 5.28 3/26/97 29,624
Bank of Scotland 20,000 5.35 4/02/97 19,901
Treasury Services PLC 15,000 5.30 5/12/97 14,837
Beta Finance Inc. 25,000 5.35 4/07/97 24,858
16,000 5.35 4/17/97 15,886
CXC Incorporated 5,000 5.28 4/08/97 4,971
Caisse D'amortissement 25,000 5.38 7/09/97 24,511
de la Dette Sociale
Chrysler Financial 25,000 5.33 3/20/97 24,926
Corporation
Columbia/HCA 20,000 5.30 4/02/97 19,903
Healthcare Corporation 20,000 5.28 5/30/97 19,730
Commonwealth Bank 25,000 5.45 3/27/97 24,899
of Australia 15,000 5.36 7/31/97 14,658
35,000 5.36 8/05/97 34,171
Countrywide Home
Loans, Inc. 25,000 5.33 3/05/97 24,981
Credit Suisse 10,000 5.32 4/28/97 9,912
First Boston, Inc.
Eiger Capital Corp. 24,937 5.32 3/12/97 24,893
Eureka 25,000 5.32 3/25/97 24,908
Securitization Inc. 20,000 5.30 4/03/97 19,900
Finova Capital Corp. 25,000 5.38 4/16/97 24,826
25,000 5.38 7/16/97 24,485
Ford Motor Credit Co. 25,000 5.48 3/17/97 24,936
25,000 5.48 3/24/97 24,910
GTE Corporation 25,000 5.32 3/13/97 24,952
General Motors 25,000 5.31 5/23/97 24,688
Acceptance Corp. 30,000 5.45 7/10/97 29,409
15,000 5.41 7/24/97 14,673
25,000 5.40 7/25/97 24,452
Goldman Sachs 25,000 5.30 5/30/97 24,662
Group, L.P.
Industrial Bank of Korea 5,000 5.37 3/06/97 4,995
10,000 5.35 4/15/97 9,932
7,000 5.37 5/13/97 6,923
17,000 5.32 5/22/97 16,790
International Lease 25,000 5.36 7/23/97 24,459
Finance Corp.
International 10,000 5.28 3/18/97 9,974
Securitization Corp. 40,000 5.28 3/20/97 39,883
Korea Development 6,700 5.32 3/06/97 6,694
Bank 15,000 5.38 4/28/97 14,868
25,000 5.33 5/12/97 24,729
Mont Blanc 28,251 5.28 4/11/97 28,077
Capital Corp.
Morgan Stanley 25,000 5.34 4/25/97 24,792
Group, Inc.
NYNEX Corporation 10,000 5.28 3/26/97 9,962
National Fleet 20,000 5.32 4/02/97 19,902
Funding Corp. 18,000 5.28 4/23/97 17,857
New Center Asset Trust 25,000 5.49 3/19/97 24,929
15,000 5.35 4/01/97 14,928
Old Line Funding Corp. 20,000 5.32 3/03/97 19,991
30,000 5.35 3/10/97 29,955
25,000 5.30 3/21/97 24,923
20,000 5.29 4/03/97 19,900
RTZ America, Inc. 10,100 5.30 5/16/97 9,984
Santander Finance 10,000 5.40 7/23/97 9,784
(Delaware) Inc.
Transamerica Finance 20,000 5.33 5/30/97 19,730
Corp. 15,000 5.32 6/17/97 14,757
Westpac Capital 12,180 5.30 5/14/97 12,044
Corporation
Total Commercial Paper
(Cost -- $1,225,398) 1,225,394
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
Corporate Notes -- 11.1%
<S> <C> <C> <C> <C>
Abbey National 25,000 5.297 5/16/97 24,995
Treasury Services PLC+ 25,000 5.36 2/10/98 24,984
20,000 5.34 2/25/98 19,985
Asset-Backed Securities 25,000 5.422 10/15/97 25,000
Investment Trust (1996-M)+
Associates Corp. of 6,500 9.70 5/01/97 6,539
North America 4,000 6.80 12/29/97 4,029
CIT Group Holdings, 25,000 5.36 10/27/97 24,989
Inc. (The)+ 25,000 5.35 12/23/97 24,982
Chase Manhattan Auto 3,938 5.489 1/15/98 3,938
Owner Trust (1996-C)
First Bank Systems+ 15,000 5.363 12/17/97 15,000
LABS Trust 24,261 5.438 12/29/97 24,261
(Series 1996-C),
Senior Notes
LINCS (Series 1996-3)+ 10,000 5.422 1/12/98 10,000
Morgan Guaranty Trust+ 15,000 5.365 2/19/98 14,992
SMM Trust Certificate 25,000 5.422 1/15/98 25,000
(1997-Q)+
Total Corporate Notes
(Cost -- $248,701) 248,694

Master Notes & Funding Agreements -- 2.9%
Goldman Sachs 40,000 5.37 8/01/97 40,000
Group, L.P.+
Jackson National Life 25,000 5.47 4/08/97 25,000
Insurance Co.+
Total Master Notes & Funding Agreements
(Cost -- $65,000) 65,000

US Government & Agency Obligations --
Non-Discount Notes -- 23.5%
Federal Farm Credit 10,000 5.85 10/01/97 10,017
Banks
Federal Home Loan 5,500 5.50 11/10/97 5,497
Banks 30,000 5.33+ 12/10/97 29,989

Federal National 15,000 5.30+% 3/14/97 15,000
Mortgage Association 14,000 5.252+ 4/15/97 13,998
20,000 5.298+ 4/28/97 19,998
8,000 5.268+ 5/14/97 7,999
25,000 5.24+ 5/22/97 24,996
29,000 5.32+ 7/16/97 28,993
15,000 5.34+ 8/01/97 14,997
13,000 5.325+ 9/03/97 12,995
10,000 5.33+ 9/09/97 9,996
9,000 5.33+ 9/29/97 8,997
16,000 5.315+ 10/20/97 15,991
5,000 5.79 11/14/97 4,998
25,000 5.38+ 4/24/98 24,989
Student Loan 25,000 5.74 10/03/97 25,030
Marketing Association 5,000 5.49+ 10/30/97 5,004
US Treasury Notes 40,000 6.50 5/15/97 40,087
15,000 6.125 5/31/97 15,019
65,000 8.50 7/15/97 65,721
25,000 5.875 7/31/97 25,047
10,000 6.50 8/15/97 10,047
13,000 6.00 8/31/97 13,024
16,500 5.75 9/30/97 16,521
30,000 8.75 10/15/97 30,581
5,000 5.25 12/31/97 4,984
7,000 5.00 1/31/98 6,953
18,000 7.25 2/15/98 18,236

Total US Government & Agency Obligations --
Non-Discount Notes (Cost -- $525,646) 525,704
<CAPTION>
Repurchase Agreements** -- 1.0%
Face Amount Issue
<S> <C> <C>
$21,375 Fuji Securities, Inc., purchased on
2/28/1997 to yield 5.40% to 3/03/1997 21,375
Total Repurchase Agreements
(Cost -- $21,375) 21,375
Total Investments (Cost -- $2,231,075) -- 99.8% 2,231,041
Other Assets Less Liabilities -- 0.2% 5,619
----------
Net Assets -- 100.0% $2,236,660
</TABLE>

* Commercial Paper and certain US Government & Agency Obligations are traded on
a discount basis; the interest rates shown are the discount rates paid at the
time of purchase by the Fund. Other securities bear interest at the rates
shown, payable at fixed dates or upon maturity. Interest rates on variable
rate securities are adjusted periodically based upon appropriate indexes; the
interest rates shown are those in effect at February 28, 1997.
** Repurchase Agreements are fully collateralized by US Government Obligations.
+ Variable Rate Notes.

See Notes to Financial Statements.

21
<PAGE>

CBA Money Fund
Statement of Assets and Liabilities as of February 28, 1997

Assets:
<S> <C> <C>
Investments, at value (identified cost -- $2,231,075,164*) (Note 1a) $2,231,040,808
Interest receivables 7,801,085
Prepaid registration fees and other assets (Note 1d) 139,727
--------------
Total assets 2,238,981,620
--------------

Liabilities:
Payables:
Investment adviser (Note 2) $648,689
Distributor (Note 2) 605,214
Dividends to shareholders (Note 1e) 529
Beneficial interest redeemed 7 1,254,439
--------
Accrued expenses and other liabilities 1,067,177
--------------
Total liabilities 2,321,616
--------------

Net Assets $2,236,660,004
==============

Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares authorized $223,669,436
Paid-in capital in excess of par 2,013,024,924
Unrealized depreciation on investments -- net (34,356)
--------------

Net Assets -- Equivalent to $1.00 per share based on 2,236,694,361 shares of beneficial
interest outstanding $2,236,660,004
==============
</TABLE>

* The aggregate cost of investments at February 28, 1997 for Federal income tax
purposes was $2,231,091,639. As of February 28, 1997, net unrealized
depreciation for Federal income tax purposes amounted to $50,831, of which
$153,736 related to appreciated securities and $204,567 related to depreciated
securities.

See Notes to Financial Statements.

22
<PAGE>

CBA MONEY FUND
Statement of Operations for the Year Ended February 28, 1997

<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $113,194,767

Expenses:
Investment advisory fees (Note 2) $8,657,674
Transfer agent fees (Note 2) 3,420,214
Distribution fees (Note 2) 2,519,882
Registration fees (Note 1d) 204,304
Accounting services (Note 2) 143,588
Printing and shareholder reports 120,383
Custodian fees 116,213
Professional fees 64,698
Trustees' fees and expenses 40,616
Interest expense 831
Other 26,485
----------
Total expenses before reimbursement 15,314,888
Reimbursement of expenses (Note 2) (830,366)
----------
Total expenses after reimbursement 14,484,522
-------------
Investment Income -- Net 98,710,245
Realized Gain on Investments -- Net (Note 1c) 46,265
Change in Unrealized Appreciation on Investments -- Net (81,776)
-------------
Net Increase in Net Assets Resulting from Operations $98,674,734
=============

</TABLE>

<TABLE>
<CAPTION>
CBA Money Fund
Statements of Changes in Net Assets For the For the
Year Ended Year Ended
February 28, 1997 February 29, 1996
Increase (Decrease) in Net Assets:
<S> <C> <C>
Operations:
Investment income -- net $98,710,245 $87,416,442
Realized gain on investments -- net 46,265 248,237
Change in unrealized appreciation on investments -- net (81,776) (12,858)
-------------- --------------
Net increase in net assets resulting from operations 98,674,734 87,651,821
-------------- --------------

Dividends & Distributions to Shareholders (Note 1e):
Investment income -- net (98,710,245) (87,416,442)
Realized gain on investments -- net (46,265) (248,237)
-------------- --------------
Net decrease in net assets resulting from dividends and distributions to shareholders (98,756,510) (87,664,679)
-------------- --------------

Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 5,723,246,368 5,183,058,051
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions (Note 1e) 98,549,542 87,477,649
-------------- --------------
5,821,795,910 5,270,535,700
Cost of shares redeemed (5,573,053,954) (4,688,838,267)
-------------- --------------
Net increase in net assets derived from beneficial interest transactions 248,741,956 581,697,433
-------------- --------------

Net Assets:
Total increase in net assets 248,660,180 581,684,575
Beginning of year 1,987,999,824 1,406,315,249
-------------- --------------
End of year $2,236,660,004 $1,987,999,824
============== ==============
</TABLE>

See Notes to Financial Statements.

23
<PAGE>

CBA Money Fund
Financial Highlights

The following per share data and ratios have been derived For the For the
from information provided in the financial statements. Year Ended Year Ended
February 28, February 29, For the Year Ended February 28,
1997 1996 1995 1994 1993
Increase (Decrease) in Net Asset Value:

<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Investment income -- net .0475 .0524 .0396 .0260 .0304
Realized and unrealized gain (loss) on investments -- net --* .0001 .0005 (.0004) .0017
---------- ---------- ---------- ---------- ----------
Total from investment operations .0475 .0525 .0401 .0256 .0321
---------- ---------- ---------- ---------- ----------

Less dividends and distributions:
Investment income -- net (.0475) (.0524) (.0396) (.0260) (.0304)
Realized gain on investments -- net --* (.0001) --* (.0004) (.0014)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.0475) (.0525) (.0396) (.0264) (.0318)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ==========

Total Investment Return 4.87% 5.39% 4.04% 2.67% 3.23%
========== ========== ========== ========== ==========

Ratios to Average Net Assets:
Expenses, net of reimbursement .69% .75% .77% .71% .71%
========== ========== ========== ========== ==========
Expenses .73% .79% .81% .75% .75%
========== ========== ========== ========== ==========

Investment income and realized gain on
investments -- net 4.71% 5.22% 3.98% 2.62% 3.19%
========== ========== ========== ========== ==========

Supplemental Data:
Net assets, end of year (in thousands) $2,236,660 $1,988,000 $1,406,315 $1,287,456 $1,242,686
========== ========== ========== ========== ==========

</TABLE>

* Amount is less than $.0001 per share.

See Notes to Financial Statements.

24
<PAGE>

CBA Money Fund
Notes to Financial Statements

1. Significant Accounting Policies:
CBA Money Fund (the "Fund") is a money fund whose shares are offered to
subscribers to the Capital Builder Account service of Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S") and to subscribers to the
Broadcort Capital Account service of Broadcort Capital Corp.
("Broadcort"). Shares may also be purchased by individual investors not
subscribing to these services, but such investors will not receive any
of the special features offered as a part of such services. The Fund is
registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. The following is a summary of
significant accounting policies followed by the Fund.

(a) Valuation of investments -- Portfolio securities with remaining
maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities with remaining maturities of
greater than sixty days, for which market quotations are readily
available, will be valued at market value. When securities are valued
with sixty days or less to maturity, the difference between the
valuation existing on the sixty-first day before maturity and maturity
value is amortized on a straight-line basis to maturity. Other
securities held by the Fund will be valued at their fair value as
determined in good faith by or under the direction of the Board of
Trustees.

(b) Income taxes -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Therefore, no Federal income tax provision is required.

(c) Security transactions and investment income -- Security transactions
are recorded on the dates the transactions are entered into (the trade
dates). Realized gains and losses on security transactions are
determined on the identified cost basis. Interest income (including
amortization of premium and discount) is recognized on the accrual
basis.

(d) Prepaid registration fees -- Prepaid registration fees are charged
to expense as the related shares are issued.

(e) Dividends and distributions to shareholders -- The Fund declares
dividends daily and reinvests daily such dividends (net of non-resident
alien tax and back-up withholding tax withheld) in additional fund
shares at net asset value. Dividends and distributions are declared from
the total of net investment income and net realized gain or loss on
investments.

2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is Princeton
Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of Merrill
Lynch & Co., Inc. ("ML & Co."), which is the limited partner.

FAM (the "Manager") is responsible for the management of the Fund's
portfolio and provides the necessary personnel, facilities, equipment
and certain other services necessary to the operations of the Fund. For
such services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets at the following annual rates: 0.50% of
the first $500 million of average daily net assets, 0.425% of average
daily net assets in excess of $500 million but not exceeding
$1 billion, and 0.375% of average daily net assets in excess of $1
billion. During the year ended February 28, 1997, the Manager earned
$8,657,674, of which $830,366 was voluntarily waived.

25
<PAGE>

The Fund has adopted a Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
pursuant to which MLPF&S and Broadcort each receive a distribution fee
under the Distribution Agreement from the Fund at the end of each month
at the annual rate of 0.125% of average daily net assets of the Fund
attributable to subscribers to the respective Capital Builder Account
and Broadcort Capital Account programs. The MLPF&S distribution fee is
to compensate MLPF&S financial consultants and other directly involved
branch office personnel for selling shares of the Fund and for providing
direct personal services to shareholders. The Broadcort distribution fee
is to compensate selected dealers for activities and services related to
the sale, promotion and marketing of shares of the Fund. The
distribution fee is not compensation for the administrative and
operational services rendered to the Fund by MLPF&S or Broadcort in
processing share orders and administering shareholder accounts.

Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-owned
subsidiary of ML & Co., is the Fund's transfer agent.

Accounting services are provided to the Fund by FAM at cost.

Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLFDS, and/or ML & Co.

3. Beneficial Interest Transactions:
The number of shares purchased and redeemed during the year corresponds
to the amounts included in the Statements of Changes in Net Assets with
respect to net proceeds from sale of shares and cost of shares redeemed,
respectively, since shares are recorded at $1.00 per share.

26
<PAGE>

[This page intentionally left blank]

27
<PAGE>

LOGO MERRILL LYNCH

LOGO CBA(R)
MONEY FUND
STATEMENT OF
ADDITIONAL INFORMATION

LOGO CBA(R)
- --------------------------------------------------------------------------------

Shares of the LOGO CBA(R)
Money Fund are
offered to
participants
in the Capital
Builder SM
Account
service and
various
central asset
account
programs of
Merrill Lynch,
Pierce, Fenner
& Smith
Incorporated,
to
participants
in the
Broadcort
Capital
Account
service of
Broadcort
Capital Corp.
and to
investors
maintaining
accounts
directly with
the Transfer
Agent.
Investors
should be
aware that the
Accounts are
not bank
accounts and
that a
shareholder's
investment in
the Money Fund
is not insured
by any
governmental
agency. As
with any
investment in
securities,
the value of a
shareholder's
investment in
the Money Fund
may fluctuate.

Principal Office of the
Money Fund:

800 Scudders Mill Road
Plainsboro, New Jersey
Mailing Address:
P.O. Box 9011
Princeton, New Jersey
08543-9011

Code #10129-0697 June 23, 1997

<PAGE>

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(A) FINANCIAL STATEMENTS:

Financial Statements Contained in Part A:

Financial Highlights for each of the years in the ten-year period
ended February 28, 1997.

Financial Statements Contained in Part B:

Schedule of Investments as of February 28, 1997.

Statement of Assets and Liabilities as of February 28, 1997.

Statement of Operations for the year ended February 28, 1997.

Statements of Changes in Net Assets for each of the years in the two-
year period ended February 28, 1997.

Financial Highlights for each of the years in the five-year period
ended February 28, 1997.

(B) EXHIBITS:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1 --Second Amended and Restated Declaration of Trust, dated June 13,
1984.(a)
2 --By-Laws of the Registrant.(a)
3 --None.
4 --None.
5(a) --Management Agreement between Registrant and Fund Asset Management,
L.P.(a)
(b) --Supplement to Management Agreement with Fund Asset Management,
L.P.(b)
6 --Form of Distribution Agreement among Registrant, Merrill Lynch,
Pierce, Fenner & Smith
Incorporated and Broadcort Capital Corp. and form of Selected Dealers
Agreement.(a)
7 --None
8 --Form of Custodian Contract between Registrant and State Street Bank
and Trust Company.(a)
9(a) --Transfer Agency, Shareholder Servicing Agency, and Proxy Agency
Agreement between Registrant and Merrill Lynch Financial Data
Services, Inc.(a)
(b) --Form of Capital Builder SM Account Agreement.(a)
(c) --Form of Broadcort Capital Account Agreement.(a)
10 --None.
11 --Consent of Deloitte & Touche LLP, independent auditors for the
Registrant.
12 --None.
13 --Certificate of Fund Asset Management, L.P.(a)
14 --None.
15 --Form of Distribution and Shareholder Servicing Plan pursuant to Rule
12b-1 among Registrant,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bradcord Capi-
tal Corp. and form of Distribution Plan Sub-Agreement.(a)
16 --Schedule for computation of each performance quotation provided in
the Registration Statement
in response to Item 22.(a)
17 --Financial Data Schedule.
</TABLE>
- --------

(a) Previously filed pursuant to the Electronic Data Gathering, Analysis, and
Retrieval ("EDGAR") phase-in requirements as an Exhibit to Post-Effective
Amendment No. 13 to Registrant's Registration Statement on Form N-1A filed
on June 27, 1995.
(b) Previously filed as an Exhibit to Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A filed on June 29, 1994.

C-1
<PAGE>

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

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

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

<TABLE>
<CAPTION>
NUMBER OF
HOLDERS AT
TITLE OF CLASS APRIL 30, 1997
- -------------- --------------
<S> <C>
Shares of beneficial interest, par value $.10 per share.......... 306,595
</TABLE>
- --------
Note: The number of holders shown above includes holders of record plus
beneficial owners whose shares are held of record by Merrill Lynch,
Pierce, Fenner & Smith Incorporated.

ITEM 27. INDEMNIFICATION.

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

"The Trust shall indemnify each of its Trustees, officers, employees, and
agents (including persons who serve at its request as directors, officers
or trustees of another organization in which it has any interest as a
shareholder, creditor or otherwise) against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in compromise, as
fines and penalties, and as counsel fees) reasonably incurred by him in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which he may be involved or with
which he may be threatened, while in office or thereafter, by reason of his
being or having been such a trustee, officer, employee or agent, except
with respect to any matter as to which he shall have been adjudicated to
have acted in bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties; provided, however, that as to any matter disposed
of by a compromise payment by such person, pursuant to a consent decree or
otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless the Trust shall have received a written
opinion from independent legal counsel approved by the Trustees to the
effect that if either the matter of willful misfeasance, gross negligence
or reckless disregard of duty, or the matter of good faith and reasonable
belief as to the best interests of the Trust, had been adjudicated, it
would have been adjudicated in favor of such person. The rights accruing to
any Person under these provisions shall not exclude any other right to
which he may be lawfully entitled; provided that no Person may satisfy any
right of indemnity or reimbursement granted herein or in Section 5.1 or to
which he may be otherwise entitled except out of the property of the Trust,
and no Shareholder shall be personally liable to any Person with respect to
any claim for indemnity or reimbursement or otherwise. The Trustees may
make advance payments in connection with indemnification under this Section
5.3, provided that the indemnified person shall have given a written
undertaking to reimburse the Trust in the event it is subsequently
determined that he is not entitled to such indemnification."

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

In Section 10 of the Distribution Agreement relating to the securities being
offered hereby, the Registrant agrees to indemnify the distributors and each
person, if any, who controls the Distributors within the meaning of the
Securities Act of 1933 (the "1933 Act"), against certain types of civil
liabilities arising in connection with the Registration Statement or
Prospectus.

C-2
<PAGE>

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

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.

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

Merrill Lynch Asset Management L.P. ("MLAM"), an affiliate of FAM, acts as
investment adviser for the following open-end investment companies: Merrill
Lynch Adjustable Rate Securities Fund, Inc., Merrill Lynch Americas Income
Fund, Inc., Merrill Lynch Asset Builder Program, Inc., Merrill Lynch Asset
Growth Fund, Inc., Merrill Lynch Asset Income Fund, Inc., Merrill Lynch
Capital Fund, Inc., Merrill Lynch Developing Capital Markets Fund, Inc.,
Merrill Lynch Dragon Fund, Inc., Merrill Lynch EuroFund, Merrill Lynch
Fundamental Growth Fund, Inc., Merrill Lynch Fund For Tomorrow, Inc., Merrill
Lynch Global Allocation Fund, Inc., Merrill Lynch Global Bond Fund for
Investment and Retirement, Merrill Lynch Global Convertible Fund, Inc.,
Merrill Lynch Global Holdings, Inc., Merrill Lynch Global Resources Trust,
Merrill Lynch Global SmallCap Fund, Inc., Merrill Lynch Global Utility Fund,
Inc., Merrill Lynch Global Value Fund, Inc., Merrill Lynch Intermediate
Government Bond Fund, Merrill Lynch Growth Fund, Merrill Lynch Healthcare
Fund, Inc., Merrill Lynch International Equity Fund, Merrill Lynch Latin
America Fund, Inc., Merrill Lynch Middle East/Africa Fund, Inc., Merrill Lynch
Municipal Series Trust, Merrill Lynch Pacific Fund, Inc., Merrill Lynch Ready
Assets Trusts, Merrill Lynch Retirement Series Trust, Merrill Lynch Series
Fund, Inc., Merrill Lynch Short-Term Global Income Fund, Inc., Merrill Lynch

C-3
<PAGE>

Strategic Dividend Fund, Merrill Lynch Technology Fund, Inc., Merrill Lynch
U.S.A. Government Reserves, Merrill Lynch U.S. Treasury Money Fund, Merrill
Lynch Utility Income Fund, Inc. and Merrill Lynch Variable Series Fund, Inc.,
and for the following closed-end investment companies: Convertible Holdings,
Inc., Merrill Lynch High Income Municipal Bond Fund, Inc. and Merrill Lynch
Senior Floating Rate Fund, Inc.

The address of each of these investment companies is P.O. Box 9011,
Princeton, New Jersey 08543-9011. The address of Merrill Lynch Funds for
Institutions Series is One Financial Center, 15th Floor, Boston, Massachusetts
02111-2646. The address of the Manager, MLAM, Princeton Services, Inc.
("Princeton Services") and Princeton Administrators, L.P. is also P.O. Box
9011, Princeton, New Jersey 08543-9011. The address of Merrill Lynch Funds
Distributor, Inc. ("MLFD") is P.O. Box 9081, Princeton, New Jersey 08543-9081.
The address of Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") and Merrill Lynch & Co., Inc. ("ML & Co.") is World Financial Center,
North Tower, 250 Vesey Street, New York, New York 10281. The address of Merrill
Lynch Financial Data Services, Inc. ("MLFDS") is 4800 Deer Lake Drive East,
Jacksonville, Florida 32246-6484.

Set forth below is a list of each executive officer and partner of the
Manager indicating each business, profession, vocation or employment of a
substantial nature in which each such person or entity has been engaged since
March 1, 1991 for his, her or its own account or in the capacity of director,
officer, employee, partner or trustee. In addition, Mr. Zeikel is President,
Mr. Glenn is Executive Vice President and Mr. Richard is Treasurer of all or
substantially all of the investment companies described in the preceding
paragraph. Messrs. Zeikel, Glenn and Richard also hold the same position with
substantially all of the investment companies advised by MLAM as they do with
those advised by the Manager and Messrs. Giordano, Harvey, Kirstein and Monagle
are directors or officers of one or more of such companies.

<TABLE>
<CAPTION>
POSITION(S) WITH OTHER SUBSTANTIAL BUSINESS,
NAME MANAGER PROFESSION, VOCATION OR EMPLOYMENT
---- ---------------------- -----------------------------------------
<C> <C> <S>
ML & Co................. Limited Partner Financial Services Holding Company;
Limited Partner of MLAM
Princeton Services...... General Partner General Partner of MLAM
Arthur Zeikel........... President President of MLAM; President and Director
of Princeton Services; Director of MLFD;
Executive Vice President of ML & Co.
Terry K. Glenn.......... Executive Vice Executive Vice President of MLAM;
President Executive Vice President and Director of
Princeton Services; Director of MLFDS;
President and Director of MLFD;
President of Princeton
Administrators, L.P.
Vincent R. Giordano..... Senior Vice President Senior Vice President of MLAM; Senior
Vice President of Princeton Services
Elizabeth Griffin....... Senior Vice President Senior Vice President of MLAM; Senior
Vice President of Princeton Services
Norman R. Harvey........ Senior Vice President Senior Vice President of MLAM; Senior
Vice President of Princeton Services
Philip L. Kirstein...... Senior Vice President, Senior Vice President, General Counsel
General Counsel and Secretary of MLAM; Senior Vice
and Secretary President, General Counsel, Director and
Secretary of Princeton Services;
Director of MLFD
</TABLE>

C-4
<PAGE>

<TABLE>
<CAPTION>
POSITION(S) WITH OTHER SUBSTANTIAL BUSINESS,
NAME MANAGER PROFESSION, VOCATION OR EMPLOYMENT
---- --------------------- ------------------------------------------
<S> <C> <C>
Ronald M. Kloss......... Senior Vice President Senior Vice President and Controller
and Controller of MLAM; Senior Vice President and
Controller of Princeton Services
Stephen M.M. Miller..... Senior Vice President Executive Vice President of Princeton
Administrators, L.P.; Senior Vice
President of Princeton Services
Joseph T. Monagle, Jr. . Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
Michael L. Quinn........ Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services; Managing
Director and First Vice President of
Merrill Lynch from 1989 to 1995
Richard L. Reller....... Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
Gerald M. Richard....... Senior Vice President Senior Vice President and Treasurer of
and Treasurer MLAM; Senior Vice President and
Treasurer of Princeton Services; Vice
President and Treasurer of MLFD
Ronald L. Welburn....... Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
</TABLE>

ITEM 29. PRINCIPAL UNDERWRITERS.

(a) Merrill Lynch and Broadcort Capital Corp. ("Broadcort") act as the
principal underwriters for the Registrant. Merrill Lynch also acts as the
principal underwriter for each of the following open-end investment companies
referred to in the first paragraph of Item 28: CMA Money Fund; CMA Treasury
Fund; CMA Tax-Exempt Fund; CMA Multi-State Municipal Series Trust; CMA
Government Securities Fund; The Corporate Fund Accumulation Program, Inc. and
The Municipal Fund Accumulation Program, Inc. and also acts as the principal
underwriter for each of the closed-end investment companies referred to in the
first paragraph of Item 28, and as the depositor of the following unit
investment trusts: The Corporate Income Fund, Municipal Investment Trust Fund,
The ML Trust for Government Guaranteed Securities and The Government Securities
Income Fund.

(b)(1) Set forth below is information concerning each director and executive
officer of Merrill Lynch. The principal business address of each such person is
World Financial Center, North Tower, 250 Vesey Street, New York, New York
10281.

<TABLE>
<CAPTION>
POSITION(S) AND OFFICE(S) POSITION(S) AND OFFICE(S)
NAME WITH MERRILL LYNCH WITH REGISTRANT
---- ------------------------------------- -------------------------
<S> <C> <C>
Stephen L. Hammerman.... Chairman None
Herbert M. Allison, Jr. President and Chief Executive Officer
....................... None
John L. Steffens........ Executive Vice President and Director None
David H. Komansky....... Director None
Barry S. Friedberg...... Executive Vice President None
Edward L. Goldberg...... Executive Vice President None
Jerome P. Kenney........ Executive Vice President None
Thomas H. Patrick....... Executive Vice President None
Winthrop H. Smith, Jr. . Executive Vice President None
Roger M. Vasey.......... Executive Vice President None
George A. Schierren..... General Counsel None
Theresa Lang ........... Treasurer None
Gregory T. Russo........ Secretary None
</TABLE>

C-5
<PAGE>

(b)(2) Set forth below is information concerning each director and executive
officer of Broadcort. The principal business address of each such person is 100
Church Street, New York, New York 10007, except that the address of Messrs.
Hughes. Joyce and Lynch is World Financial Center, North Tower, 250 Vesey
Street, New York, New York 10281.

<TABLE>
<CAPTION>
POSITION(S) AND OFFICE(S) POSITION(S) AND OFFICE(S)
NAME WITH BROADCORT WITH REGISTRANT
---- ------------------------------------- -------------------------
<S> <C> <C>
James P. Smyth.......... President and Director None
Thomas J. Hughes........ Chairman and Director None
Patrick J. Dougherty.... Executive Vice President None
Herbert F. Wortmann..... Senior Vice President and Director None
Thomas M. Joyce......... Director None
Michael J. Lynch........ Director None
Arthur L. Thomas........ Director None
James M. McCue.......... Treasurer and Chief Financial Officer None
George Y. Bramwell...... Secretary None
</TABLE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended, and the Rules
thereunder will be maintained at the offices of the Registrant, 800 Scudders
Mill Road, Plainsboro, New Jersey 08536, and MLFDS, 4800 Deer Lake Drive East,
Jacksonville, Florida 32246-6484.

ITEM 31. MANAGEMENT SERVICES.

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

ITEM 32. UNDERTAKINGS.

(a)Not applicable.

(b)Not applicable.

(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders upon request and without charge.

C-6
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the Township of Plainsboro and State of New Jersey, on the 20th day of June,
1997.

CBA Money Fund
(Registrant)

/s/ Terry K. Glenn
By __________________________________
(TERRY K. GLENN, EXECUTIVE VICE
PRESIDENT)

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSON IN THE CAPACITY AND ON
THE DATE INDICATED.

SIGNATURE TITLE DATE

Arthur Zeikel* President (Principal
- ------------------------------------- Executive Officer)
(ARTHUR ZEIKEL) and Trustee

Gerald M. Richard* Treasurer (Principal
- ------------------------------------- Financial and
(GERALD M. RICHARD) Accounting Officer)

Ronald W. Forbes* Trustee
- -------------------------------------
(RONALD W. FORBES)

Cynthia A. Montgomery* Trustee
- -------------------------------------
(CYNTHIA A. MONTGOMERY)

Charles C. Reilly* Trustee
- -------------------------------------
(CHARLES C. REILLY)

Kevin A. Ryan* Trustee
- -------------------------------------
(KEVIN A. RYAN)

Richard R. West* Trustee
- -------------------------------------
(RICHARD R. WEST)

/s/ Terry K. Glenn
*By _________________________________ June 20, 1997
(TERRY K. GLENN, ATTORNEY-IN-FACT)

C-7
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
11 --Consent of Deloitte & Touche LLP, independent auditors for the
Registrant.
17 --Financial Data Schedule.
</TABLE>

<PAGE>

<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> MERRILL LYNCH CBA MONEY FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-START> MAR-01-1996
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 2231075164
<INVESTMENTS-AT-VALUE> 2231040808
<RECEIVABLES> 7801085
<ASSETS-OTHER> 139727
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2238981620
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2321616
<TOTAL-LIABILITIES> 2321616
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2236694360
<SHARES-COMMON-STOCK> 2236694361
<SHARES-COMMON-PRIOR> 1987952404
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (34356)
<NET-ASSETS> 2236660004
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 113194767
<OTHER-INCOME> 0
<EXPENSES-NET> (14484522)
<NET-INVESTMENT-INCOME> 98710245
<REALIZED-GAINS-CURRENT> 46265
<APPREC-INCREASE-CURRENT> (81776)
<NET-CHANGE-FROM-OPS> 98674734
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (98710245)
<DISTRIBUTIONS-OF-GAINS> (46265)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5723246369
<NUMBER-OF-SHARES-REDEEMED> (5573053954)
<SHARES-REINVESTED> 98549542
<NET-CHANGE-IN-ASSETS> 248660180
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8657674
<INTEREST-EXPENSE> 831
<GROSS-EXPENSE> 15314888
<AVERAGE-NET-ASSETS> 2098012637
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

EXHIBIT 11

INDEPENDENT AUDITORS' CONSENT

CBA Money Fund:

We consent to the use in Post-Effective Amendment No. 15 to Registration
Statement No. 2-82766 of our report dated April 2, 1997 appearing in the
Statement of Additional Information, which is a part of such Registration
Statement, and to the reference to us under the caption "Financial Highlights"
appearing in the Prospectus, which also is a part of such Registration
Statement.

Deloitte & Touche LLP
Princeton, New Jersey

June 23, 1997