CBA MONEY FUND, 485BPOS, 1998-06-01

CBA MONEY FUND
485BPOS, 1998-06-01

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1998

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. [ ]
POST-EFFECTIVE AMENDMENT NO. 16 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 19 [X]
(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 OFFICES)

(609) 282-2800

(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

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:

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

JEFFREY S. ALEXANDER, 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)

<TABLE>
<S> <C>
[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.
</TABLE>

IF APPROPRIATE, CHECK THE FOLLOWING BOX:

<TABLE>
<S> <C>
[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
</TABLE>

TITLE OF SECURITIES BEING REGISTERED: Shares of Beneficial Interest, par
value $.10 per share

================================================================================
<PAGE> 2

CBA(R) MONEY FUND

REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- ------------- --------
<S> <C> <C>
PART A
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;
Additional 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.
<PAGE> 3

PROSPECTUS

JUNE 1, 1998

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 1, 1998 (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
Commission maintains a website (http://www.sec.gov) that contains the Statement
of Additional Information, material incorporated by reference and other
information about the Money Fund. 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> 4

FEE TABLE

<TABLE>
<S> <C> <C>
MONEY FUND ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1998:
Management Fees(a)................................................. 0.41%
Rule 12b-1 Fees(b)............................................... 0.13%
Other Expenses:
Transfer Agency Fees(c)................................ 0.17%
Other Fees............................................. 0.03%
-----
Total Other Expenses............................................. 0.20%
-----
Total Money Fund Operating Expenses.............................. 0.74%
=====
</TABLE>

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

(a) 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, 1998, the Manager waived management
fees totalling 0.04% after which the total Money Fund operating expenses
were 0.70%. See "Management of the Money Fund -- Management and Advisory
Arrangements" -- page 10.

(b) See "Purchase of Shares" -- page 11.

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 ratio of
0.74% and a 5% annual return throughout the periods.... $8 $24 $41 $92
</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.

2
<PAGE> 5

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fee Table...................................... 2
Financial Highlights........................... 3
Yield Information.............................. 4
Investment Objectives and Policies............. 5
Management of the Money Fund................... 8
Trustees................................... 8
Management and Advisory Arrangements....... 9
Transfer Agency Services................... 10
Purchase of Shares............................. 10
Redemption of Shares........................... 13
Portfolio Transactions......................... 14
Additional Information......................... 15
Dividends.................................. 15
Determination of Net Asset Value........... 15
Taxes...................................... 15
Organization of the Money Fund............. 17
Year 2000 Issues........................... 17
Shareholder Inquiries...................... 18
Reports to Shareholders.................... 18
</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, 1998 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 FOR THE FOR THE YEAR ENDED
FEBRUARY 28, YEAR ENDED FEBRUARY 28,
----------------------- FEBRUARY 29, ------------------------------------
1998 1997 1996 1995 1994 1993
---------- ---------- ------------ ---------- ---------- ----------
<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...................... .0497 .0475 .0524 .0396 .0260 .0304
Realized and unrealized gain (loss) on
investments -- net.......................... .0001 --** .0001 .0005 (.0004) .0017
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations................ .0498 .0475 .0525 .0401 .0256 .0321
---------- ---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income -- net...................... (.0497) (.0475) (.0524) (.0396) (.0260) (.0304)
Realized gain on investments -- net........... (.0001) --** (.0001) --** (.0004) (.0014)
---------- ---------- ---------- ---------- ---------- ----------
Total dividends and distributions............... (.0498) (.0475) (.0525) (.0396) (.0264) (.0318)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of year.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ==========
TOTAL INVESTMENT RETURN......................... 5.10% 4.87% 5.39% 4.04% 2.67% 3.23%
========== ========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement.................. .70% .69% .75% .77% .71% .71%
========== ========== ========== ========== ========== ==========
Expenses........................................ .74% .73% .79% .81% .75% .75%
========== ========== ========== ========== ========== ==========
Investment income and realized gain on
investments -- net............................ 4.98% 4.71% 5.22% 3.98% 2.62% 3.19%
========== ========== ========== ========== ========== ==========
SUPPLEMENTAL DATA:
Net assets, end of year (in thousands).......... $2,360,682 $2,236,660 $1,988,000 $1,406,315 $1,287,456 $1,242,686
========== ========== ========== ========== ========== ==========
</TABLE>

- ---------------
* Includes unrealized gain (loss).
** Amount is less than $.0001 per share.

3
<PAGE> 6

<TABLE>
<CAPTION>
FOR THE FOR THE YEAR ENDED
YEAR ENDED FEBRUARY 28,
FEBRUARY 29, --------------------------------
1992 1991 1990 1989
------------ ---------- -------- --------
<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.................................. .0511 .0736 .0846 .0720
Realized and unrealized gain (loss) on
investments -- net...................................... .0008 .0006 .0004 .0001
---------- ---------- -------- --------
Total from investment operations............................ .0519 .0742 .0850 .0721
---------- ---------- -------- --------
Less dividends and distributions:
Investment income -- net.................................. (.0511) (.0736) (.0846) (.0720)
Realized gain on investments -- net....................... (.0008)* (.0006)* (.0004)* (.0001)*
---------- ---------- -------- --------
Total dividends and distributions........................... (.0519) (.0742) (.0850) (.0721)
---------- ---------- -------- --------
Net asset value, end of year................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ======== ========
TOTAL INVESTMENT RETURN..................................... 5.32% 7.69% 8.86% 7.47%
========== ========== ======== ========
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement.............................. .69% .70% .68% .65%
========== ========== ======== ========
Expenses.................................................... .74% .75% .81% .89%
========== ========== ======== ========
Investment income and realized gain on investments -- net... 5.18%* 7.40%* 8.40%* 7.30%*
========== ========== ======== ========
SUPPLEMENTAL DATA:
Net assets, end of year (in thousands)...................... $1,211,833 $1,063,827 $864,835 $459,658
========== ========== ======== ========
</TABLE>

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

* Includes unrealized gain (loss).

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, 1998 APRIL 30, 1998
----------------- --------------
<S> <C> <C>
Annualized Yield:
Including gains and losses................................ 5.06% 4.97%
Excluding gains and losses................................ 4.99% 4.97%
Compounded Annualized Yield................................. 5.17% 5.10%
Average maturity of portfolio at end of period.............. 78 days 74 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

4
<PAGE> 7

information may not provide a basis for comparison with bank deposits or other
investments that 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.

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 some 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 obliga-

5
<PAGE> 8

tions 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, 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 counterparty 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.

6
<PAGE> 9

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.

The dollar weighted average maturity of the Money Fund's portfolio will be
90 days or less. During the year ended February 28, 1998, the average maturity
of its portfolio ranged from 57 days to 84 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 five NRSROs: Duff & Phelps Credit Rating Co., Fitch
IBCA, Inc., Thomson 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.

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<PAGE> 10

Rule 2a-7 under the Investment Company Act of 1940, as amended (the
"Investment Company Act") presently limits investments by the Money Fund in
securities issued by any one issuer (other than the U.S. Government, its
agencies or instrumentalities) ordinarily to not more than 5% of its total
assets, or, in the event that such securities are not First Tier Securities (as
defined in the Rule), not more than 1%. In addition, Rule 2a-7 requires that not
more than 5% of the Money Fund's total assets be invested in Second Tier
Securities (as defined in the Rule). The Rule requires the Money Fund to be
diversified (as defined in the Rule) other than with respect to government
securities and securities subject to guarantee issued by a non-controlled person
(as defined in the Rule).

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 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. 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.

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<PAGE> 11

The Trustees of the Money Fund are:

ARTHUR ZEIKEL* -- Chairman of the Manager and its affiliate, Merrill Lynch
Asset Management, L.P. ("MLAM"); Chairman and Director of Princeton
Services, Inc. ("Princeton Services"); and Executive Vice President of
Merrill Lynch & Co., Inc. ("ML & Co.").

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 -- Self-employed financial consultant; former President
and Chief Investment Officer of Verus Capital, Inc.; former Senior Vice
President of Arnhold and S. Bleichroeder, Inc.

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 Asset Management Group of
ML & Co. (which includes the Manager), acts as the investment adviser for more
than 100 registered investment companies and provides investment advisory
services to individual and institutional accounts. As of April, 1998, the Asset
Management Group had a total of approximately $490 billion in investment company
and other portfolio assets under management. This amount includes assets managed
for certain affiliates of the Manager.

The management agreement with the Manager (the "Management Agreement")
provides that, subject to the supervision 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, 1998, the total management fee paid, prior to any
reimbursement, by the Money Fund to the Manager aggregated $9,293,428 (based on
average net assets of approximately $2.3 billion) and the effective fee rate was
0.41%. During the same period, the Manager reimbursed $898,221 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%.

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<PAGE> 12

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 reimburses the Manager for its
costs in connection with such services. For the fiscal year ended February 28,
1998, the amount of such reimbursement was $158,610. For the fiscal year ended
February 28, 1998, the ratio of operating expenses, net of reimbursement, to
average net assets was 0.70%.

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 Money Fund'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. Additionally, a $0.20 monthly closed
account charge will be assessed on all accounts that close during the calendar
year. Application of this fee will commence the month following the month the
account is closed. At the end of the calendar year, no further fees will be due.
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 subsidiary of ML &
Co. For the fiscal year ended February 28, 1998, the total fee paid by the Money
Fund to the Transfer Agent pursuant to the Transfer Agency Agreement was
$3,805,534.

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

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<PAGE> 13

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
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.

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<PAGE> 14

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.

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

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<PAGE> 15

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.

For the fiscal year ended February 28, 1998, $2,744,110 was paid to Merrill
Lynch and Broadcort pursuant to the distribution arrangements (based on average
daily net assets subject to such Distribution Plan of approximately $2.3
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.

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<PAGE> 16

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."

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. An affiliated person of the Money
Fund may serve as its broker in OTC transactions conducted for the Money Fund 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

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<PAGE> 17

the fiscal year ended February 28, 1998, the Money Fund engaged in 33
transactions pursuant to such order aggregating approximately $559.5 million.

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 business 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

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<PAGE> 18

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.

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 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). Recent
legislation creates additional categories of capital gains taxable at different
rates. Generally not later than 60 days after the close of its taxable year, the
Fund will provide its shareholders with a written notice designating the amounts
of any ordinary income dividends or capital gain dividends, as well as the
amount of capital gain dividends in the different categories of capital gain
referred to above.

Dividends are taxable to shareholders even though they are reinvested in
additional shares of the Money Fund. 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

16
<PAGE> 19

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.

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.

YEAR 2000 ISSUES

Many computer systems were designed using only two digits to designate
years. These systems may not be able to distinguish the Year 2000 from the Year
1900 (commonly known as the "Year 2000 Problem"). Like other investment
companies and financial and business organizations, the Money Fund could be
adversely affected if the computer systems used by the Manager or other Money
Fund service providers do not properly address this problem prior to January 1,
2000. The Manager has established a dedicated group to

17
<PAGE> 20

analyze these issues and to implement any systems modifications necessary to
prepare for the Year 2000. Currently, the Manager does not anticipate that the
transition to the 21st century will have any material impact on its ability to
continue to service the Money Fund at current levels. In addition, the Manager
has sought assurances from the Money Fund's other service providers that they
are taking all necessary steps to ensure that their computer systems will
accurately reflect the Year 2000, and the Manager will continue to monitor the
situation. At this time, however, no assurance can be given that the Money
Fund's other service providers have anticipated every step necessary to avoid
any adverse effect on the Money Fund attributable to the Year 2000 Problem.

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.

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 BuilderSM Account is also marketed by Merrill Lynch under the
registered service mark "CBA." The Life Management ServiceSM 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> 21

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> 22

[Merrill Lynch Logo]

[CBA Logo]
PROSPECTUS
[CBA LOGO]

[CBA LOGO]

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 #10126-0698 June 1, 1998

<PAGE> 23

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.
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 the Prospectus,
free credit balances in the Securities Account of Service participants will be
periodically invested in shares of the Money Fund. This permits the subscriber
to earn a return on such funds pending further investment through other aspects
of the respective Service 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. 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.
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 Arrangements......... 7
Purchase and Redemption of Shares.............. 8
Portfolio Transactions......................... 10
Determination of Net Asset Value............... 11
Yield Information.............................. 12
Taxes.......................................... 13
Federal...................................... 13
</TABLE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information............................ 14
Description of Shares........................ 14
Custodian.................................... 15
Transfer Agent............................... 15
Independent Auditors......................... 15
Legal Counsel................................ 15
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 1, 1998 (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 1, 1998.

<PAGE> 24

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.

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

2
<PAGE> 25

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 five NRSROs: Duff & Phelps Credit Rating Co., Fitch
IBCA, Inc., Thomson 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 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

3
<PAGE> 26

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 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.

4
<PAGE> 27

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) -- Chairman of the
Manager and its affiliate MLAM (which terms, as used herein, include their
corporate predecessors) since 1997; President of the Manager and MLAM from 1977
to 1997; Chairman of Princeton Services, Inc. ("Princeton Services") since 1997
and Director thereof since 1993; President of Princeton Services from 1993 to
1997; Executive Vice President of Merrill Lynch & Co., Inc. ("ML & Co.") since
1990.

RONALD W. FORBES (57) -- Trustee(2) -- 1400 Washington Avenue, Albany, New
York 12222. Professor of Finance, School of Business, State University of New
York at Albany since 1989; Consultant, Urban Institute, Washington, D.C. since
1995.

CYNTHIA A. MONTGOMERY (45) -- 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. 1995.

CHARLES C. REILLY (66) -- 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 1989 to
1990; Partner, Small Cities Cable Television from 1986 to 1997.

KEVIN A. RYAN (65) -- 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 (60) -- 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 printers), Vornado
Realty Trust, Inc. (real estate holding company) and Alexander's Inc. (real
estate company).

TERRY K. GLENN (57) -- Executive Vice President(1)(2) -- Executive Vice
President of the Manager and MLAM since 1983; President of Merrill Lynch Funds
Distributor, Inc. ("MLFD" or the "Distributor") since 1986 and Director thereof
since 1991; Executive Vice President and Director of Princeton Services since
1993; President of Princeton Administrators, L.P. since 1988.

JOSEPH T. MONAGLE, JR. (49) -- Senior Vice President(1)(2) -- Senior Vice
President of the Manager and MLAM since 1990; Department Head of the Global
Fixed Income Division of the Manager and MLAM

5
<PAGE> 28

since 1997; Vice President of MLAM from 1978 to 1990; Senior Vice President of
Princeton Services since 1993.

KEVIN J. MCKENNA (41) -- Senior Vice President(1)(2) -- Vice President of
MLAM since 1985.

DONALD C. BURKE (37) -- Vice President(1)(2) -- First Vice President of
MLAM since 1997; Vice President of MLAM from 1990 to 1997; and Director of
Taxation of MLAM since 1990.

MARIE DWYER (33) -- Vice President(1)(2) -- Vice President and Portfolio
Manager of MLAM since 1991; employed by MLAM since 1985.

GERALD M. RICHARD (49) -- 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 the Distributor
since 1981; Treasurer since 1984.

ROBERT HARRIS (46) -- 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 April 30, 1998, 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 Trustee who is not affiliated with the Manager (each a "non-affiliated
Trustee") a fee of $4,500 per year plus $400 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 $1,400 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, 1998 fees and expenses paid to the non-affiliated
Trustees aggregated $36,134.

6
<PAGE> 29

The following table sets forth for the fiscal year ended February 28, 1998
compensation paid by the Money Fund to the non-affiliated Trustees and for the
calendar year ended December 31, 1997 the aggregate compensation paid by all
registered investment companies advised by MLAM, FAM or their affiliates
("MLAM/FAM Advised Funds") to the non-affiliated Trustees.

<TABLE>
<CAPTION>
TOTAL COMPENSATION
PENSION OR FROM FUND AND
AGGREGATE RETIREMENT BENEFITS MLAM/FAM ADVISED
COMPENSATION ACCRUED AS PART FUNDS PAID TO
NAME OF TRUSTEE FROM FUND OF FUND EXPENSE TRUSTEES(1)
--------------- ------------ ------------------- ------------------
<S> <C> <C> <C>
Ronald W. Forbes(1).................. $6,900 None $153,500
Cynthia A. Montgomery(1)............. $6,900 None $153,500
Charles C. Reilly(1)................. $7,900 None $313,000
Kevin A. Ryan(1)..................... $6,900 None $153,500
Richard R. West(1)................... $6,900 None $299,000
</TABLE>

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

(1) The Trustees serve on the Boards of other MLAM/FAM Advised Funds as follows:
Mr. Forbes (29 registered investment companies consisting of 42 portfolios);
Ms. Montgomery (29 registered investment companies consisting of 42
portfolios); Mr. Reilly (47 registered investment companies consisting of 60
portfolios); Mr. Ryan (29 registered investment companies consisting of 42
portfolios); and Mr. West (48 registered investment companies consisting of
70 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 supervision 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.

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<PAGE> 30

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, 1998, February 28,
1997 and February 29, 1996, the total management fee payable by the Money Fund
to the Manager was $9,293,428, $8,657,674 and $7,171,703, 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, 1998, February 28, 1997
and February 29, 1996, the Manager paid $898,221, $830,366 and $671,436,
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.

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

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<PAGE> 31

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, 1998, February 28, 1997 and
February 29, 1996, $2,744,110, $2,519,882 and $2,066,718, 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, 1998, February 28,
1997 and February 29, 1996 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 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

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<PAGE> 32

except (1) for any period (A) during which the New York Stock Exchange ("NYSE")
is closed other than customary weekend and holiday closings or (B) during which
trading on the NYSE 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.

The value of Money Fund shares at the time of redemption may be more or
less than the shareholder's cost, depending on the market value of the
securities held by the Money Fund at any such time.

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, an affiliated person 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.

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

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<PAGE> 33

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. For the fiscal years ended February
28, 1998, February 28, 1997 and February 29, 1996, the Money Fund engaged in 33,
33 and 26 such transactions, respectively, aggregating approximately $559.5
million, $600.6 million and $454.1 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.

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 NYSE 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 NYSE and New York banks are
closed. Both the NYSE and New York banks are closed for New Year's Day, Martin
Luther King, Jr. 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

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<PAGE> 34

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.

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.

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<PAGE> 35

TAXES

FEDERAL

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.

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 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). Recent
legislation creates additional categories of capital gains taxable at different
rates. Generally not later than 60 days after the close of its taxable year, the
Fund will provide its shareholders with a written notice designating the amounts
of any ordinary income dividends or capital gain dividends, as well as the
amount of capital gain dividends in the different categories of capital gain
referred to above.

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.

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<PAGE> 36

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.

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

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<PAGE> 37

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.

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.

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<PAGE> 38

REPORTS TO SHAREHOLDERS

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> 39

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 the degree of safety is
either overwhelming or very strong; and A-2 indicates that capacity for timely
repayment is strong.

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 capacity for repayment. Prime-2 issuers
have a strong capacity for repayment, but to a lesser degree than Prime-1.

Fitch IBCA, Inc. ("Fitch") employs the rating F1+ to indicate issues
regarded as having the strongest degree of assurance for timely payment. The
rating F1 reflects an assurance of timely payment only slightly less in degree
than issues rated F1+, while the rating F2 indicates a satisfactory degree of
assurance for timely payment, although the margin of safety is not as great as
indicated by the F1+ and F1 categories.

Duff & Phelps Credit Rating Co. ("Duff & Phelps") employs the designation
of Duff 1 with respect to top grade commercial paper and bank money instruments.
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, TBW-2,
TBW-3 and TBW-4 as ratings for commercial paper, other senior short-term
obligations and deposit obligations of the entities to which the rating has been
assigned. TBW-1 is the highest category and indicates 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.

Bonds rated Aaa by Moody's are judged to be of the best quality. Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. Bonds 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 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

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<PAGE> 40

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 Fitch IBCA 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> 41

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, 1998, 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, 1998 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, 1998, 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.

/s/ Deloitte & Touche LLP

Princeton, New Jersey

April 2, 1998

19
<PAGE> 42
<TABLE>
<CAPTION>

CBA Money Fund
Schedule of Investments as of February 28, 1998 (in Thousands)

Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>

Bank Notes -- 15.6%

American Express $19,000 5.585%+ 2/12/99 $19,000
Centurion Bank 7,300 5.575+ 3/19/99 7,300
Bank of America N.T. 10,000 5.93 6/24/98 10,004
& S.A. 13,000 5.64+ 6/30/98 12,996
The Bank of New York 14,000 5.94 6/30/98 14,006
Comerica Bank, 13,000 5.535+ 2/02/99 12,995
Detroit 8,500 5.525+ 2/09/99 8,496
FCC National Bank 18,000 5.55+ 2/23/99 17,988
First National Bank 10,000 5.80 7/30/98 10,000
of Chicago 10,000 5.88 8/26/98 10,005
7,000 5.55+ 2/23/99 6,995
First Tennessee 7,000 5.75 1/22/99 7,000
Bank N.A., Memphis 10,000 5.505+ 2/08/99 9,993
Huntington National 5,000 5.515+ 1/20/99 4,998
Bank 25,000 5.515+ 1/22/99 24,989
KeyBank N.A. 25,000 5.588+ 4/03/98 25,002
9,000 5.76+ 5/06/98 8,999
16,000 5.74+ 8/20/98 15,994
15,000 5.74+ 8/28/98 14,995
LaSalle National Bank, 15,000 5.55 2/08/99 14,974
Chicago 7,000 5.55 2/22/99 6,988
Northern Trust Co. 5,000 5.95 6/24/98 5,002
PNC Bank N.A. 41,100 5.60+ 10/01/98 41,084
45,000 5.57+ 1/29/99 44,971
SunTrust Bank, 10,000 5.80 7/24/98 10,000
Atlanta
U.S. National Bank 3,000 5.665+ 4/14/98 3,000
of Oregon ------------
Total Bank Notes (Cost -- $367,774) 367,774
============

Certificates of Deposit -- 2.8%

Chase Manhattan 25,000 6.00 6/16/98 25,014
Bank 10,000 5.87 7/21/98 10,003
Morgan Guaranty 10,000 5.87 8/06/98 10,004
Trust Company of NY
Nationsbank N.A. 8,000 5.55 2/09/99 7,986
14,000 5.55 2/10/99 13,976
------------
Total Certificates of Deposit (Cost -- $66,989) 66,983
============

Certificates of Deposit -- European -- 1.3%

Barclays Bank PLC, 20,000 6.08 6/15/98 20,015
London
Westdeutsche 10,000 5.83 8/03/98 10,002
Landesbank
Girozentrale, London ------------
Total Certificates of Deposit -- European
(Cost -- $30,001) 30,017
============

Certificates of Deposit -- Yankee -- 11.8%

ABN-AMRO Bank 10,000 5.93 6/19/98 10,004
N.V., Chicago 10,000 5.77 7/28/98 10,000
10,000 5.85 8/07/98 10,003
Barclays Bank PLC, 10,000 5.94 6/25/98 10,004
NY 10,000 5.86 8/18/98 10,004
10,000 5.715 10/09/98 9,998
10,000 5.56 2/25/99 9,985
7,000 5.645 3/02/99 6,995
Bayerische 10,000 5.835 9/29/98 10,006
Hypotheken-und 24,000 5.65 2/26/99 23,984
Wechsel-Bank, NY
Bayerische Landesbank 10,000 5.85 7/10/98 10,002
Girozentrale, NY
Bayerische 10,000 5.70 10/06/98 9,997
Vereinsbank AG, NY 16,000 5.60 2/02/99 15,980
Canadian Imperial Bank 15,000 5.55 2/10/99 14,975
of Commerce, NY
Deutsche Bank AG, NY 10,000 5.62 2/26/99 9,990
Landesbank 15,000 5.94 6/19/98 15,006
Hessen Thuringen
Girozentrale, NY
Norddeutsche 10,000 5.525+ 2/02/99 9,996
Landesbank
Girozentrale AG, NY
Royal Bank of 10,000 6.05 6/10/98 10,006
Canada, NY 10,000 5.79 8/20/98 10,001
Swiss Bank Corp., NY 25,000 5.95 7/02/98 25,012
10,000 5.90 8/28/98 10,006
Westdeutsche 10,000 5.60+ 3/06/98 10,000
Landesbank 17,000 5.94 6/29/98 17,008
Girozentrale, NY ------------
Total Certificates of Deposit -- Yankee
(Cost -- $278,922) 278,962
============

Commercial Paper -- 39.4%

Aesop Funding Corp. 10,000 5.49 4/07/98 9,941
Allomon Funding Corp. 10,095 5.53 3/06/98 10,084
10,147 5.75 3/17/98 10,119
15,217 5.77 3/20/98 15,168
5,070 5.48 5/18/98 5,008
American Honda 30,000 5.45 4/16/98 29,779
Finance Corp. 5,000 5.47 4/16/98 4,963
15,000 5.56 5/28/98 14,799
Apreco, Inc. 15,000 5.50 3/05/98 14,986
25,000 5.48 5/12/98 24,715
BTR Dunlop 50,000 5.56 4/09/98 49,685
Finance, Inc.
CIT Group Holdings, 15,000 5.55 4/24/98 14,871
Inc. (The)
</TABLE>

20
<PAGE> 43
<TABLE>
<S> <C> <C> <C> <C>
Chrysler Financial 15,000 5.49 3/03/98 14,991
Corporation
Countrywide Home 25,000 5.73 3/06/98 24,973
Loans, Inc. 20,000 5.54 5/27/98 19,726
Diageo PLC 20,000 5.48 3/27/98 19,915
Finova Capital Corp. 4,000 5.55 3/24/98 3,985
15,000 5.49 4/08/98 14,908
25,000 5.49 4/09/98 24,843
10,000 5.61 4/29/98 9,906
10,000 5.61 4/30/98 9,904
Ford Credit 25,000 5.53 4/07/98 24,850
Europe PLC
Ford Motor Credit 10,000 5.52 4/07/98 9,940
Company
France Telecom 15,000 5.74 3/26/98 14,938
General Electric 25,000 5.50 3/04/98 24,980
Capital Corp.
General Motors 35,000 5.49 3/19/98 34,893
Acceptance Corp. 35,000 5.57 3/20/98 34,888
20,000 5.51 4/03/98 19,892
Generale Bank, Inc. 20,000 5.55 4/06/98 19,883
Goldman Sachs 25,000 5.53 5/05/98 24,742
Group, L.P. 10,000 5.62 6/30/98 9,811
Lehman Brothers 20,000 5.80 3/27/98 19,914
Holdings, Inc. 23,500 5.47 5/06/98 23,254
25,000 5.50 5/08/98 24,731
20,000 5.50 5/12/98 19,772
15,000 5.50 5/19/98 14,813
Lexington Parker 15,000 5.73 3/05/98 14,986
Capital Company, LLC 20,000 5.73 3/06/98 19,978
20,000 5.74 3/06/98 19,978
10,000 5.48 5/20/98 9,874
9,000 5.49 5/26/98 8,878
10,000 5.49 5/27/98 9,863
Mont Blanc 15,000 5.49 4/24/98 14,871
Capital Corp.
Morgan Stanley, Dean 25,000 5.73 3/13/98 24,946
Witter, Discover & Co. 15,000 5.75 3/17/98 14,959
Old Line Funding Corp. 10,000 5.51 4/02/98 9,948
Preferred Receivables 18,000 5.48 3/11/98 17,967
Funding Corp.
RTZ America, Inc. 13,000 5.55 3/25/98 12,948
Republic Industries 17,000 5.51 4/13/98 16,883
Funding Corp.
Rio Tinto Finance PLC 5,000 5.75 3/03/98 4,997
Salomon, Smith 25,000 5.47 5/07/98 24,735
Barney Holdings, Inc.
Scripps (E.W.) 25,000 5.73 3/10/98 24,958
Company (The)
Twin Towers Inc. 3,752 5.75 3/02/98 3,750
Windmill 6,481 5.48 5/22/98 6,397
Funding Corp. ------------
Total Commercial Paper (Cost -- $929,487) . . . . . . . . . . . . 929,486
============

Corporate Notes -- 11.4%
Abbey National 10,000 5.93 3/25/98 10,003
Treasury Services PLC 25,000 5.65+ 4/15/98 24,998
15,000 5.74+ 6/09/98 14,997
Associates Corp. of 5,700 6.25 3/15/99 5,730
North America
Bank of Scotland 4,000 5.95 6/18/98 4,001
Treasury Services PLC
CIT Group Holdings, 4,500 5.58+ 8/17/98 4,498
Inc. (The) 11,000 5.59+ 9/30/98 10,994
10,000 5.64+ 1/12/99 9,996
Chase Manhattan Auto 4,000 5.549 3/12/99 3,999
Owner Trust 1998-A
Credit Suisse First 8,000 5.75+ 4/14/98 8,000
Boston Inc.
First Bank System Inc. 14,000 5.757+ 10/21/98 14,016
Ford Credit Auto 10,000 5.545 2/16/99 9,997
Owner Trust 1998-A
General Motors 7,000 5.702+ 2/27/01 6,986
Acceptance Corp.
Goldman Sachs 20,000 5.625+ 3/26/99 19,998
Group, L.P.
IBM Credit Corp. 10,000 5.93 3/18/98 10,002
10,000 5.868 8/13/98 10,005
LABS Trust (Series 16,935 5.625+ 12/28/98 16,935
1996-4), Senior Notes
LABS Trust (Series 11,047 5.625+ 10/21/98 11,047
1997-6), Senior Notes
LINCS (Series 1997-4) 15,000 5.615+ 9/18/98 15,000
LINCS (Series 1997-5) 14,500 5.615+ 11/18/98 14,500
LINCS (Series 1998-2) 10,000 5.615+ 2/12/99 10,000
Morgan (J.P.) & 20,000 5.58+ 2/24/99 19,992
Company, Inc.
Morgan Stanley, Dean 4,300 5.544+ 1/15/99 4,297
Witter, Discover & Co.
Premier Auto Trust 2,189 5.649 6/08/98 2,189
1997-3, Class A-1
Premier Auto Trust 6,900 5.545 11/06/98 6,900
1998-1, Class A-1 ------------
Total Corporate Notes (Cost -- $269,095) . . . . . . . . . . . . . 269,080
============
</TABLE>

21
<PAGE> 44
<TABLE>
<CAPTION>
Master Notes & Funding Agreements -- 2.7%
<S> <C> <C> <C> <C>
Goldman Sachs 40,000 5.625+ 4/28/98 40,000
Group, L.P.
Jackson National Life 25,000 5.655+ 5/01/98 25,000
Insurance Co. ------------
Total Master Notes & Funding Agreements
(Cost -- $65,000) 65,000
============

US Government & Agency Obligations --
Non-Discount Notes -- 15.3%

Federal Home Loan 21,000 5.749+ 10/20/98 20,996
Banks 3,900 6.355 6/11/99 3,907
5,000 5.99 8/11/99 5,004
5,000 5.67 1/20/00 4,981
7,000 5.855 1/20/00 6,988
5,000 5.77 1/27/00 4,986
5,000 5.75 3/16/00 4,984
5,000 5.865 3/17/00 4,991

Federal Home Loan 20,000 5.57+ 4/20/98 19,998
Mortgage Corp. 4,000 6.36 5/20/99 4,006
Federal National 16,000 5.57+ 3/26/98 15,999
Mortgage Association 21,000 5.479+ 3/27/98 20,999
25,000 5.519+ 4/24/98 24,999
10,000 5.68 7/31/98 10,001
20,000 5.744+ 10/20/98 19,994
25,000 5.669+ 1/21/99 24,989
5,000 5.40 2/02/99 4,990
10,000 5.38 2/12/99 9,977
25,000 5.603+ 3/03/99 24,989
Federal National 17,000 5.67+ 3/03/99 16,994
Mortgage Association 4,000 6.375 5/21/99 4,006
2,800 5.88 8/10/99 2,800
Student Loan 13,000 5.714+ 10/06/98 12,995
Marketing Association 10,000 5.714+ 11/25/98 9,998
20,000 5.679+ 1/12/00 19,993
3,000 5.81 1/27/00 2,992
15,000 5.704+ 2/02/00 14,993
13,600 5.724+ 2/04/00 13,593
US Treasury Notes 10,000 5.25 7/31/98 9,994
15,000 6.375 1/15/99 15,102
------------
Total US Government & Agency Obligations --
Non-Discount Notes (Cost -- $361,269) 361,238
============

Repurchase Agreements** -- 2.1%

Face Amount Issue
<S> <C> <C>
$49,777 Fuji Securities, Inc., purchased on
2/27/1998 to yield 5.68% to 3/02/1998 49,777
------------
Total Repurchase Agreements
(Cost -- $49,777) 49,777
============

Total Investments (Cost -- $2,418,314) -- 102.4% 2,418,317
Liabilities in Excess of Other Assets -- (2.4%) (57,635)
------------
Net Assets -- 100.0% $2,360,682
============

* 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, 1998.
** Repurchase Agreements are fully collateralized by US Government Obligations.
+ Variable Rate Notes.

See Notes to Financial Statements.
</TABLE>

22
<PAGE> 45

CBA Money Fund
Statement of Assets and Liabilites as of February 28, 1998

Assets:
Investments, at value (identified cost -- $2,418,313,756*) (Note 1a) . . . . . . . . . . $2,418,317,259
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,808
Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,047,439
Prepaid registration fees and other assets (Note 1e) . . . . . . . . . . . . . . . . . . 1,153,288
---------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,436,543,794
---------------
Liabilities:
Payables:
Securities purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $73,767,372
Investment adviser (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675,740
Distributor (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 649,177 75,092,289
---------------
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 769,413
---------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,861,702
---------------
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,360,682,092
===============

Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares authorized . . $236,067,859
Paid-in capital in excess of par . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,124,610,730
Unrealized appreciation on investments -- net . . . . . . . . . . . . . . . . . . . . . 3,503
---------------
Net Assets -- Equivalent to $1.00 per share based on 2,360,678,589 shares of beneficial
interest outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,360,682,092
===============
</TABLE>
* The aggregate cost of investments at February 28, 1998 for Federal income tax
purposes was $2,418,313,756. As of February 28, 1998, net unrealized
appreciation for Federal income tax purposes amounted to $3,503, of which
$263,092 related to appreciated securities and $259,589 related to
depreciated securities.

See Notes to Financial Statements.

23
<PAGE> 46

CBA Money Fund
Statement of Operations for the Year Ended February 28, 1998
<S> <C> <C>

Investment Income (Note 1d):
Interest and amortization of premium and discount earned $127,482,737

Expenses:
Investment advisory fees (Note 2) $9,293,428
Transfer agent fees (Note 2) 3,805,534
Distribution fees (Note 2) 2,744,110
Registration fees (Note 1e) 389,490
Accounting services (Note 2) 158,610
Custodian fees 115,122
Printing and shareholder reports 89,587
Professional fees 63,258
Trustees' fees and expenses 36,134
Other 26,698
------------
Total expenses before reimbursement 16,721,971
Reimbursement of expenses (Note 2) (898,221)
------------
Total expenses after reimbursement 15,823,750
------------

Investment Income -- Net 111,658,987
Realized Gain on Investments -- Net (Note 1d) 227,994
Change in Unrealized Appreciation/Depreciation on Investments -- Net 37,859
------------
Net Increase in Net Assets Resulting from Operations $111,924,840
============
</TABLE>
See Notes to Financial Statements.

CBA Money Fund For the Year Ended
Statements of Changes in Net Assets February 28,
1998 1997

Increase (Decrease) in Net Assets:
<S> <C> <C>
Operations:
Investment income -- net $111,658,987 $98,710,245
Realized gain on investments -- net 227,994 46,265
Change in unrealized appreciation/depreciation on investments -- net 37,859 (81,776)
--------------- ---------------
Net increase in net assets resulting from operations 111,924,840 98,674,734
--------------- ---------------

Dividends & Distributions to Shareholders (Note 1f):
Investment income -- net (111,658,987) (98,710,245)
Realized gain on investments -- net (227,994) (46,265)
--------------- ---------------
Net decrease in net assets resulting from dividends and distributions to
shareholders (111,886,981) (98,756,510)
--------------- ---------------

Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 6,033,580,870 5,723,246,368
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions (Note 1f) 111,675,227 98,549,542
--------------- ---------------
6,145,256,097 5,821,795,910
Cost of shares redeemed (6,021,271,868) (5,573,053,954)
--------------- ---------------
Net increase in net assets derived from beneficial interest transactions 123,984,229 248,741,956
--------------- ---------------

Net Assets:
Total increase in net assets 124,022,088 248,660,180
Beginning of year 2,236,660,004 1,987,999,824
--------------- ---------------
End of year $2,360,682,092 $2,236,660,004
=============== ===============

See Notes to Financial Statements.

</TABLE>

24
<PAGE> 47

CBA Money Fund
Financial Highlights

The following per share data and ratios have been derived For the For the For the
from information provided in the financial statements. Year Ended Year Ended Year Ended
February 28, February 29, February 28,
1998 1997 1996 1995 1994
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 .0497 .0475 .0524 .0396 .0260
Realized and unrealized gain (loss) on investments
- -- net .0001 --* .0001 .0005 (.0004)
---------- ---------- ---------- ---------- ----------
Total from investment operations .0498 .0475 .0525 .0401 .0256
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income -- net (.0497) (.0475) (.0524) (.0396) (.0260)
Realized gain on investments -- net (.0001) --* (.0001) --* (.0004)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.0498) (.0475) (.0525) (.0396) (.0264)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ==========
Total Investment Return 5.10% 4.87% 5.39% 4.04% 2.67%
========== ========== ========== ========== ==========

Ratios to Average Net Assets:
Expenses, net of reimbursement .70% .69% .75% .77% .71%
========== ========== ========== ========== ==========
Expenses .74% .73% .79% .81% .75%
========== ========== ========== ========== ==========
Investment income and realized gain on
investments -- net 4.98% 4.71% 5.22% 3.98% 2.62%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of year (in thousands) $2,360,682 $2,236,660 $1,988,000 $1,406,315 $1,287,456
========== ========== ========== ========== ==========

* Amount is less than $.0001 per share.

See Notes to Financial Statements.

</TABLE>

25
<PAGE> 48

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) Repurchase agreements -- The Fund invests in US Government
securities pursuant to repurchase agreements with a member bank of
the Federal Reserve System or a primary dealer in US Government
securities. Under such agreements, the bank or primary dealer agrees
to repurchase the security at a mutually agreed upon time and price.
The Fund takes possession of the underlying securities, marks to
market such securities and, if necessary, receives additional
securities daily to ensure that the contract is fully
collateralized.

(c) 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.

(d) 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.

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

(f) 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 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

26
<PAGE> 49

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, 1998, FAM earned
$9,293,428, of which $898,221 was voluntarily waived.

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.

27
<PAGE> 50

[Merrill Lynch Logo]

[CBA Logo]

STATEMENT OF

ADDITIONAL INFORMATION

[CBA LOGO]

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 #10129-0698 June 1, 1998

<PAGE> 51

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, 1998.

Financial Statements Contained in Part B:

Schedule of Investments as of February 28, 1998.

Statement of Assets and Liabilities as of February 28, 1998.

Statement of Operations for the year ended February 28, 1998.

Statements of Changes in Net Assets for each of the years in the
two-year period ended February 28, 1998.

Financial Highlights for each of the years in the five-year period
ended February 28, 1998.

(b) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
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 Broadcort Capital 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 for the fiscal year ended February
28, 1998.
</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> 52

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 MARCH 31, 1998
- -------------- --------------
<S> <C>
Shares of beneficial interest, par value $.10 per share..... 333,809
</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 ("Merrill Lynch").

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> 53

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 registered 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 Puerto Rico Tax Exempt 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 registered investment companies: Apex Municipal Fund, Inc., Corporate
High Yield Fund, Inc., Corporate High Yield Fund II, Inc., Corporate High Yield
Fund III, Inc., Debt Strategies Fund, Inc., Debt Strategies Fund II, Inc.,
Income Opportunities Fund 1999, Inc., Income Opportunities Fund 2000, Inc.,
Merrill Lynch Municipal Strategy Fund, Inc., MuniAssets Fund, Inc., MuniEnhanced
Fund, Inc., MuniHoldings California Insured Fund, Inc., MuniHoldings California
Insured Fund II, Inc., MuniHoldings Florida Insured Fund, MuniHoldings Florida
Insured Fund II, MuniHoldings Fund, Inc., MuniHoldings Fund II, Inc.,
MuniHoldings New Jersey Insured Fund, Inc., MuniHoldings New York Fund, Inc.,
MuniHoldings New York Insured Fund, Inc., MuniInsured Fund, Inc., MuniVest Fund,
Inc., MuniVest Fund II, Inc., MuniVest Florida Fund, 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., 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 registered 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 Convertible 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 Growth 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 Growth Fund, Merrill Lynch Healthcare
Fund, Inc., Merrill Lynch Intermediate Government Bond Fund, Merrill Lynch
International Equity Fund, Merrill Lynch Latin America Fund, Inc.,

C-3
<PAGE> 54

Merrill Lynch Middle East/Africa Fund, Inc., Merrill Lynch Municipal Series
Trust, Merrill Lynch Pacific Fund, Inc., Merrill Lynch Real Estate 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 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., Merrill Lynch Variable
Series Fund, Inc., and Hotchkis and Wiley Funds (advised by Hotchkis and Wiley,
a division of MLAM); and for the following closed-end registered investment
companies: Merrill Lynch High Income Municipal Bond Fund, Inc. and Merrill Lynch
Senior Floating Rate Fund, Inc. MLAM also acts as sub-adviser to Merrill Lynch
World Strategy Portfolio and Merrill Lynch Basic Value Equity Portfolio, two
investment portfolios of EQ Advisors Trust.

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 and Merrill Lynch Institutional Intermediate Bond Fund is
One Financial Center, 23rd Floor, Boston, Massachusetts 02111-2665. 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" or the
"Distributor") is P.O. Box 9081, Princeton, New Jersey 08543-9081. The address
of Merrill Lynch and Merrill Lynch & Co., Inc. ("ML & Co.") is North Tower,
World Financial Center, 250 Vesey Street, New York, New York 10281-1201. 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, 1996 for his, her or its own account or in the capacity of director,
officer, employee, partner or trustee. In addition, Mr. Zeikel is President,
director and trustee, Mr. Glenn is Executive Vice President and Mr. Richard is
Treasurer of all or substantially all of the investment companies listed in the
first two paragraphs of this Item 28. 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 officers or director/trustees of one
or more of such companies.

<TABLE>
<CAPTION>
POSITION(S) WITH OTHER SUBSTANTIAL BUSINESS,
NAME MANGER PROFESSION, VOCATION OR EMPLOYMENT
---- ---------------- ----------------------------------
<S> <C> <C>
ML & Co Limited Partner Financial Services Holding Company; Limited
Partner of MLAM
Princeton Services General Partner General Partner of MLAM
Arthur Zeikel Chairman (since 1997); Chairman of MLAM; President of the Manager
President (1977-1997) and MLAM from 1977 to 1997; Chairman and
Director of Princeton Services; President
of Princeton Services from 1993 to 1997;
Executive Vice President of ML & Co.
Jeffrey M. Peek President (since 1997) President of MLAM since 1997; President and
Director of Princeton Services since 1997;
Executive Vice President of ML & Co.;
Managing Director and Co-Head of the
Investment Banking Division of Merrill
Lynch in 1997; Senior Vice President and
Director of the Global Securities and
Economic Division of Merrill Lynch from
1995 to 1997.
</TABLE>

C-4
<PAGE> 55

<TABLE>
<CAPTION>
POSITION(S) WITH OTHER SUBSTANTIAL BUSINESS,
NAME MANGER PROFESSION, VOCATION OR EMPLOYMENT
---- ---------------- ----------------------------------
<S> <C> <C>
Terry K. Glenn Executive Vice President Executive Vice President of MLAM; Executive
Vice President and Director of Princeton
Services; President and Director of MLFD;
Director of MLFDS; President of Princeton
Administrators, L.P.
Linda L. Federici Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
Vincent R. Giordano Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
Elizabeth A. 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
President of Princeton Services
Michael J. Hennewinkel 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 and
General Counsel and Secretary of MLAM; Senior Vice President,
Secretary General Counsel, Director and Secretary of
Princeton Services
Ronald M. Kloss Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
Debra W. Landsman- Senior Vice President Senior Vice President of MLAM; Vice
Yaros President of MLFD; Senior Vice President
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; Director
of MLFD
Gerald M. Richard Senior Vice President Senior Vice President and Treasurer of MLAM;
and Treasurer Senior Vice President and Treasurer of
Princeton Services; Vice President and
Treasurer of MLFD
Gregory D. Upah Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
Ronald L. Welburn Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
</TABLE>

C-5
<PAGE> 56

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 North Tower, World Financial Center, 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. Schieren................... General Counsel None
Theresa Lang......................... Treasurer None
Andrea L. Dulberg.................... Secretary None
</TABLE>

(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 North Tower, World Financial Center, 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 M. Joyce....................... Chairman and Director None
Thomas Conigliaro..................... Executive Vice President and Director None
Robert F. McGee....................... Senior Vice President and 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
Daisy M. Rosado....................... Assistant 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 1940 Act and the Rules thereunder will be maintained at the
offices of the Registrant, 800 Scudders Mill Road,

C-6
<PAGE> 57

Plainsboro, New Jersey 08536, and its transfer agent, 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-7
<PAGE> 58

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 AMENDMENT TO THE REGISTRATION
STATEMENT PURSUANT TO RULE 485(b) UNDER THE SECURITIES ACT OF 1933 AND HAS DULY
CAUSED THIS 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 1ST DAY OF JUNE, 1998.

CBA MONEY FUND
(REGISTRANT)

By: /s/ TERRY K. GLENN
------------------------------------
(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.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ ARTHUR ZEIKEL* President (Principal
- -------------------------------------------------------- Executive Officer) and
(ARTHUR ZEIKEL) Trustee

/s/ GERALD M. RICHARD* Treasurer (Principal
- -------------------------------------------------------- Financial and Accounting
(GERALD M. RICHARD) Officer)

/s/ RONALD W. FORBES* Trustee
- --------------------------------------------------------
(RONALD W. FORBES)

/s/ CYNTHIA A. MONTGOMERY* Trustee
- --------------------------------------------------------
(CYNTHIA A. MONTGOMERY)

/s/ CHARLES C. REILLY* Trustee
- --------------------------------------------------------
(CHARLES C. REILLY)

/s/ KEVIN A. RYAN* Trustee
- --------------------------------------------------------
(KEVIN A. RYAN)

/s/ RICHARD R. WEST* Trustee
- --------------------------------------------------------
(RICHARD R. WEST)

*By: /s/ TERRY K. GLENN June 1, 1998
---------------------------------------------------
(TERRY K. GLENN, ATTORNEY-IN-FACT)
</TABLE>

C-8
<PAGE> 59

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C> <C> <C>
11 -- Consent of Deloitte & Touche LLP, independent auditors for
the Registrant
17 -- Financial Data Schedule for the fiscal year ended February
28, 1998
</TABLE>

<PAGE> 1

INDEPENDENT AUDITORS' CONSENT

CBA Money Fund:

We consent to the use in Post-Effective Amendment No. 16 to Registration
Statement No. 2-82766 of our report dated April 2, 1998 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.

/s/ DELOITTE & TOUCHE LLP

Princeton, New Jersey

June 1, 1998

<ARTICLE> 6
<CIK> 0000717288
<NAME> CBA MONEY FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1997
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 2418313756
<INVESTMENTS-AT-VALUE> 2418317259
<RECEIVABLES> 17047439
<ASSETS-OTHER> 1179096
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2436543794
<PAYABLE-FOR-SECURITIES> 73767372
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2094330
<TOTAL-LIABILITIES> 75861702
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2360678589
<SHARES-COMMON-STOCK> 2360678589
<SHARES-COMMON-PRIOR> 2236694361
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3503
<NET-ASSETS> 2360682092
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 127482737
<OTHER-INCOME> 0
<EXPENSES-NET> (15823750)
<NET-INVESTMENT-INCOME> 111658987
<REALIZED-GAINS-CURRENT> 227994
<APPREC-INCREASE-CURRENT> 37859
<NET-CHANGE-FROM-OPS> 111924840
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (111658987)
<DISTRIBUTIONS-OF-GAINS> (227994)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6033580870
<NUMBER-OF-SHARES-REDEEMED> (6021271868)
<SHARES-REINVESTED> 111675227
<NET-CHANGE-IN-ASSETS> 124022088
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9293428
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16721971
<AVERAGE-NET-ASSETS> 2251723007
<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> .74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>