VALUE LINE AGGRESSIVE INCOME TRUST, 485BPOS, 1997-05-19

VALUE LINE AGGRESSIVE INCOME TRUST
485BPOS, 1997-05-19

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 1997

FILE NO. 33-01575
FILE NO. 811-4471
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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

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FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

Pre-Effective Amendment No. / /

Post-Effective Amendment No. 12 /X/

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/

Amendment No. 12 /X/

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VALUE LINE AGGRESSIVE INCOME TRUST

(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

220 East 42nd Street
New York, New York 10017-5891
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

Registrant's Telephone Number, including Area Code: (212) 907-1500

David T. Henigson
Value Line, Inc.
220 East 42nd Street
New York, New York 10017-5891
(NAME AND ADDRESS OF AGENT FOR SERVICE)
Copy to:
Peter D. Lowenstein
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830

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

/ / immediately upon filing pursuant to paragraph (b)

/X/ on June 1, 1997 pursuant to paragraph (b)

/ / 60 days after filing pursuant to paragraph (a)

/ / on (date) pursuant to paragraph (a) of rule 485

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PURSUANT TO THE PROVISIONS OF RULE 24 f-2(a)(1) UNDER THE INVESTMENT COMPANY ACT
OF 1940, REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OF SHARES OF BENEFICIAL
INTEREST UNDER THE SECURITIES ACT OF 1933. REGISTRANT FILED ITS RULE 24 f-2
NOTICE FOR THE YEAR ENDED JANUARY 31, 1997 ON OR ABOUT FEBRUARY 28, 1997.

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<PAGE>
VALUE LINE AGGRESSIVE INCOME TRUST
FORM N-1A
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)

<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- ---------------- ---------------------------------------
<S> <C> <C>
PART A (PROSPECTUS)
Item 1. Cover Page............................................ Cover Page
Item 2. Synopsis.............................................. Omitted
Item 3. Condensed Financial Information....................... Summary of Fund Expenses; Financial
Highlights
Item 4. General Description of Registrant..................... Cover Page; Investment Objective and
Policies; Investment Restrictions;
Additional Information
Item 5. Management of the Fund................................ Summary of Fund Expenses; Management of
the Fund; Additional Information
Item 6. Capital Stock and Other Securities.................... Dividends, Distributions and Taxes;
Additional Information
Item 7. Purchase of Securities Being Offered.................. How to Buy Shares; Calculation of Net
Asset Value; Investor Services
Item 8. Redemption or Repurchase of Securities................ How to Redeem Shares
Item 9. Pending Legal Proceedings............................. Not Applicable

PART B (STATEMENT OF ADDITIONAL INFORMATION)
Item 10. Cover Page............................................ Cover Page
Item 11. Table of Contents..................................... Table of Contents
Item 12. General Information and History....................... Additional Information (Part A)
Item 13. Investment Objectives and Policies.................... Investment Objective and Policies;
Investment Restrictions
Item 14. Management of the Fund................................ Trustees and Officers
Item 15. Control Persons and Principal Holders of Securities... Additional Information (Part A);
Trustees and Officers
Item 16. Investment Advisory and Other Services................ Additional Information (Part A); The
Adviser
Item 17. Brokerage Allocation.................................. Additional Information (Part A);
Brokerage Arrangements
Item 18. Capital Stock and Other Securities.................... Additional Information (Part A)
Item 19. Purchase, Redemption and Pricing of Securities Being
Offered............................................. How to Buy Shares; Suspension of
Redemptions; Calculation of Net Asset
Value (Part A)
Item 20. Tax Status............................................ Taxes
Item 21. Underwriters.......................................... Not Applicable
Item 22. Calculation of Performance Data....................... Performance Information (Part A);
Performance Data
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>

<TABLE>
<S> <C>
VALUE LINE PROSPECTUS
AGGRESSIVE INCOME TRUST June 1, 1997
</TABLE>

220 East 42nd Street, New York, New York 10017-5891
1-800-223-0818 or 1-800-243-2729

Value Line Aggressive Income Trust (the "Fund") is a
no-load investment company whose investment
objective is to maximize current income. Capital
appreciation is a secondary objective which will
only be sought when consistent with the Fund's
primary objective.

THE FUND INVESTS PRIMARILY IN LOWER-RATED,
FIXED-INCOME CORPORATE SECURITIES (ALSO KNOWN AS
"JUNK BONDS") ISSUED BY COMPANIES THAT ARE RATED B++
OR LOWER FOR RELATIVE FINANCIAL STRENGTH IN STANDARD
OR EXPANDED EDITION OF THE VALUE LINE INVESTMENT
SURVEY. THE FUND WILL NOT NORMALLY PURCHASE
SECURITIES ISSUED BY COMPANIES RATED C. LOWER-RATED
SECURITIES HAVE CERTAIN SPECULATIVE CHARACTERISTICS
AND INVOLVE GREATER INVESTMENT RISK, INCLUDING THE
RISK OF DEFAULT, THAN HIGH-RATED SECURITIES. SUCH
SECURITIES MAY BE SUBJECT TO GREATER MARKET
FLUCTUATIONS AND RISKS OF LOSS OF INCOME AND
PRINCIPAL THAN LOWER YIELDING, HIGHER RATED
FIXED-INCOME SECURITIES. INVESTORS SHOULD CAREFULLY
CONSIDER THESE RISKS PRIOR TO INVESTING. SEE
"INVESTMENT OBJECTIVE AND POLICIES."

The Fund's investment adviser is Value Line, Inc.
(the "Adviser").

Shares of the Fund are offered at net asset value.
There are no sales charges or redemption fees.

This Prospectus sets forth concise information about the Fund that a
prospective investor ought to know before investing. This Prospectus
should be retained for future reference. Additional information about
the Fund is contained in a Statement of Additional Information, dated
June 1, 1997, which has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference. A copy
of the Statement of Additional Information may be obtained at no charge
by writing or telephoning the Fund at the address or telephone numbers
listed above.

DISTRIBUTOR
Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891

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

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Load on Purchases..................................................... None
Sales Load on Reinvested Dividends.......................................... None
Deferred Sales Load......................................................... None
Redemption Fees............................................................. None
Exchange Fee................................................................ None

ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees............................................................. .75%
12b-1 Fees.................................................................. None
Other Expenses.............................................................. .35%
Total Fund Operating Expenses............................................... 1.10%
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------

<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period:....... $ 11 $ 35 $ 61 $ 134
</TABLE>

The foregoing is based upon the expenses for the year ended January 31,
1997, and is designed to assist investors in understanding the various costs and
expenses that an investor in the Fund will bear directly or indirectly. Actual
expenses in the future may be greater or less than these shown.

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The following information on selected per share data and ratios, insofar as
it pertains to each of the five years in the period ended January 31, 1997, has
been audited by Price Waterhouse LLP, independent accountants, whose unqualified
report thereon appears in the Fund's Annual Report to Shareholders which is
incorporated by reference in the Statement of Additional Information. This
information should be read in conjunction with the financial statements and
notes thereto which appear in the Fund's Annual Report to Shareholders available
from the Fund without change.

2
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
---------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year....... $7.64 $6.80 $8.00 $7.35 $7.18 $6.27 $7.10 $8.00 $8.28
-------- -------- --------- -------- -------- -------- --------- --------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment
income.............. .75 .69 .68 .67 .67 .74 .77 .88 .95
Net gains or losses
on securities (both
realized and
unrealized)......... .57 .85 (1.20 ) .65 .17 .91 (.83 ) (.91 ) (.27)
-------- -------- --------- -------- -------- -------- --------- --------- --------
Total from
investment
operations........ 1.32 1.54 (.52 ) 1.32 .84 1.65 (.06 ) (.03 ) .68
-------- -------- --------- -------- -------- -------- --------- --------- --------
LESS DISTRIBUTIONS:
Dividends from net
investment income... (.75 ) (.70 ) (.68 ) (.67 ) (.67 ) (.74 ) (.77 ) (.87 ) (.96)
-------- -------- --------- -------- -------- -------- --------- --------- --------
Change in net asset
value................. .57 .84 (1.20 ) .65 .17 .91 (.83 ) (.90 ) (.28)
-------- -------- --------- -------- -------- -------- --------- --------- --------
Net asset value, end of
year.................... $8.21 $7.64 $6.80 $8.00 $7.35 $7.18 $6.27 $7.10 $8.00
-------- -------- --------- -------- -------- -------- --------- --------- --------
-------- -------- --------- -------- -------- -------- --------- --------- --------
Total return............. 18.12 % 23.79 % (6.66 %) 18.74 % 12.30 % 27.45 % (.73 %) (.55 %) 8.50%
-------- -------- --------- -------- -------- -------- --------- --------- --------
-------- -------- --------- -------- -------- -------- --------- --------- --------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in thousands).......... $83,765 $41,776 $ 29,760 $46,223 $33,527 $31,404 $ 23,396 $ 29,157 $45,943
Ratio of expenses to
average net assets...... 1.10 % 1.22 % 1.27 % 1.20 % 1.15 % 1.18 % 1.43 % 1.30 % 1.14%
Ratio of net investment
income to average net
assets.................. 9.70 % 9.67 % 9.23 % 8.84 % 9.40 % 10.74 % 11.74 % 11.46 % 11.61%
Portfolio turnover
rate.................... 276 % 284 % 221 % 320 % 148 % 59 % 36 % 129 % .95%

1988
---------
<S> <C>
Net asset value,
beginning of year....... $9.90
---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment
income.............. 1.15
Net gains or losses
on securities (both
realized and
unrealized)......... (1.62 )
---------
Total from
investment
operations........ (.47 )
---------
LESS DISTRIBUTIONS:
Dividends from net
investment income... (1.15 )
---------
Change in net asset
value................. (1.62 )
---------
Net asset value, end of
year.................... $8.28
---------
---------
Total return............. (5.33 %)
---------
---------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in thousands).......... $ 54,213
Ratio of expenses to
average net assets...... 1.22 %
Ratio of net investment
income to average net
assets.................. 12.29 %
Portfolio turnover
rate.................... 134 %
</TABLE>

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund is to maximize current income. Capital
appreciation is a secondary objective but only when consistent with the Fund's
primary objective. Capital appreciation may result, for example, from an
improvement in the credit standing of an issuer whose securities are held in the
Fund's portfolio or from a general lowering of interest rates, or a combination
of both. Conversely, capital depreciation may result, for example, from a
lowered credit standing or a general rise in interest rates, or a combination of
both. The Fund's investment objective cannot be changed without shareholder
approval. There can be no assurance that the Fund's investment objective will be
achieved as there are risks in all investments.

BASIC INVESTMENT STRATEGY

In seeking its primary objective, the Fund will, under normal conditions,
invest at least 80% of its net assets in high-yielding, fixed-income corporate
securities (i) issued by companies that are rated B++ or lower for relative
financial strength in either the Standard or Expanded Editions of The Value Line
Investment Survey, or (ii) issued by companies not followed by either editions
of The Value Line Investment Survey if the Adviser believes that the financial
condition of the issuers of such securities or the protection afforded by the
terms of the securities themselves limit the risk to the Fund to a degree
comparable to that of securities issued by companies with the Value Line
financial strength ratings. The foregoing may include "convertible
securities"--that is, bonds, debentures, corporate notes, preferred stocks or
other securities which are convertible into common stock. The balance of the
Fund's portfolio may include U.S. government securities, warrants, or common
shares when consistent with the Fund's primary objective or acquired as part of
a unit combining fixed-income and equity securities. Common shares received upon
conversion or exercise of warrants and securities remaining upon the breakup of
units or detachments of warrants may also be retained in the Fund's portfolio to
permit orderly disposition or to establish long-term holding periods for federal
income tax purposes. The Fund is not required to sell securities for the purpose
of assuring that 80%

3
<PAGE>
of its assets are invested in high-yielding, fixed-income securities. The Fund
may also lend its portfolio securities, enter into repurchase agreements, write
covered call options, purchase "when-issued" securities, and enter into futures
contracts.

In selecting securities for purchase or sale, the Adviser will give
consideration to the ratings for relative financial strength contained in the
Standard and Expanded Editions of The Value Line Investment Survey for the
approximately 3,500 companies followed therein. These ratings range from A++ to
C in nine categories, each with about an equal number of companies. Companies
that have the best financial strength (relative to the other companies followed
in The Value Line Investment Survey) are given an "A++" rating, indicating an
ability to weather hard times better than the vast majority of other companies.
Those that don't quite merit the top rating are given an "A+" grade, and so on.
Those rated "C+" are well below average, and "C" is reserved for companies with
very serious financial problems. These ratings are based upon computer analysis
of a number of key variables that measure financial leverage, business risk, and
company size. The ratings in the Standard Edition of The Value Line Investment
Survey also reflect the judgment of the Adviser's analysts regarding factors
that cannot be quantified across-the-board for all companies. The primary
variables that are indexed and studied include equity coverage of debt, equity
coverage of intangibles, "quick ratio," accounting methods, variability of
return, fixed charge coverage, and company size. For a description of these
ratings, see page 17.

Although the Fund invests principally in securities issued by companies that
are rated B++, or lower (or companies not covered by The Value Line Investment
Survey but which, in the opinion of the Adviser, are of comparable financial
condition), the Fund may purchase securities issued by companies rated C when,
in the Adviser's opinion, special circumstances suggest that the financial
condition of the individual security is stronger than that of the company
issuing the security or the investment merits of the security are stronger than
implied by the company's financial strength rating. As of April 30, 1997, the
percentage of the Fund's net assets invested in each rating category was as
follows: Repurchase agreements = 14.5%; B+ = 5.8%; B = 44.2%; C++ = 1.2%; and
nonrated = 34.3%. In the Adviser's opinion the average credit quality of the
Fund's nonrated securities was equivalent to a C++.

INVESTMENT RISKS OF HIGH YIELDING SECURITIES. High yields are usually
available on securities that are lower rated, that is, on securities of
companies that the Adviser rates B++ or lower for financial strength (generally,
companies that are among the bottom half of the companies followed by The Value
Line Investment Survey), or on securities of companies that the Adviser
considers to be of equivalent creditworthiness. High-yielding, lower-rated
securities, also known as junk bonds, have certain speculative characteristics
and involve greater investment risk, including the possibility of default or
bankruptcy, than is the case with high-rated securities.

Since investors generally perceive that there are greater risks associated
with the lower-rated securities of the type in which the Fund may invest, the
yields and prices of such securities may tend to fluctuate more than those for
higher-rated securities. In the lower quality segments of the fixed-income
securities market, changes in perceptions of issuers' creditworthiness tend to
occur more frequently and in a more pronounced manner than do changes in higher
quality segments of the fixed-income securities market, resulting in greater
yield and price volatility.

Another factor which causes fluctuations in the prices of fixed-income
securities is the supply and demand for similarly rated securities. In addition,
though prices of fixed-income securities

4
<PAGE>
fluctuate in response to the general level of interest rates the prices of high
yield bonds have been found to be less sensitive to interest rate changes than
higher-rated instruments, but more sensitive to adverse economic changes or
individual corporate developments. An economic downturn or increase in interest
rates is likely to have a negative effect on the high yield bond market and on
the value of the high yield bonds in the Fund's portfolio, as well as on the
ability of the bond's issuers to repay principal and interest.

Fluctuations in the prices of portfolio securities subsequent to their
acquisition will not affect cash income from such securities but will be
reflected in the Fund's net asset value. Lower-rated and comparable non-rated
securities tend to offer higher yields than higher-rated securities with the
same maturities because the historical financial conditions of the issuers of
such securities may not have been as strong as that of other issuers. Since
lower-rated securities generally involve greater risks of loss of income and
principal than higher-rated securities, investors should consider carefully the
relative risks associated with investments in securities which carry lower
ratings and in comparable non-rated securities.

An additional risk of high yield securities is the limited liquidity and
secondary market support and thus the absence of readily available market
quotations. As a result, the responsibility of the Fund's Trustees to value the
securities becomes more difficult and judgment plays a greater role in valuation
because there is less reliable, objective data available.

Special tax considerations are associated with investing in high yield bonds
structured as zero coupon or pay-in-kind securities. The Fund accrues income on
these securities prior to the receipt of cash payments. However, a fund must
distribute substantially all of its income to its shareholders to qualify for
pass-through treatment under the tax law. Therefore, a fund may have to dispose
of its portfolio securities under disadvantageous circumstances to generate cash
to satisfy distribution requirements.

When changing economic conditions and other factors cause the yield
difference between lower-rated and higher-rated securities to narrow, the Fund
may purchase higher-rated securities which provide similar yields but have less
risk. In addition, under unusual market or economic conditions, the Fund may,
for defensive purposes, invest up to 100% of its assets in securities issued or
guaranteed by the U.S. government or its instrumentalities or agencies,
certificates of deposit, bankers' acceptances and other bank obligations, highly
rated commercial paper or other fixed-income securities deemed by the Adviser to
be consistent with a defensive posture, or may hold its assets in cash. The
yield on such securities may be lower than the yield on lower-rated fixed-income
securities.

MISCELLANEOUS INVESTMENT PRACTICES

REPURCHASE AGREEMENTS. The Fund may invest temporary cash balances in
repurchase agreements. A repurchase agreement involves a sale of securities to
the Fund, with the concurrent agreement of the seller (a member bank of the
Federal Reserve System or a securities dealer which the Adviser believes to be
financially sound) to repurchase the securities at the same price plus an amount
equal to an agreed-upon interest rate, within a specified time, usually less
than one week, but, on occasion, at a later time. The Fund will pay for such
securities only upon physical delivery or evidence of book-entry transfer to the
account of the custodian or a bank acting as agent for the Fund. Repurchase
agreements may also be viewed as loans made by the Fund which are collateralized
by the securities subject to repurchase. The value of the underlying securities
will be at least

5
<PAGE>
equal at all times to the total amount of the repurchase obligation, including
the interest factor. In the event of a bankruptcy or other default of a seller
of a repurchase agreement, the Fund could experience both delays in liquidating
the underlying security and losses, including: (a) possible decline in the value
of the underlying security during the period while the Fund seeks to enforce its
rights thereto; (b) possible subnormal levels of income and lack of access to
income during this period; and (c) expenses of enforcing its rights. The
Trustees monitor the creditworthiness of parties with which the Fund enters into
repurchase agreements.

LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities to
broker-dealers or institutional investors if, as a result thereof, the aggregate
value of all securities loaned does not exceed 33 1/3% of the total assets of
the Fund. The loans will be made in conformity with applicable regulatory
policies and will be 100% collateralized by cash, cash equivalents or U.S.
Treasury bills on a daily basis in an amount equal to the market value of the
securities loaned and interest earned. The Fund retains the right to call the
loaned securities upon notice and intends to call loaned voting securities in
anticipation of any important or material matter to be voted on by stockholders.
While there may be delays in recovery or even loss of rights in the collateral
should the borrower fail financially, the loans will be made only to firms
deemed by the Adviser to be of good standing and will not be made unless, in the
judgment of the Adviser, the consideration which can be earned from such loans
justifies the risk. The Fund may pay reasonable custodian and administrative
fees in connection with the loans.

COVERED CALL OPTIONS. The Fund may write covered call options on its
portfolio securities in an attempt to earn additional income on its portfolio or
to partially offset an expected decline in the price of a security. When the
Fund writes a covered call option, it gives the purchaser of the option the
right to buy the underlying security at the price specified in the option (the
"exercise price") at any time during the option period. If the option expires
unexercised, the Fund will realize a short-term capital gain to the extent of
the amount received for the option (the "premium"). If the option is exercised,
a decision over which the Fund has no control, the Fund must sell the underlying
security to the option holder at the exercise price. By writing a covered
option, the Fund foregoes, in exchange for the premium less the commission ("net
premium"), the opportunity to profit during the option period from an increase
in the market value of the underlying security above the exercise price. The
Fund will not write call options in an aggregate amount greater than 25% of its
net assets and will only write call options which are traded on a national
securities exchange.

The Fund will purchase call options only to close out a position. When an
option is written on securities in the Fund's portfolio and it appears that the
purchaser of that option is likely to exercise the option and purchase the
underlying security, it may be considered appropriate to avoid liquidating the
Fund's position, or the Fund may wish to extinguish a call option sold by it so
as to be free to sell the underlying security. In such instances the Fund may
purchase a call option on the same security with the same exercise price and
expiration date which had been previously written. Such a purchase would have
the effect of closing out the option which the Fund has written. The Fund
realizes a gain if the amount paid to purchase the call option is less than the
premium received for writing a similar option and a loss if the amount paid to
purchase a call option is greater than the premium received for writing a
similar option. Generally, the Fund realizes a short-term loss if the amount
paid to purchase the call option with respect to a stock is greater than the
premium received for writing the option. If the underlying security has
substantially risen in value, it may be difficult or expensive to purchase the
call option for the closing transaction.

6
<PAGE>
WHEN-ISSUED SECURITIES. The Fund may from time to time purchase securities
on a "when-issued" basis. The price of such securities, which may be expressed
in yield terms, is fixed at the time the commitment to purchase is made, but
delivery and payment for the when-issued securities take place at a later date.
Normally, the settlement date occurs within one month of the purchase. During
the period between purchase and settlement, no payment is made by the Fund to
the issuer and no interest accrues to the Fund. Forward commitments involve a
risk of loss if the value of the security to be purchased declines prior to the
settlement date, which risk is in addition to the risk of decline in value of
the Fund's other assets. While when-issued securities may be sold prior to the
settlement date, the Fund intends to purchase such securities with the purpose
of actually acquiring them unless a sale appears desirable for investment
reasons. At the time the Fund makes the commitment to purchase a security on a
when-issued basis, it will record the transaction and reflect the value of the
security in determining its net asset value. The Fund does not believe that its
net asset value or income will be adversely affected by its purchase of
securities on a when-issued basis. The Fund will maintain cash and high-quality
marketable securities equal in value to commitments for when-issued securities
in a segregated account. Such segregated securities either will mature or, if
necessary, be sold on or before the settlement date.

SHORT SALES. The Fund may from time to time make short sales of securities
or maintain a short position, provided that at all times when a short position
is open the Fund owns an equal amount of such securities or securities
convertible into or exchangeable for an equivalent amount of such securities. No
more than 10% of the value of the Fund's net assets taken at market may at any
one time be held as collateral for such sales. It is the present intention of
management to make such sales only for the purpose of deferring realization of
gain or loss for federal income tax purposes.

FINANCIAL FUTURES CONTRACTS. The Fund may invest in financial futures
contracts ("futures contracts") and related options thereon limited to 30% of
the Fund's assets. If the Adviser anticipates that interest rates will rise, the
Fund may sell a futures contract or a call option thereon or purchase a put
option on such futures contract to attempt to hedge against a decrease in the
value of the Fund's securities. If the Adviser anticipates that interest rates
will decline, the Fund may purchase a futures contract or a call option thereon
to protect against an increase in the prices of the securites the Fund intends
to purchase. These futures contracts and related options thereon will be used
only as a hedge against anticipated interest rate changes. A futures contract
sale creates an obligation on the part of the Fund, as seller, to deliver the
specific type of instrument called for in the contract at a specified price. A
futures contract purchase creates an obligation by the Fund, as purchaser, to
take delivery of the specific type of financial instrument at a specified future
time at a specified price.

Although the terms of futures contracts specify actual delivery or receipt
of securities, in most instances the contracts are closed out before the
settlement date without the making or taking of delivery of the securities.
Closing out a futures contract is effected by entering into an offsetting
purchase or sale transaction. An offsetting transaction for a futures contract
sale is effected by the Fund entering into a futures contract purchase for the
same aggregate amount of the specific type of financial instrument and same
delivery date. If the price in the sale exceeds the price in the offsetting
purchase, the Fund is immediately paid the difference and thus realizes a gain.
If the purchase price of the offsetting transaction exceeds the sale price, the
Fund pays the difference and realizes a loss. Similarly, the closing out of a
futures contract purchase is effected by the Fund entering into a futures
contract sale. If the offsetting sale price exceeds the purchase price, the Fund
realizes a gain, and if the offsetting sale price is less than the purchase
price, the Fund realizes a loss.

7
<PAGE>
The Fund is required to maintain margin deposits with brokerage firms
through which it effects futures contracts and options thereon. The initial
margin requirements vary according to the type of the underlying security. In
addition, due to current industry practice, daily variations in gains and losses
on open contracts are required to be reflected in cash in the form of variation
margin payments. The Fund may be required to make additional margin payments
during the term of the contract.

Currently, futures contracts can be purchased on debt securities such as
U.S. Treasury bills, bonds, and notes, certificates of the Government National
Mortgage Association and bank certificates of deposit. The Fund may invest in
futures contracts covering these types of financial instruments as well as in
new types of such contracts that become available in the future. The Fund will
only enter into financial futures contracts which are traded on national futures
exchanges, principally the Chicago Board of Trade and the Chicago Mercantile
Exchange.

A risk in employing futures contracts to protect against the price
volatility of portfolio securities is that the price of a futures contract may
move more or less than the price of the securities being hedged. There is also a
risk of imperfect correlation where the securities underlying futures contracts
have different maturities from the portfolio securities being hedged. Another
risk is that the Fund's Adviser could be incorrect in its expectations as to the
direction or extent of various interest rate movements or the time span within
which the movements takes place. For example, if the Fund sold futures contracts
for the sale of securities in anticipation of an increase in interest rates, and
then interest rates declined instead, causing bond prices to rise, the Fund
would lose money on the sale.

Unlike a futures contract, which requires the parties to buy and sell a
security on a set date, an option on a futures contract entitles its holder to
decide on or before a future date whether to enter into such a contract. If the
holder decides not to enter into the contract, the premium paid for the option
is lost. Since the value of the option is fixed at the point of sale there are
no daily payments of cash in the nature of "variation" or "maintenance" margin
payments to reflect the change in the value of the underlying contract as there
are by a purchaser or seller of a futures contract. The value of the option does
change and is reflected in the net asset value of the Fund.

Put and call options on financial futures have characteristics similar to
those of other options. In addition to the risks associated with investing in
options on securities, there are particular risks associated with investing in
options on futures. In particular, the ability to establish and close out
positions on such options will be subject to the development and maintenance of
a liquid secondary market. The Fund will enter into an options on futures
position only if there appears to be a liquid secondary market therefor,
although there can be no assurance that such a market will actually develop or
be maintained.

The Fund may not enter into futures contracts or related options thereon if
immediately thereafter the amount committed to margin plus the amount paid for
option premiums exceeds 5% of the value of the Fund's total assets. In instances
involving the purchase of futures contracts by the Fund, an amount equal to the
market value of the futures contract will be deposited in a segregated account
of cash and cash equivalents to collateralize the position and thereby insure
that the use of such futures contract is unleveraged.

RESTRICTED SECURITIES. On occasion, the Fund may purchase securities which
would have to be registered under the Securities Act of 1933 if they were to be
publicly distributed. However, it will not do so if the value of such securities
and other securities which are not readily marketable

8
<PAGE>
(including repurchase agreements maturing in more than seven days) would exceed
10% of the market value of its total assets. It is management's policy to permit
the occasional acquisition of such restricted securities only if (except in the
case of short-term non-convertible debt securities) there is an agreement by the
issuer to register such securities, ordinarily at the issuer's expense, when
requested to do so by the Fund. The acquisition in limited amounts of restricted
securities is believed to be helpful toward the attainment of the Fund's
secondary objective of capital appreciation without unduly restricting its
liquidity or freedom in the management of its portfolio. However, because
restricted securities may only be sold privately or in an offering registered
under the Securities Act of 1933, or pursuant to an exemption from such
registration, substantial time may be required to sell such securities, and
there is greater than usual risk of price decline prior to sale.

In addition, the Fund may purchase certain restricted securities ("Rule 144A
securities") for which there is a secondary market of qualified institutional
buyers, as contemplated by Rule 144A under the Securities Act of 1933. Rule 144A
provides an exemption from the registration requirements of the Securities Act
for the resale of certain restricted securities to qualified institutional
buyers. The Adviser, under the supervision of the Board of Directors, will
consider whether securities purchased under Rule 144A are liquid or illiquid for
purposes of the Fund's limitation on investment in securities which are not
readily marketable or are illiquid. Among the factors to be considered are the
frequency of trades and quotes, the number of dealers and potential purchasers,
dealer undertakings to make a market and the nature of the security and the time
needed to dispose of it. To the extent that the liquid Rule 144A securities that
the Fund holds become illiquid, due to lack of sufficient qualified
institutional buyers or market or other conditions, the percentage of the Fund's
assets invested in illiquid assets would increase. The Adviser, under the
supervision of the Board of Directors, will monitor the Fund's investments in
Rule 144A securities and will consider appropriate measures to enable the Fund
to maintain sufficient liquidity for operating purposes and to meet redemption
requests.

RISK FACTORS

Investors should be aware of the following:

-There are risks in all investments, including any stock investment, and
in all mutual funds. The Fund's net asset value will fluctuate to
reflect the investment performance of the securities held by the Fund.

-The value a shareholder receives upon redemption may be greater or
lesser than the value of such shares when acquired.

-The use of investment techniques such as investing in repurchase
agreements, lending portfolio securities, purchasing securities on a
when-issued basis, short-selling and trading in stock index futures
contracts and in options on such contracts involves greater risk than
does an investment in a fund that does not engage in these activities.

INVESTMENT RESTRICTIONS

The Fund has adopted a number of investment restrictions which may not be
changed without shareholder approval. These are set forth in the Statement of
Additional Information and provide, among other things, that the Fund may not:
(a) borrow in excess of 10% of the value of its assets and then only as a
temporary measure; (b) purchase securities (other than U.S. government
securities) if the purchase would cause the Fund, at the time, to have more than
5% of the value of its total assets

9
<PAGE>
invested in the securities of any one company or to own more than 10% of the
outstanding voting securities or any other class of securities of any one
company; or (c) invest 25% or more of the value of the Fund's assets in one
particular industry.

MANAGEMENT OF THE FUND

The management and affairs of the Fund are supervised by the Fund's
Trustees, who were elected by the shareholders. The Fund's officers conduct and
supervise the daily business operations of the Fund. The Fund's investment
decisions are made by an investment committee of employees of the Adviser. The
Fund's Annual Report, which will be made available upon request and without
charge, contains a discussion of the Fund's performance.

THE ADVISER. The Adviser was organized in 1982 and is the successor to
substantially all of the operations of Arnold Bernhard & Co., Inc. ("AB&Co.").
The Adviser was formed as part of a reorganization of AB&Co., a sole
proprietorship formed in 1931 which became a New York corporation in 1946.
AB&Co. currently owns approximately 81% of the outstanding shares of the
Adviser's common stock. Jean Bernhard Buttner, Chairman, President and Chief
Executive Officer of the Adviser, owns all of the voting stock of AB&Co. All of
the non-voting stock is owned by or for the benefit of members of the Bernhard
family, employees and former employees of AB&Co., or the Adviser. The Adviser
currently acts as investment adviser to the other Value Line mutual funds and
furnishes investment advisory services to private and institutional accounts
with combined assets in excess of $5 billion. Value Line Securities, Inc., the
Fund's distributor, is a subsidiary of the Adviser. The Adviser manages the
Fund's investments, provides various administrative services and supervises the
Fund's daily business affairs, subject to the authority of the Trustees. The
Adviser is paid an advisory fee at an annual rate of 0.75% of the first $100
million of the Fund's average daily net assets and 0.5% of any excess. Although
this fee is higher than that paid by many other investment companies, it is not
unusually high for investment companies with a similar investment objective. For
more information about the Fund's management fees and expenses, see the "Summary
of Fund Expenses" on page 2.

BROKERAGE. The Fund may pay brokerage commissions to Value Line Securities,
Inc., which clears transactions through unaffiliated broker-dealers.

CALCULATION OF NET ASSET VALUE

The net asset value of the Fund's shares for purposes of both purchases and
redemptions is determined once daily as of the close of trading of the first
session of the New York Stock Exchange (currently 4:00 p.m., New York time) on
each day that the New York Stock Exchange is open for trading except on days on
which no orders to purchase, sell or redeem Fund shares have been received. The
New York Stock Exchange is currently closed on New Year's Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The net asset value per share is determined by dividing the total
value of the investments and other assets of the Fund, less any liabilities, by
the total outstanding shares.

Fixed-income corporate securities are valued on the basis of prices provided
by an independent pricing service approved by the Trustees. In valuing such
securities, the pricing service generally takes into account appropriate factors
such as institutional size trading characteristics and other market data.
Securities not priced in this manner are valued at the midpoint between the
latest available bid and asked prices in the principal market (last sales price
if the principal market is an exchange) in which such securities are normally
traded. Other assets and securities for which

10
<PAGE>
market valuations are not readily available are valued at their fair value as
the Trustees may determine. Short-term instruments with maturities of 60 days or
less at the date of purchase are valued at amortized cost, which approximates
market.

HOW TO BUY SHARES

PURCHASE BY CHECK. To purchase shares, send a check made payable to
"NFDS-Agent" and a completed and signed application form to Value Line Funds,
c/o NFDS, P.O. Box 419729, Kansas City, MO 64141-6729. Third party checks will
not be accepted for either initial or subsequent investments. For assistance in
completing the application and for information on pre-authorized telephone
purchases, call Value Line Securities at 1-800-223-0818 during New York business
hours. Upon receipt of the completed and signed purchase application and a
check, National Financial Data Services ("NFDS"), the Fund's shareholder
servicing agent, will purchase full and fractional shares (to three decimal
places) at the net asset value next computed after the funds are received and
will confirm the investment to the investor. Subsequent investments may be made
by attaching a check to the confirmation's "next payment" stub, by telephone or
by federal funds wire. Investors may also buy shares through broker-dealers
other than Value Line Securities. Such broker-dealers may charge investors a
reasonable service fee. Neither Value Line Securities nor the Fund receives any
part of such fees when charged (and which can be avoided by investing directly).
If an order to buy shares is cancelled due to nonpayment or because the
investor's check does not clear, the purchaser will be responsible for any loss
incurred by the Fund or Value Line Securities by reason of such cancellation. If
the purchaser is a shareholder, Value Line Securities reserves the right to
redeem sufficient shares from the shareholder's account to protect the Fund
against loss. Minimum orders are $1,000 for an initial purchase and $250 for
each subsequent purchase. The Fund may refuse any order for the purchase of
shares.

WIRE PURCHASE--$1,000 MINIMUM. An investor should call 1-800-243-2729 to
obtain an account number. After receiving an account number, instruct your
commercial bank to wire transfer "federal funds" via the Federal Reserve System
as follows:

State Street Bank and Trust Company, Boston, MA

ABA #011000028

Attn: Mutual Fund Division
DDA #99049868
Value Line Aggressive Income Trust
A/C #________________________
Shareholder's name and account information
Tax ID #________________________

NOTE: A COMPLETED AND SIGNED APPLICATION MUST BE MAILED IMMEDIATELY AND
RECEIVED BY NFDS BEFORE IT CAN HONOR ANY WITHDRAWAL OR EXCHANGE TRANSACTIONS.

After your account has been opened you may wire additional investments in
the same manner.

For an initial investment made by federal funds wire purchase, the wire must
include a valid social security number or tax identification number. Investors
purchasing shares in this manner will

11
<PAGE>
have 30 days after purchase to provide the certification and signed account
application. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn on only U.S. banks. Until receipt of the above, any
distributions from the account will be subject to 31% withholding.

SUBSEQUENT TELEPHONE PURCHASES--$250 MINIMUM. Upon completion of the
telephone purchase authorization section of the account application,
shareholders who own Fund shares with a current value of $500 or more may also
purchase additional shares in amounts of $250 or more or up to twice the value
of their shares by calling 1-800-243-2729 between 9:00 a.m. and 4:00 p.m. New
York time. Such orders will be priced at the closing net asset value on the day
received and payment will be due within three business days. If payment is not
received within the required time or a purchaser's check does not clear, the
order is subject to cancellation and the purchaser will be responsible for any
loss incurred by the Fund or Value Line Securities. Shares may not be purchased
by telephone for a tax-sheltered retirement plan.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Dividends from the Fund's net investment income are declared daily and paid
monthly. Net realized capital gains, if any, are distributed to shareholders at
least annually. Income dividends and capital gains distributions are
automatically reinvested in additional shares of the Fund unless the shareholder
has requested otherwise. Because the Fund intends to distribute all of its net
investment income and capital gains to shareholders, it is not expected that the
Fund will be required to pay any federal income taxes. However, shareholders of
the Fund normally will have to pay federal income taxes, and any applicable
state or local taxes, on the dividends and capital gains distributions they
receive from the Fund (whether or not reinvested in additional Fund shares).
Shareholders will be informed annually of the amount and nature of the Fund's
income and distributions.

PERFORMANCE INFORMATION

The Fund may from time to time include information regarding its total
return performance or yield in advertisements or in information furnished to
existing or prospective shareholders. When information regarding total return is
furnished, it will be based upon changes in the Fund's net asset value and will
assume the reinvestment of all capital gains distributions and income dividends.
It will take into account nonrecurring charges, if any, which the Fund may incur
but will not take into account income taxes due on Fund distributions.

The table below illustrates the total return performance of the Fund for the
periods indicated by showing the value of a hypothetical $1,000 investment made
at the beginning of each period. The information contained in the table has been
computed by applying the Fund's average annual total return to the hypothetical
$1,000 investment. The table assumes reinvestment of all capital gains
distributions and income dividends, but does not take into account income taxes
due on Fund distributions or dividends.

<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN
--------------
<S> <C> <C>
For the year ended January 31, 1997..................................................... $ 1,181 18.12%
For the five years ended January 31, 1997............................................... $ 1,820 12.72 %
For the ten years ended January 31, 1997................................................ $ 2,352 8.93 %
</TABLE>

12
<PAGE>
When information regarding "yield" is furnished it will refer to the net
investment income per share generated by an investment in the Fund over a
thirty-day period. This income will then be annualized by assuming that the
amount of income generated by the investment during that thirty-day period is
generated each 30 days over one year and assuming that the income is reinvested
every six months.

Comparative performance information may be used from time to time in
advertising the Fund's shares, including data from Lipper Analytical Services,
Inc. and other industry or financial publications. The Fund may compare its
performance to that of other mutual funds with similar investment objectives and
to stock or other relevant indices. From time to time, articles about the Fund
regarding its performance or ranking may appear in national publications such as
Kiplinger's Personal Finance, Money Magazine, Financial World, Morningstar,
Personal Investor, Forbes, Fortune, Business Week, Wall Street Journal,
Investor's Business Daily, Donoghue and Barron's. Some of these publications may
publish their own rankings or performance reviews of mutual funds, including the
Fund. Reference to or reprints of such articles may be used in the Fund's
promotional literature.

Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield, total return or
distribution rate for any period should not be considered as a representation of
what an investment may earn or what an investor's total return or yield may be
in any future period.

HOW TO REDEEM SHARES

Shares of the Fund may be redeemed at any time at their current net asset
value next determined after NFDS receives a request in proper form. ALL REQUESTS
FOR REDEMPTION SHOULD BE SENT TO NFDS, P.O. BOX 419729, KANSAS CITY, MO
64141-6729. The value of shares of the Fund on redemption may be more or less
than the shareholder's cost, depending upon the market value of the Fund's
assets at the time. A shareholder with certificates for shares must surrender
the certificate properly endorsed with signature guaranteed. A signature
guarantee may be executed by any "eligible" guarantor. Eligible guarantors
include domestic banks, savings associations, credit unions, member firms of a
national securities exchange, and participants in the New York Stock Exchange
Medallion Signature Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. A guarantee from a Notary
Public is not an acceptable source. The signature on any request for redemption
of shares not represented by certificates, or on any stock power in lieu
thereof, must be similarly guaranteed. In each case the signature or signatures
must correspond to the names in which the account is registered. Additional
documentation may be required when shares are registered in the name of a
corporation, agent or fiduciary. For further information, you should contact
NFDS.

The Fund does not make a redemption charge but shares redeemed through
brokers or dealers may be subject to a service charge by such firms. A check in
payment of redemption proceeds will be mailed within seven days following
receipt of all required documents. However, payment may be postponed under
unusual circumstances such as when normal trading is not taking place on the New
York Stock Exchange. In addition, shares purchased by check may not be redeemed
for up to 15 calendar days following the purchase date.

13
<PAGE>
If the Trustees determine that it is in the best interests of the Fund, the
Fund may redeem, upon prior written notice, at net asset value, all shareholder
accounts which due to redemptions fall below $500 in net asset value. In such
event, an investor will have 30 days to increase the shares in his account to
the minimum level.

The Fund will ordinarily pay in cash all redemptions by any shareholder of
record. However, the Fund has reserved the right under the Investment Company
Act of 1940 to make payment in whole or in part in securities of the Fund, if
the Trustees determine that such action is in the best interests of the other
shareholders. Under such circumstances, the Fund will, nevertheless, pay to each
shareholder of record in cash all redemptions by such shareholder, during any
90-day period, up to the lesser of $250,000 or 1% of the Fund's net assets.
Securities delivered in payment of redemptions are valued at the same value
assigned to them in computing the net asset value per share. Shareholders
receiving such securities may incur brokerage costs on their sales.

BY TELEPHONE OR WIRE. You may redeem shares by telephone or wire
instructions to NFDS by so indicating on the initial application. Payment will
normally be transmitted, on the business day following receipt of your
instructions, to the bank account at the member bank of the Federal Reserve
System you have designated on your initial purchase application. The Fund
employs reasonable procedures to confirm that instructions communicated by
telephone are genuine. These procedures include requiring some form of personal
identification prior to acting upon instructions received by telephone. The Fund
will not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. Any loss will be borne by the investor. Heavy
wire traffic may delay the arrival of a wire until after public hours at your
bank. Alternatively, you may have your redemption payment mailed to the address
on your initial purchase application. Telephone or wire redemptions must be in
amounts of $1,000 or more and your instructions must include your name and
account number. The number to call before the close of business on the New York
Stock Exchange is 1-800-243-2729. Procedures for redeeming Fund shares by
telephone may be modified or terminated without notice at any time by the Fund.

BY CHECK. You may elect this method of redemption by so indicating on the
initial application and you will be provided a supply of checks by NFDS. These
checks may be made payable to the order of any person in any amount of $500 or
more. When your check is presented for payment, the Fund will redeem a
sufficient number of full and fractional shares in your account to cover the
amount of the check. Dividends will be earned by the shareholder on the check
proceeds until it clears. Checks will be returned unpaid if there are
insufficient shares to meet the withdrawal amount. Potential fluctuations in the
net asset value of the Fund's shares should be considered in determining the
amount of the check.

This method of redemption requires that your shares must remain in an open
account and that no share certificates are issued and outstanding. You cannot
close your account through the issuance of a check because the exact balance at
the time your check clears will not be known when you write the check.

If you use this privilege you will be required to sign a signature card
which will subject you to State Street Bank and Trust Company's rules and
regulations governing checking accounts. The authorization form which you must
sign also contains a provision relieving the bank, NFDS, the Fund, Value Line
Securities and the Adviser from liability for loss, if any, which you may
sustain

14
<PAGE>
arising out of a non-genuine instruction pursuant to this redemption feature.
Any additional documentation required to assure a genuine redemption must be
maintained on file with NFDS in such a current status as NFDS may deem
necessary. A new form properly signed and with the signature guaranteed must be
received and accepted by NFDS before authorized redemption instructions already
on file with NFDS can be changed.

An additional supply of checks will be furnished upon request. There
presently is no charge to the shareholder for these checks or their clearance.
However, the Fund and NFDS reserve the right to make reasonable charges and to
terminate or modify any or all of the services in connection with this privilege
at any time and without prior notice. NFDS will impose a $5 fee for stopping
payment of a check upon your request or if NFDS cannot honor the check due to
insufficient or uncollected funds or other valid reasons.

IMPORTANT: Shares purchased by check may not be redeemed until the Fund is
reasonably assured of the final collection of the purchase check, currently
determined to be up to 15 days.

INVESTOR SERVICES

VALU-MATIC-REGISTERED TRADEMARK-. The Fund offers a free service to its
shareholders, Valu-Matic-Registered Trademark-, through which monthly
investments of $25 or more may be made automatically into the shareholder's Fund
account. The shareholder authorizes the Fund to debit the shareholder's bank
account monthly for the purchase of Fund shares on or about the 3rd or 18th of
each month. Further information regarding this service can be obtained from
Value Line Securities by calling 1-800-223-0818.

EXCHANGE OF SHARES. Shares of the Fund may be exchanged for shares of the
other Value Line funds in any identically registered account on the basis of the
respective net asset values next computed after receipt of the exchange order.
No telephone exchanges can be made for less than $1,000. If shares of the Fund
are being exchanged for shares of The Value Line Cash Fund, Inc. or The Value
Line Tax Exempt Fund--Money Market Portfolio and the shares (including shares in
accounts under the control of one investment advisor) have a value in excess of
$500,000, then, at the discretion of the Adviser, the shares to be purchased
will be purchased at the closing price on the third business day following the
redemption of the shares being exchanged to allow the Fund to utilize normal
securities settlement procedures in transferring the proceeds of the redemption.

The exchange privilege may be exercised only if the shares to be acquired
may be sold in the investor's State. Prospectuses for the other Value Line funds
may be obtained from Value Line Securities by calling 1-800-223-0818. Each such
exchange involves a redemption and a purchase for tax purposes. Broker-dealers
are not prohibited from charging a commission for handling the exchange of Fund
shares. To avoid paying such a commission send the request in proper form to
NFDS. The Fund reserves the right to terminate the exchange privilege of any
account making more than eight exchanges a year. (An exchange out of The Value
Line Cash Fund, Inc. or The Value Line Tax Exempt Fund--Money Market Portfolio
is not counted for this purpose.) The exchange privilege may be modified or
terminated at any time, and any of the Value Line funds may discontinue offering
its shares generally, or in any particular State, without prior notice. To make
an exchange, call 1-800-243-2729. Although it has not been a problem in the
past, shareholders should be aware that a telephone exchange may be difficult
during periods of major economic or market changes.

SYSTEMATIC CASH WITHDRAWAL PLAN. A shareholder who has invested a minimum
of $5,000 in the Fund, or whose shares have attained that value, may request a
transfer of his shares to a Value

15
<PAGE>
Line Systematic Cash Withdrawal Account which NFDS will maintain in his name on
the Fund's books. Under the Systematic Cash Withdrawal Plan (the "Plan") the
shareholder will request that NFDS, acting as his agent, redeem monthly or
quarterly a sufficient number of shares to provide for payment to him, or
someone he designates, of any specified dollar amount (minimum $25). All
certificated shares must be placed on deposit under the Plan and dividends and
capital gains distributions, if any, are automatically reinvested at net asset
value. The Plan will automatically terminate when all shares in the account have
been redeemed. The shareholder may at any time terminate the Plan, change the
amount of the regular payment, or request liquidation of the balance of his
account on written notice to NFDS. The Fund may terminate the Plan at any time
on written notice to the shareholder.

TAX-SHELTERED RETIREMENT PLANS. Shares of the Fund may be purchased for
various types of retirement plans. For more complete information, contact Value
Line Securities at 1-800-223-0818 during New York business hours.

ADDITIONAL INFORMATION

The Fund is an open-end, diversified management investment company
established as a Massachusetts business trust under a Declaration of Trust dated
November 12, 1985. The Fund has an unlimited number of shares of beneficial
interest, $.01 par value. Each share has one vote with fractional shares voting
proportionately. Shares have no preemptive rights, are freely transferable, are
entitled to dividends as declared by the Trustees, and, if the Fund were
liquidated, would receive the net assets of the Fund.

The Trustees have the authority to issue two or more series of shares and to
designate the relative rights and preferences as between the different series,
although they have not exercised that authority. If more than one series of
shares were issued and a series were unable to meet its obligations, the
remaining series might have to assume the unsatisfied obligation of that series.

INQUIRIES. All inquiries regarding the Fund should be directed to the Fund
at the telephone numbers or address set forth on the cover page of this
Prospectus. Inquiries from shareholders regarding their accounts and account
balances should be directed to National Financial Data Services, servicing agent
for State Street Bank and Trust Company, the Fund's transfer agent,
1-800-243-2729. Shareholders should note that they may be required to pay a fee
for special requests such as historical transcripts of an account. Our Info-Line
provides the latest account information 24 hours a day, and is available to
shareholders with pushbutton phones. The Info-Line toll-free number is
1-800-243-2739.

WITHHOLDING. Mutual funds are required to withhold 31% of dividends,
distributions of capital gains and redemption proceeds in accounts without a
valid social security or tax identification number. You must provide this
information when you complete the Fund's application and certify that you are
not currently subject to backup withholding. The Fund reserves the right to
close by redemption accounts for which the holder fails to provide a valid
social security or tax identification number.

16
<PAGE>
DESCRIPTION OF VALUE LINE FINANCIAL STRENGTH RATINGS

Value Line ranks the companies followed by the Standard and Expanded Edition
of The Value Line Investment Survey into nine categories, each with about an
equal number of companies, as follows:

<TABLE>
<S> <C>
A++ Greatest relative financial strength. Companies among the very strongest of
the approximately 3,500 followed by The Value Line Investment Survey.
A+ Excellent relative financial strength. Companies with very high financial
strength, but not quite the highest among the Value Line 3,500.
A High-grade relative financial strength.
B++ Above average relative financial strength among the Value Line 3,500.
B+ Very good relative financial strength; approximately average among the large,
strong companies that dominate the Value Line 3,500.
B Good relative financial strength, although somewhat below the average of all
3,500 Value Line companies.
C++ Satisfactory relative financial strength.
C+ Significantly below average relative financial strength.
C Weakest relative financial strength.
</TABLE>

The Value Line ratings are based upon computer analysis of a number of key
variables that measure (a) financial leverage, (b) business risk and (c) company
size plus, in the Standard Edition of The Value Line Investment Survey, the
judgment of senior analysts regarding factors that cannot be quantified
across-the-board for all securities. The primary variables that are indexed and
studied include equity coverage of debt, equity coverage of intangibles, "quick
ratio," accounting methods, variability of return, quality of fixed charge
coverage, stock price stability, and company size.

17
<PAGE>
THE VALUE LINE FAMILY OF FUNDS
- -------------------------------------------

1950--THE VALUE LINE FUND seeks long-term growth of capital along with modest
current income by investing substantially all of its assets in common stocks or
securities convertible into common stock.
1952--THE VALUE LINE INCOME FUND'S primary investment objective is income, as
high and dependable as is consistent with reasonable growth. Capital growth to
increase total return is a secondary objective.
1956--THE VALUE LINE SPECIAL SITUATIONS FUND seeks to obtain long-term growth of
capital by investing not less than 80% of its assets in "special situations". No
consideration is given to achieving current income.
1972--VALUE LINE LEVERAGED GROWTH INVESTORS' sole investment objective is to
realize capital growth by investing substantially all of its assets in common
stocks. The Fund may borrow up to 50% of its net assets to increase its
purchasing power.
1979--THE VALUE LINE CASH FUND, a money market fund, seeks high current income
consistent with preservation of capital and liquidity.
1981--VALUE LINE U.S. GOVERNMENT SECURITIES FUND seeks maximum income without
undue risk to principal. Under normal conditions, at least 80% of the value of
its net assets will be invested in issues of the U.S. Government and its
agencies and instrumentalities.
1983--VALUE LINE CENTURION FUND* seeks long-term growth of capital as its sole
objective by investing primarily in stocks ranked 1 or 2 by Value Line for
year-ahead relative performance.
1984--THE VALUE LINE TAX EXEMPT FUND seeks to provide investors with maximum
income exempt from federal income taxes while avoiding undue risk to principal.
The Fund offers investors a choice of two portfolios: a Money Market Portfolio
and a High-Yield Portfolio.
1985--VALUE LINE CONVERTIBLE FUND seeks high current income together with
capital appreciation primarily from convertible securities ranked 1 or 2 for
year-ahead performance by The Value Line Convertible Ranking System.
1986--VALUE LINE AGGRESSIVE INCOME TRUST seeks to maximize current income by
investing in high-yielding, low-rated, fixed-income corporate securities.
1987--VALUE LINE NEW YORK TAX EXEMPT TRUSTseeks to provide New York taxpayers
with maximum income exempt from New York State, New York City and federal
individual income taxes while avoiding undue risk to principal.
1987--VALUE LINE STRATEGIC ASSET MANAGEMENT TRUST* invests in stocks, bonds and
cash equivalents according to computer trend models developed by Value Line. The
objective is to professionally manage the optimal allocation of these
investments at all times.
1992--VALUE LINE INTERMEDIATE BOND FUND seeks high current income consistent
with low volatility of principal by investing in a diversified portfolio of
investment-grade debt securities with a dollar-weighted average portfolio
maturity of between three and ten years.
1993--VALUE LINE SMALL-CAP GROWTH FUND invests primarily in common stocks or
securities convertible into common stock, with its primary objective being
long-term growth of capital.
1993--VALUE LINE ASSET ALLOCATION FUND seeks high total investment return,
consistent with reasonable risk. The Fund invests in stocks, bonds and money
market instruments utilizing quantitative modeling to determine the correct
asset mix.
1995--VALUE LINE U.S. MULTINATIONAL COMPANY FUND'S investment objective is
maximum total return. It invests primarily in securities of U.S. companies that
have significant sales from international operations.

- ----------
* ONLY AVAILABLE THROUGH THE PURCHASE OF GUARDIAN INVESTOR, A TAX DEFERRED
VARIABLE ANNUITY, OR VALUEPLUS, A VARIABLE LIFE INSURANCE POLICY.

FOR MORE COMPLETE INFORMATION ABOUT ANY OF THE VALUE LINE FUNDS, INCLUDING
CHARGES AND EXPENSES, SEND FOR A PROSPECTUS FROM VALUE LINE SECURITIES, INC.,
220 E. 42ND STREET, NEW YORK, NEW YORK 10017-5891 OR CALL 1-800-223-0818, 24
HOURS A DAY, 7 DAYS A WEEK. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR
SEND MONEY.

18
<PAGE>
(This page intentionally left blank.)
<PAGE>
INVESTMENT ADVISER
Value Line, Inc.
220 East 42nd Street
New York, NY 10017-5891

DISTRIBUTOR
Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891

SHAREHOLDER SERVICING AGENT
State Street Bank and Trust Company
c/o NFDS
P.O. Box 419729
Kansas City, MO 64141-6729

CUSTODIAN & TRANSFER AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036

LEGAL COUNSEL
Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
----------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Summary of Fund Expenses...................... 2
Financial Highlights.......................... 2
Investment Objective and Policies............. 3
Risk Factors.................................. 10
Investment Restrictions....................... 10
Management of the Fund........................ 10
Calculation of Net Asset Value................ 11
How to Buy Shares............................. 11
Dividends, Distributions and Taxes............ 12
Performance Information....................... 13
How to Redeem Shares.......................... 13
Investor Services............................. 15
Additional Information........................ 16
Description of Value Line Financial Strength
Ratings...................................... 17
The Value Line Family of Funds................ 18
</TABLE>

- ------------------------------------------
PROSPECTUS
- -----------------

JUNE 1, 1997

Value Line
Aggressive Income
Trust
(800) 223-0818

[LOGO]
<PAGE>
VALUE LINE AGGRESSIVE INCOME TRUST

220 East 42nd Street, New York, New York 10017-5891
1-800-223-0818 or 1-800-243-2729

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

STATEMENT OF ADDITIONAL INFORMATION
JUNE 1, 1997

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

This Statement of Additional Information is not a prospectus and must be
read in conjunction with the Prospectus of Value Line Aggressive Income Trust
(the "Fund") dated June 1, 1997, a copy of which may be obtained without charge
by writing or telephoning the Fund.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Investment Objective and Policies......................................................... B-1
Investment Restrictions................................................................... B-2
Trustees and Officers..................................................................... B-4
The Adviser............................................................................... B-5
Brokerage Arrangements.................................................................... B-6
How to Buy Shares......................................................................... B-7
Suspension of Redemptions................................................................. B-7
Taxes..................................................................................... B-8
Performance Data.......................................................................... B-9
Additional Information.................................................................... B-10
Financial Statements...................................................................... B-11
</TABLE>

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

INVESTMENT OBJECTIVE AND POLICIES
(SEE ALSO "INVESTMENT OBJECTIVE AND POLICIES" IN THE FUND'S PROSPECTUS)

The Fund will not concentrate its investments in any particular industry but
reserves the right to invest up to 25% of its total assets (taken at market
value) in any one industry. The Fund intends to limit its annual portfolio
turnover so that realized short-term gains on securities held for less than
three months is less than 30% of the Fund's gross income so that the Fund will
meet one of the tests for qualification as a regulated investment company under
the Internal Revenue Code. See "Taxes."

B-1
<PAGE>
The policies set forth below under "Investment Restrictions" are, unless
otherwise indicated, fundamental policies of the Fund and may not be changed
without the affirmative vote of a majority of the outstanding voting securities
of the Fund. As used in this Statement of Additional Information and in the
Prospectus, a "majority of the outstanding voting securities of the Fund" means
the lesser of (1) the holders of more than 50% of the outstanding shares of
beneficial interest of the Fund or (2) 67% of the shares present if more than
50% of the shares are present at a meeting in person or by proxy.

INVESTMENT RESTRICTIONS

The Fund may not:

(1) Engage in short sales, except to the extent that it owns other
securities convertible into or exchangeable for an equivalent amount of such
securities. Such transactions may only occur for the purpose of protecting a
profit or in attempting to minimize a loss with respect to convertible
securities. No more than 10% of the value of the Fund's net assets taken at
market may at any one time be held as collateral for such sales.

(2) Purchase or sell any put or call options or any combination thereof,
except that the Fund may (a) purchase, hold and sell options on contracts
for the future delivery of debt securities and warrants where the grantor of
the warrants is the issuer of the underlying securities, and (b) write and
sell covered call option contracts on securities owned by the Fund. The Fund
may also purchase call options for the purpose of terminating its
outstanding obligations with respect to securities upon which covered call
option contracts have been written (i.e., "closing purchase transactions").

(3) Borrow money in excess of 10% of the value of its assets and then
only as a temporary measure to meet unusually heavy redemption requests or
for other extraordinary or emergency purposes. Securities will not be
purchased while borrowings are outstanding. No assets of the Fund may be
pledged, mortgaged or otherwise encumbered, transferred or assigned to
secure a debt except that the Fund may enter into interest rate futures
contracts as set forth in restriction 18 below.

(4) Engage in the underwriting of securities, except to the extent that
the Fund may be deemed an underwriter as to restricted securities under the
Securities Act of 1933 in selling portfolio securities.

(5) Invest in real estate, mortgages or illiquid securities of real
estate investment trusts although the Fund may purchase securities of
issuers which engage in real estate operations.

(6) Invest in commodities or commodity contracts except that it may
enter into interest rate futures contracts subject to restriction 18 below.

(7) Lend money except in connection with the purchase of debt
obligations or by investment in repurchase agreements, provided that
repurchase agreements maturing in more than seven days, when taken together
with other illiquid investments including restricted securities, do not
exceed 10% of the Fund's assets. The Fund may lend its portfolio securities
to broker-dealers and institutional investors if as a result thereof the
aggregate value of all securities loaned does not exceed 33 1/3% of the
total assets of the Fund.

(8) Invest more than 5% of the value of its total assets in the
securities of any one issuer or purchase more than 10% of the outstanding
voting securities, or any other class of securities, of any one issuer. For
purposes of this 10% restriction, all outstanding debt securities of an
issuer are

B-2
<PAGE>
considered as one class, and all preferred stock of an issuer is considered
as one class. This restriction does not apply to obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities.

(9) Purchase securities of other investment companies.

(10) Invest 25% or more of its assets in securities of issuers in any
one industry.

(11) Invest more than 5% of its total assets in securities of issuers
having a record, together with predecessors, of less than three years of
continuous operation. The restriction does not apply to any obligation
issued or guaranteed by the U.S. government, its agencies or
instrumentalities.

(12) Purchase or retain the securities of any issuer if, to the
knowledge of the Fund, those officers and directors of the Fund and of the
Adviser, who each owns more than .5% of the outstanding securities of such
issuer, together own more than 5% of such securities.

(13) Issue senior securities except evidences of indebtedness permitted
by restriction No. 3 above.

(14) Purchase securities for the purpose of exercising control over
another company.

(15) Purchase securities on margin except that it may make margin
deposits in connection with interest rate futures contracts subject to
restriction 18 below or participate on a joint or a joint and several basis
in any trading account in securities.

(16) Purchase oil, gas or other mineral type development programs or
leases, except that the Fund may invest in the securities of companies which
invest in or sponsor such programs.

(17) Invest more than 2% of the value of its total assets in warrants
(valued at the lower of cost or market), except that warrants attached to
other securities are not subject to these limitations.

(18) Enter into an interest rate futures contract if, as a result
thereof, (i) the then current aggregate futures market prices of financial
instruments required to be delivered under open futures contract sales plus
the then current aggregate purchase prices of financial instruments required
to be purchased under open futures contract purchases would exceed 30% of
the Fund's total assets (taken at market value at the time of entering into
the contract) or (ii) more than 5% of the Fund's total assets (taken at
market value at the time of entering into the contract) would be committed
to margin on such futures contracts plus premiums on options on futures
contracts.

If a percentage restriction is adhered to at the time of investment, a later
change in percentage resulting from changes in values or assets will not be
considered a violation of the restriction. For purposes of industry
classifications, the Fund follows the industry classifications in The Value Line
Investment Survey.

B-3
<PAGE>
TRUSTEES AND OFFICERS

<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH FUND PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- ----------------------------------- --------------------- ---------------------------------------------------
<S> <C> <C>
*Jean Bernhard Buttner Chairman of the Board Chairman, President and Chief Executive Officer of
Age 62 of Trustees and Value Line, Inc. (the "Adviser") and Value Line
President Publishing, Inc. Chairman of the Value Line Funds
and the Distributor.
John W. Chandler Trustee Consultant, Academic Search Consultation Service,
2801 New Mexico Ave., N.W. Inc. since 1992; Consultant, Korn/ Ferry
Washington, DC 20007 International 1990-1992. Trustee Emeritus and
Age 73 Chairman (1993-1994) of Duke University; President
Emeritus, Williams College.
*Leo R. Futia Trustee Retired Chairman and Chief Executive Officer of The
201 Park Avenue South Guardian Life Insurance Company of America and
New York, NY 10003 Director since 1970. Director (Trustee) of The
Age 77 Guardian Insurance & Annuity Company, Inc.,
Guardian Investor Services Corporation, and the
Guardian-sponsored mutual funds.
Charles E. Reed Trustee Retired. Formerly, Senior Vice President of General
3200 Park Avenue Electric Co.; Director Emeritus of People's Bank,
Bridgeport, CT 06604 Bridgeport, CT.
Age 83

Paul Craig Roberts Trustee Distinguished Fellow, Cato Institute, since 1993;
505 S. Fairfax Street formerly, William E. Simon Professor of Political
Alexandria, VA 22320 Economy, Center for Strategic and International
Age 58 Studies; Director, A. Schulman Inc. (plastics)
since 1992.

Nancy-Beth Sheerr Director Chairman, Radcliffe College Board of Trustees.
1409 Beaumont Drive
Gladwyne, PA 19035
Age 48
Christopher W. Bischof Vice President Portfolio Manager with the Adviser since 1995;
Age 45 Securities Analyst with the Adviser, 1989-1995.
Richard Cunniffe Vice President Managing Editor, The Value Line Convertibles Survey
Age 42 since 1992; Securities Analyst with the Adviser
since 1989.
David T. Henigson Vice President, Director, Vice President and Compliance Officer of
Age 39 Secretary and the Adviser. Director and Vice President of the
Treasurer Distributor.
</TABLE>

- --------------
* "Interested" Trustee as defined in the Investment Company Act of 1940 (the
"1940 Act").

B-4
<PAGE>
Unless otherwise indicated, the address for each of the above is 220 East 42nd
Street, New York, NY.

Trustees and certain officers of the Fund are also trustees/directors and
officers of other investment companies for which the Adviser acts as investment
adviser. The following table sets forth information regarding compensation of
Trustees by the Fund and by the Fund and the twelve other Value Line Funds of
which each of the Trustees is a director or trustee for the fiscal year ended
January 31, 1997. Trustees who are officers or employees of the Adviser do not
receive any compensation from the Fund or any of the Value Line Funds.

COMPENSATION TABLE
FISCAL YEAR ENDED JANUARY 31, 1997

<TABLE>
<CAPTION>
TOTAL
PENSION OR ESTIMATED COMPENSATION
RETIREMENT ANNUAL FROM FUND
AGGREGATE BENEFITS BENEFITS AND FUND
COMPENSATION ACCRUED AS PART UPON COMPLEX
NAME OF PERSON FROM FUND OF FUND EXPENSES RETIREMENT (12 FUNDS)
- ------------------------------------------------- --------------- --------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Jean B. Buttner.................................. $ -0- N/A N/A $ -0-
John W. Chandler................................. 2,991 N/A N/A 35,890
Leo R. Futia..................................... 2,741 N/A N/A 32,890
Charles E. Reed.................................. 2,991 N/A N/A 35,890
Paul Craig Roberts............................... 2,991 N/A N/A 35,890
Nancy-Beth Sheerr................................ 692 N/A N/A 8,305
</TABLE>

As of January 31, 1997, no person owned of record or, to the knowledge of
the Fund, owned beneficially, 5% or more of the outstanding shares of the Fund
other than Charles Schwab & Co., 101 Montgomery Street, San Francisco, CA 94104,
which owned of record 1,597,078 shares (approximately 15.65% of the outstanding
shares), National Financial Services Co., 200 Liberty Street, New York, NY
10281, which owned 1,176,685 shares (approximately 11.53%) and Pershing Division
of Donaldson Lufkin Jenrette SEC Corp., POB 2052, Jersey City, NJ 07303 which
owned 877,263 shares (approximately 8.60%). The Adviser owned 128,489 shares or
approximately 1.26% of the outstanding shares and certain officers and Trustees
owned an aggregate of 14,352 shares.

THE ADVISER
(SEE ALSO "MANAGEMENT OF THE FUND" IN THE FUND'S PROSPECTUS)

The Fund's investment adviser is Value Line, Inc. The investment advisory
agreement between the Fund and the Adviser dated August 10, 1988 provides for a
monthly advisory fee computed at the annual rate of 3/4 of 1% on the first $100
million of the Fund's average daily net assets and 1/2 of 1% on average daily
net assets in excess thereof. During the fiscal years ended January 31, 1995,
1996 and 1997, the Fund paid, or accrued to the Adviser, advisory fees of
$245,758, $256,103 and $424,802, respectively. In the computation of the
advisory fee, the net amount of any tender fees received by Value Line
Securities Inc. from acting as tendering broker with respect to any portfolio
securities of the Fund will be subtracted from the advisory fee.

The investment advisory agreement provides that the Adviser shall render
investment advisory and other services to the Fund including, at its expense,
all administrative services, office space and the services of all officers and
employees of the Fund. The Fund pays all other expenses incurred in its
organization and operation which are not assumed by the Adviser including taxes,
interest, brokerage

B-5
<PAGE>
commissions, insurance premiums, fees and expenses of the custodian and
shareholder servicing agent, legal and accounting fees, fees and expenses in
connection with qualification under federal and state securities laws and costs
of shareholder reports and proxy materials. The Fund has agreed that it will use
the words "Value Line" in its name only so long as Value Line, Inc. serves as
investment adviser of the Fund.

The Adviser acts as investment adviser to 15 other investment companies
constituting The Value Line Family of Funds and furnishes investment advisory
services to private and institutional accounts with combined assets in excess of
$5 billion.

Certain of the Adviser's clients may have investment objectives similiar to
the Fund and certain investments may be appropriate for the Fund and for other
clients advised by the Adviser. From time to time, a particular security may be
bought or sold for only one client or in different amounts and at different
times for more than one but less than all such clients. In addition, a
particular security may be bought for one or more clients when one or more other
clients are selling such security, or purchases or sales of the same security
may be made for two or more clients at the same time. In such event, such
transactions, to the extent practicable, will be averaged as to price and
allocated as to amount in proportion to the amount of each order. In some cases,
this procedure could have a detrimental effect on the price or amount of the
securities purchased or sold by the Fund. In other cases, however, it is
believed that the ability of the Fund to participate, to the extent permitted by
law, in volume transactions will produce better results for the Fund.

The Fund does not purchase or sell a security based solely on information
contained in The Value Line Investment Survey or in one of the other Value Line
services prior to the publication date of the service when the information
therein is available to the subscribers of the service. The Adviser and/or its
affiliates, officers, directors and employees may from time to time own
securities which are also held in the portfolio of the Fund. The Adviser has
imposed rules upon itself and such persons requiring monthly reports of security
transactions for their respective accounts and restricting trading in various
types of securities in order to avoid possible conflicts of interest. The
Adviser may from time to time, directly or through affiliates, enter into
agreements to furnish, for compensation, special research or financial services
to companies, including services in connection with acquisitions, mergers or
financings. In the event that such agreements are in effect with respect to
issuers of securities held in the portfolio of the Fund, specific reference to
such agreements will be made in the "Schedule of Investments" in shareholder
reports of the Fund. As of the date of this Statement of Additional Information,
no such agreements exist.

BROKERAGE ARRANGEMENTS
(SEE ALSO "MANAGEMENT OF THE FUND" IN THE FUND'S PROSPECTUS)

Orders for the purchase and sale of portfolio securities are placed with
brokers and dealers who, in the judgment of the Adviser, are able to execute
them as expeditiously as possible and at the best obtainable price. Purchases
and sales of securities which are not listed or traded on a securities exchange
will ordinarily be executed with primary market makers acting as principal,
except when it is determined that better prices and executions may otherwise be
obtained. The Adviser is also authorized to place purchase or sale orders with
brokers or dealers who may charge a commission in excess of that charged by
other brokers or dealers if the amount of the commission charged is reasonable
in relation to the value of the brokerage and research services provided. Such
allocation will be in such amounts and in such proportions as the Adviser may
determine. Orders may also be placed with brokers or dealers who sell shares of
the Fund or other funds for which the Adviser acts as investment adviser, but
this fact, or the

B-6
<PAGE>

volume of such sales, is not a consideration in their selection. During the
fiscal years ended January 31, 1995 and 1996, all of the Fund's transactions
were at net prices and there were no brokerage commissions paid by the Fund;
during fiscal 1997, the Fund paid brokerage commissions of $3,000.

The Trustees have adopted procedures incorporating the standards of Rule
17e-1 under the 1940 Act which requires that brokerage commissions paid to any
"affiliated person" be "reasonable and fair" compared to the commissions paid to
other brokers in connection with comparable transactions.

PORTFOLIO TURNOVER. The Fund's annual portfolio turnover rate may exceed
100%. A portfolio turnover rate of 100% would occur if all of the Fund's
portfolio securities were replaced in a period of one year. Although the Fund
does not intend to engage in short-term trading, it may sell portfolio
securities without regard to the length of time that they have been held in
order to take advantage of new investment opportunities or yield differentials,
or because the Fund desires to preserve gains or limit losses due to changing
economic conditions. High portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs which are borne by the Fund.
The Fund's portfolio turnover for recent fiscal years is set forth under
"Financial Highlights" in the Fund's Prospectus.

HOW TO BUY SHARES
(SEE ALSO "CALCULATION OF NET ASSET VALUE", "HOW TO BUY SHARES" AND
"INVESTOR SERVICES" IN THE FUND'S PROSPECTUS)

Minimum orders are $1,000 for an initial purchase and $250 for each
subsequent purchase. The Fund reserves the right to reduce or waive the minimum
purchase requirements in certain cases such as pursuant to payroll deduction
plans, etc., where subsequent and continuing purchases are contemplated.

The Fund has a distribution agreement with Value Line Securities, Inc.,
pursuant to which Value Line Securities, Inc. acts as principal underwriter and
distributor of the Fund for the sale and distribution of its shares. For its
services under the agreement, Value Line Securities, Inc. is not entitled to
receive any compensation. Value Line Securities, Inc. also serves as distributor
to the other Value Line funds.

AUTOMATIC PURCHASES. The Fund offers a free service to its shareholders,
Valu-Matic, through which monthly investments of $25 or more may be made
automatically into the shareholder's Fund account. The required form to enroll
in this program is available upon request from the Distributor.

RETIREMENT PLANS. Shares of the Fund may be purchased as the investment
medium for various tax-sheltered retirement plans. Upon request, Value Line
Securities, Inc. will provide information regarding eligibility and permissible
contributions. Because a retirement plan is designed to provide benefits in
future years, it is important that the investment objectives of the Fund be
consistent with the participant's retirement objectives. Premature withdrawals
from a retirement plan may result in adverse tax consequences. For more complete
information, contact Value Line Securities at 1-800-223-0818 during New York
business hours.

SUSPENSION OF REDEMPTIONS

The right of redemption may be suspended, or the date of payment postponed
beyond the normal seven-day period by the Fund under the following conditions
authorized by the 1940 Act: (1) for any period (a) during which the New York
Stock Exchange is closed, other than customary weekend and holiday closing, or
(b) during which trading on the New York Stock Exchange is restricted; (2) for
any

B-7
<PAGE>
period during which an emergency exists as a result of which (a) disposal by the
Fund of securities owned by it is not reasonably practical, or (b) it is not
reasonably practical for the Fund to determine the fair value of its net assets;
(3) for such other periods as the Securities and Exchange Commission may by
order permit for the protection of the Fund's shareholders.

TAXES
(SEE "DIVIDENDS, DISTRIBUTIONS AND TAXES" IN THE FUND'S PROSPECTUS)

The Fund intends to continue to qualify as a regulated investment company
under the Internal Revenue Code (the "Code"). The Fund so qualified during the
Fund's last fiscal year. By so qualifying, the Fund is not subject to federal
income tax on its net investment income or net realized capital gains which are
distributed to shareholders (whether or not reinvested in Fund shares).

Distributions of investment income and of the excess of net short-term
capital gain over net long-term capital loss are taxable to shareholders as
ordinary income. It is expected that only a small portion, if any, of such
distributions will be eligible for the dividend-received deduction for corporate
shareholders.

Distributions of the excess of net long-term capital gain over net
short-term capital loss (net capital gains) are taxable to shareholders as
long-term capital gain, regardless of the length of time the shares of the Fund
have been held by such shareholders and regardless of whether the distribution
is received in cash or in additional shares of the Fund. The computation of net
capital gains takes into account any capital loss carryforward of the Fund. At
January 31, 1997, the Fund had an accumulated net capital loss carryforward for
federal income tax purposes of approximately $8,867,000, of which $2,442,000
will expire in 1998, $3,439,000 in 1999, $600,000 in 2000 and $2,386,000 in
2003. During the year ended January 31, 1997, the Fund utilized prior years'
carryover losses of approximately $4,133,000 to offset net realized gains. Any
net capital losses incurred after October 31, within the Fund's tax year, if so
elected by the Fund, are deemed to arise on the first day of the Fund's next
taxable year. To the extent future capital gains are offset by such capital
losses, the Fund does not anticipate distributing any such gains to its
shareholders.

The Code requires each regulated investment company to pay a nondeductible
4% excise tax to the extent the company does not distribute, during each
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. The Fund anticipates
that it will make sufficient timely distributions to avoid imposition of the
excise tax.

A distribution by the Fund reduces the Fund's net asset value per share.
Such a distribution is taxable to the shareholder as ordinary income or capital
gain as described above, even though, from an investment standpoint, it may
constitute a return of capital. In particular, investors should be careful to
consider the tax implications of buying shares just prior to a distribution. The
price of shares purchased at that time includes the amount of the forthcoming
distribution. Those purchasing just prior to a distribution will then receive a
return of capital upon the distribution which nevertheless is taxable to them.
All distributions, whether received in cash or reinvested in Fund shares, must
be reported by each shareholder on his or her federal income tax return. Under
the Code, dividends declared by the Fund in October, November and December of
any calendar year, and payable to shareholders of record in such a month, shall
be deemed to have been received by the shareholders on December 31 of such
calendar year if such dividend is actually paid in January of the following
calendar year.

B-8
<PAGE>
A shareholder may realize a capital gain or capital loss on the sale or
redemption of shares of the Fund. The tax consequences of a sale or redemption
depend upon several factors, including the shareholder's tax basis in the shares
sold or redeemed and the length of time the shares have been held. Basis in the
shares may be the actual cost of those shares (net asset value of Fund shares on
purchase or reinvestment date), or under special rules, an average cost. Under
certain circumstances, a loss on the sale or redemption of shares held for six
months or less may be treated as a long-term capital loss to the extent that the
Fund has distributed long-term capital gain dividends on such shares. Moreover,
a loss on sale or redemption of Fund shares will be disallowed to the extent the
shareholder purchases other shares of the Fund within 30 days before or after
the date the shares are sold or redeemed.

For shareholders who fail to furnish to the Fund their social security or
taxpayer identification numbers and certain related information, or who fail to
certify that they are not subject to backup withholding, dividends,
distributions or capital gains and redemption proceeds paid by the Fund will be
subject to a 31% federal income tax withholding requirement. If the withholding
provisions are applicable, any such dividends or capital gains distributions to
these shareholders, whether taken in cash or reinvested in additional shares,
and any redemption proceeds will be reduced by the amounts required to be
withheld.

The foregoing discussion relates solely to U.S. federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens or residents, domestic
corporations and partnerships, and certain trusts and estates) and is not
intended to be a complete discussion of all federal tax consequences.
Shareholders are advised to consult with their tax advisers concerning the
application of federal, state and local tax laws to an investment in the Fund.

PERFORMANCE DATA

From time to time, the Fund may state its total return in advertisements and
investor communications. Total return may be stated for any relevant period as
specified in the advertisement or communication. Any statements of total return
or other performance data on the Fund will be accompanied by information on the
Fund's average annual total return over the most recent four calendar quarters
and the period from the Fund's inception of operations. The Fund may also
advertise aggregate annual total return information over different periods of
time.

The Fund's average annual total return is determined by reference to a
hypothetical $1,000 investment that includes capital appreciation and
depreciation for the stated period, according to the following formula:

n-----
T = \/ERV/P -1

<TABLE>
<S> <C> <C> <C>
Where: P = a hypothetical initial purchase order of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000 purchase at the end of the
period.
</TABLE>

As stated in the Prospectus, the Fund may also quote its current yield in
advertisements and investor communications.

B-9
<PAGE>
The yield computation is determined by dividing the net investment income
per share earned during the period by the maximum offering price per share on
the last day of the period and annualizing the resulting figure, according to
the following formula:

Yield = 2 [(a - b/cd + 1)to the sixth power -1]

<TABLE>
<S> <C> <C> <C>
Where: a = dividends and interest earned during the period (calculated as required by the
Securities and Exchange Commssion);
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends;
d = the maximum offering price per share on the last day of the period.
</TABLE>

The above formula will be used in calculating quotations of yield, based on
specified 30-day periods identified in advertising by the Fund.

The Fund may also, from time to time, include a reference to its current
quarterly or annual distribution rate in investor communications and sales
literature preceded or accompanied by a Prospectus, reflecting the amounts
actually distributed to shareholders which could include capital gains and other
items of income not reflected in the Fund's yield, as well as interest and
dividend income received by the Fund and distributed to shareholders (which is
reflected in the Fund's yield).

All calculations of the Fund's distribution rate are based on the
distributions per share which are declared but not necessarily paid, during the
fiscal year. The distribution rate is determined by dividing the distributions
declared during the period by the maximum offering price per share on the last
day of the period and annualizing the resulting figure. In calculating its
distribution rate, the Fund has used the same assumptions that apply to its
calculation of yield. The distribution rate does not reflect capital
appreciation or depreciation in the price of the Fund's shares and should not be
considered to be a complete indicator of the return to the investor on his
investment.

The Fund's current yield, distribution rate and total return may be compared
to relevant indices, including U.S. domestic and international taxable bond
indices and data from Lipper Analytical Services, Inc., or Standard & Poor's
Indices. From time to time, evaluations of the Fund's performance by independent
sources may also be used in advertisements and in information furnished to
present or prospective investors in the Fund.

ADDITIONAL INFORMATION

EXPERTS

The financial statements of the Fund and the financial highlights included
in the Fund's Annual Report to Shareholders and incorporated by reference in
this Statement of Additional Information have been so incorporated by reference
in reliance on the report of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in accounting and auditing.

CUSTODIAN

The Fund employs State Street Bank and Trust Company, Boston, MA as
custodian for the Fund. The custodian's responsibilities include safeguarding
and controlling the Fund's cash and securities, handling the receipt and
delivery of securities and collecting interest and dividends on the Fund's
investments. The custodian does not determine the investment policies of the
Fund or decide which securities the Fund will buy or sell.

B-10
<PAGE>
FINANCIAL STATEMENTS

The Fund's financial statements for the year ended January 31, 1997,
including the financial highlights for each of the five fiscal years in the
period ended January 31, 1997 appearing in the 1997 Annual Report to
Shareholders and the report thereon of Price Waterhouse LLP, independent
accountants, appearing therein, are incorporated by reference in this Statement
of Additional Information.

The Fund's 1997 Annual Report to Shareholders is enclosed with this
Statement of Additional Information.

B-11
<PAGE>
VALUE LINE AGGRESSIVE INCOME TRUST
PART C
OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

a. Financial Statements
Included in Part A of this Registration Statement:
Financial Highlights for each of the ten years in the period ended
January 31, 1997.

Incorporated by reference in Part B of this Registration Statement:*
Schedule of Investments at January 31, 1997
Statement of Assets and Liabilities at January 31, 1997
Statement of Operations for the year ended January 31, 1997
Statements of Changes in Net Assets for the years ended
January 31, 1997 and January 31, 1996
Financial Highlights for each of the five years in the period ended
January 31, 1997
Notes to Financial Statements
Report of Independent Accountants

Statements, schedules and historical information other than those listed
above have been omitted since they are either not applicable or are not
required.
- ---------

* Incorporated by reference from the Annual Report to Shareholders for the
year ended January 31, 1997.

b. Exhibits
16. Calculation of Performance Data--Exhibit 1

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

None

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

As of January 31, 1997, there were 2,791 record holders of the Registrant's
shares of beneficial interest, $.01 par value.

ITEM 27. INDEMNIFICATION.

Incorporated by reference from Post-Effective Amendment No. 2 (filed with
the Commission May 21, 1987).

C-1
<PAGE>
ITEM 28. BUSINESS OR OTHER CONNECTIONS OF INVESTMENT ADVISER.

Value Line, Inc., Registrant's investment adviser, acts as investment
adviser for a number of individuals, trusts, corporations and institutions, in
addition to the registered investment companies in the Value Line Family of
Funds listed in Item 29.

<TABLE>
<CAPTION>
POSITION WITH
NAME THE ADVISER OTHER EMPLOYMENT
- ---------------------------- ---------------------------------- ------------------------------------------------
<S> <C> <C>
Jean Bernhard Buttner Chairman of the Board, Chairman of the Board and Chief Executive
President and Chief Executive Officer of Arnold Bernhard & Co., Inc. and Value
Officer Line Publishing, Inc. and Chairman of the Value
Line Funds and the Distributor
Samuel Eisenstadt Senior Vice President and Director

David T. Henigson Vice President, Treasurer and Vice President and a Director of Arnold Bernhard
Director & Co., Inc. and the Distributor

Howard A. Brecher Vice President, Secretary and Secretary and Treasurer of Arnold Bernhard &
Director Co., Inc.

Harold Bernard, Jr. Director Administrative Law Judge

William S. Kanaga Director Retired Chairman of Arthur Young (now Ernst &
Young)

W. Scott Thomas Director Partner, Brobeck, Phleger & Harrison, attorneys.
</TABLE>

C-2
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS.

(a) Value Line Securities, Inc., acts as principal underwriter for the
following Value Line funds, including the Registrant: The Value Line
Fund, Inc.; The Value Line Income Fund, Inc.; The Value Line Special
Situations Fund, Inc.; Value Line Leveraged Growth Investors, Inc.; The
Value Line Cash Fund, Inc.; Value Line U.S. Government Securities Fund,
Inc.; Value Line Centurion Fund, Inc.; The Value Line Tax Exempt Fund,
Inc.; Value Line Convertible Fund, Inc.; Value Line Aggressive Income
Trust; Value Line New York Tax Exempt Trust; Value Line Strategic Asset
Management Trust; Value Line Intermediate Bond Fund, Inc.; Value Line
Small-Cap Growth Fund, Inc.; Value Line Asset Allocation Fund, Inc.;
Value LIne U.S. Multinational Company Fund, Inc.

(b)

<TABLE>
<CAPTION>
(2)
POSITION AND (3)
(1) OFFICES POSITION AND
NAME AND PRINCIPAL WITH VALUE LINE OFFICES WITH
BUSINESS ADDRESS SECURITIES, INC. REGISTRANT
- -------------------------- ------------------- --------------------------
<S> <C> <C>
Jean Bernhard Buttner Chairman of the Chairman of the Board,
Board President and Chief
Executive Officer

David T. Henigson Vice President, Vice President, Secretary
Secretary, and Treasurer
Treasurer and
Director

Stephen LaRosa Asst. Vice Asst. Treasurer
President Asst. Secretary
</TABLE>

The business address of each of the officers and directors is 220 East
42nd Street, New York, NY 10017-5891.

C-3
<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

Certain accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by the Registrant's investment adviser, Value Line, Inc., 220 East
42nd Street, New York, New York 10017-5891; the Registrant's transfer agent,
State Street Bank and Trust Company, c/o NFDS, P.O. Box 419729, Kansas City, MO
64141-6729; and the Registant's custodian, State Street Bank and Trust Company,
225 Franklin Street, Boston, MA 02110.

ITEM 31. MANAGEMENT SERVICES.

None.

ITEM 32. UNDERTAKINGS.

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.

--------------
CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 12 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated March 26, 1997, relating to the financial
statements and financial highlights appearing in the January 31, 1997 Annual
Report to Shareholders of Value Line Aggressive Income Trust, which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the headings "Additional Information" and "Financial Statements" in
the Statement of Additional Information.

PRICE WATERHOUSE LLP

1177 Avenue of the Americas
New York, New York
May 20, 1997

C-4
<PAGE>
SIGNATURES

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

VALUE LINE AGGRESSIVE INCOME TRUST
By: /s/ David T. Henigson
..................................
DAVID T. HENIGSON
Vice President

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

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------- ------------------------------------------- ------------------------

<C> <S> <C>
* JEAN B. BUTTNER Chairman of the Trustees, President and May 20, 1997
(JEAN B. BUTTNER) Chief Executive Officer

* JOHN W. CHANDLER Trustee May 20, 1997
(JOHN W. CHANDLER)

* LEO R. FUTIA Trustee May 20, 1997
(LEO R. FUTIA)

*CHARLES E. REED Trustee May 20, 1997
(CHARLES E. REED)

* PAUL CRAIG ROBERTS Trustee May 20, 1997
(PAUL CRAIG ROBERTS)

* NANCY-BETH SHEERR Trustee May 20, 1997
(NANCY-BETH SHEERR)

/s/ DAVID T. HENIGSON Secretary and Treasurer; Principal May 20, 1997
.......................................... Financial and Accounting Officer
(DAVID T. HENIGSON)
</TABLE>

* By /s/ David T. Henigson
..................................
(DAVID T. HENIGSON,
Attorney-in-fact)

C-5

<PAGE>

VALUE LINE AGGRESSIVE INCOME TRUST
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATION

EXHIBIT 16

Year(s) Ended 01/31/97: 1 year 5 years 10 years
------------ ----------- ------------

Initial Investment: 1,000 1,000 1,000
Balance at End of Period: 1,181 1,820 2,352
Change: 181 820 1,352

Percentage Change: 18.12% 81.99% 135.21%

Average Annual Total Return: 18.12% 12.72% 8.93%

<PAGE>
<ARTICLE> 6
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> JAN-31-1997
<INVESTMENTS-AT-COST> 73,778
<INVESTMENTS-AT-VALUE> 75,724
<RECEIVABLES> 10,582
<ASSETS-OTHER> 1,018
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 87,324
<PAYABLE-FOR-SECURITIES> 3,181
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 378
<TOTAL-LIABILITIES> 3,559
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 90,824
<SHARES-COMMON-STOCK> 10,204
<SHARES-COMMON-PRIOR> 5,465
<ACCUMULATED-NII-CURRENT> 16
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (9,021)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,946
<NET-ASSETS> 83,765
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,900
<OTHER-INCOME> 124
<EXPENSES-NET> 612
<NET-INVESTMENT-INCOME> 5,412
<REALIZED-GAINS-CURRENT> 3,979
<APPREC-INCREASE-CURRENT> 334
<NET-CHANGE-FROM-OPS> 9,725
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,396
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,168
<NUMBER-OF-SHARES-REDEEMED> 8,887
<SHARES-REINVESTED> 458
<NET-CHANGE-IN-ASSETS> 41,989
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 425
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 612
<AVERAGE-NET-ASSETS> 57,117
<PER-SHARE-NAV-BEGIN> 7.64
<PER-SHARE-NII> .75
<PER-SHARE-GAIN-APPREC> .57
<PER-SHARE-DIVIDEND> .75
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.21
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>