STRONG GOVERNMENT SECURITIES FUND INC, 485APOS, 1995-02-24

STRONG GOVERNMENT SECURITIES FUND INC
485APOS, 1995-02-24

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<PAGE> 1

As filed with the Securities and Exchange Commission on or about
February 24, 1995

Securities Act Registration No. 33-7984
Investment Company Act Registration No. 811-4798

SECURITIES AND EXCHANGE COMMISSION
Washington D.C.

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

Pre-Effective Amendment No. ______ [ ]

Post-Effective Amendment No. 9 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

Amendment No. 10 [X]

(Check appropriate box or boxes)

STRONG GOVERNMENT SECURITIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)

100 HERITAGE RESERVE
MENOMONEE FALLS, WISCONSIN 53051
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (414) 359-3400

THOMAS P. LEMKE
STRONG CAPITAL MANAGEMENT, INC.
100 HERITAGE RESERVE
MENOMONEE FALLS, WISCONSIN 53051
(Name and Address of Agent for Service)

Copies to
SCOTT A. MOEHRKE
GODFREY & KAHN, S.C.
780 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202

Registrant has registered an indefinite amount of securities pursuant
to Rule 24f-2 under the Securities Act of 1933; the Registrant's Rule 24f-2
Notice for the fiscal year ended December 31, 1994 was filed on or about
January 27, 1995.

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

[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[X] on May 1, 1995 pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

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

<PAGE> 2

STRONG GOVERNMENT SECURITIES FUND, INC.

CROSS REFERENCE SHEET

(Pursuant to Rule 481 showing the location in the Prospectus and the
Statement of Additional Information of the responses to the Items of Parts A
and B of Form N-1A.)

<TABLE>
<CAPTION>
CAPTION OR SUBHEADING IN PROSPECTUS OR
ITEM NO. ON FORM N-1A STATEMENT OF ADDITIONAL INFORMATION
--------------------- --------------------------------------
<S> <C> <C>
PART A - INFORMATION REQUIRED IN PROSPECTUS

1. Cover Page Cover Page

2. Synopsis Expenses; Highlights

3. Condensed Financial Information Financial Highlights

4. General Description of Registrant Strong Income Funds; Investment Objectives and
Policies; Fundamentals of Fixed Income Investing;
Implementation of Policies and Risks; About the
Funds - Organization

5. Management of the Fund About the Funds - Management; Financial Highlights

5A. Management's Discussion of Fund Performance *

6. Capital Stock and Other Securities About the Funds - Organization, - Distributions and
Taxes; Shareholders Manual - Shareholder Services

7. Purchase of Securities Being Offered Shareholder Manual - How to Buy Shares, -
Determining Your Share Price, - Shareholder
Services

8. Redemption or Repurchase Shareholder Manual - How to Sell Shares, -
Determining Your Share Price, - Shareholder
Services

9. Pending Legal Proceedings Inapplicable
<CAPTION>
PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL
INFORMATION

10. Cover Page Cover page

11. Table of Contents Table of Contents

12. General Information and History **

13. Investment Objectives and Policies Investment Restrictions; Investment Policies and
Techniques

14. Management of the Fund Directors and Officers of the Fund

15. Control Persons and Principal Holders of Securities Principal Shareholder; Directors and Officers of
the Fund; Investment Advisor and Distributor

16. Investment Advisory and Other Services Investment Advisor and Distributor; About the Funds
- Management (in Prospectus); Custodian; Transfer
Agent and Dividend-Disbursing Agent; Independent
Accountants
</TABLE>

<PAGE> 3

18. Capital Stock and Other Securities Included in Prospectus under the heading About the
Funds - Organization and in the Statement of
Additional Information under the heading
Shareholder Meetings

19. Purchase, Redemption and Pricing of Securities Being Included in Prospectus under the headings:
Offered Shareholder Manual - How to Buy Shares, -
Determining Your Share Price, - How to Sell Shares,
- Shareholder Services; and in the Statement of
Additional information under the headings:
Shareholder Services; Investment Advisor and
Distributor; and Determination of Net Asset Value

20. Tax Status Included in Prospectus under the heading About the
Funds - Distributions and Taxes; and in the
Statement of Additional Information under the
heading Taxes

21. Underwriters Investment Advisor and Distributor

22. Calculation of Performance Data Performance Information

23. Financial Statements Financial Statements
</TABLE>

* Complete answer to Item is contained in Registrant's Annual Report.
** Complete answer to Item is contained in Registrant's Prospectus.

<PAGE> 4

<PAGE> 1

Dated May 1, 1995

STRONG INCOME FUNDS STRONG FUNDS

STRONG U.S. TREASURY MONEY FUND, INC. P.O. Box 2936
STRONG MONEY MARKET FUND, INC. Milwaukee, Wisconsin 53201
STRONG ADVANTAGE FUND, INC. Telephone: (414) 359-1400
STRONG SHORT-TERM BOND FUND, INC. Toll-Free: (800) 368-3863
STRONG GOVERNMENT SECURITIES FUND, INC. Device for the Hearing-Impaired:
STRONG CORPORATE BOND FUND, INC. (800) 999-2780

The Strong Family of Funds ("Strong Funds") is a family of twenty-four
separately incorporated, diversified and non-diversified, open-end management
investment companies, commonly called mutual funds. All of the Strong Funds are
no-load funds. There are no sales charges, redemption fees, or 12b-1 fees. The
Strong Funds include growth funds, growth and income funds, income funds,
municipal income funds, and money market funds. Six of these funds, the "Strong
Income Funds," are described in this Prospectus.

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.

This Prospectus contains information you should consider before investing.
Please read it carefully and keep it for future reference. A Statement of
Additional Information for the Funds dated May 1, 1995, which contains further
information and is incorporated by reference into this Prospectus, has been
filed with the Securities and Exchange Commission ("SEC"). This Statement,
which may be revised from time to time, is available without charge upon
request to the above-noted address or telephone number.

AN INVESTMENT IN THE STRONG U.S. TREASURY MONEY FUND OR THE STRONG MONEY MARKET
FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO
ASSURANCE THAT EITHER FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE.

<PAGE> 2

STRONG INCOME FUNDS

The Strong U.S. Treasury Money Fund, Inc., Strong Money Market Fund, Inc.,
Strong Advantage Fund, Inc., Strong Short-Term Bond Fund, Inc., Strong
Government Securities Fund, Inc., and Strong Corporate Bond Fund, Inc.
(collectively the "Funds" or the "Income Funds" and individually sometimes
referred to as a "Fund") are separately incorporated, diversified, open-end
management investment companies.

STRONG U.S. TREASURY MONEY FUND (the "Treasury Money Fund") seeks current
income, a stable share price, and daily liquidity. The Treasury Money Fund
invests only in securities issued directly by the U.S. government.

STRONG MONEY MARKET FUND (the "Money Market Fund") seeks current income, a
stable share price, and daily liquidity. The Fund invests in corporate, bank,
and government instruments that present minimal credit risk.

STRONG ADVANTAGE FUND (the "Advantage Fund") seeks current income with a very
low degree of share-price fluctuation. The Fund invests primarily in ultra
short-term, investment-grade bonds, and its average effective maturity will
normally be one year or less.

STRONG SHORT-TERM BOND FUND (the "Short-Term Bond Fund") seeks total return by
investing for a high level of current income with a low degree of share-price
fluctuation. The Fund invests primarily in short- and intermediate-term,
investment grade bonds, and its average portfolio maturity will normally be
between one and three years.

STRONG GOVERNMENT SECURITIES FUND (the "Government Securities Fund") seeks
total return by investing for a high level of current income with a moderate
degree of share-price fluctuation. The Fund normally invests at least 80% of
its assets in U.S. government securities.

STRONG CORPORATE BOND FUND (the "Corporate Bond Fund") (formerly known as the
Strong Income Fund) seeks total return by investing for a high level of current
income with a moderate degree of share-price fluctuation. The Fund invests
primarily in investment-grade corporate bonds.

<PAGE> 3

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE

<S> <C>
EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0

FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . 0

HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . 0

Comparing the Funds . . . . . . . . . . . . . . . . . . 0
Strong U.S. Treasury Money Fund . . . . . . . . . . . . 0
Strong Money Market Fund . . . . . . . . . . . . . . . . 0
Strong Advantage Fund . . . . . . . . . . . . . . . . . 0
Strong Short-Term Bond Fund . . . . . . . . . . . . . . 0
Strong Government Securities Fund . . . . . . . . . . . 0
Strong Corporate Bond Fund . . . . . . . . . . . . . . . 0

FUNDAMENTALS OF FIXED-INCOME INVESTING . . . . . . . . . . . . . . . . . 0

IMPLEMENTATION OF POLICIES AND RISKS . . . . . . . . . . . . . . . . . . 0

ABOUT THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0

Transfer and Dividend-Disbursing Agent . . . . . . . . . . . . . . . 0
Distributor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . . 0
Performance Information . . . . . . . . . . . . . . . . . . . . . . 0

SHAREHOLDER MANUAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 0

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
</TABLE>

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

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and the Statement
of Additional Information, and if given or made, such information or
representations may not be relied upon as having been authorized by the Strong
Income Funds. This Prospectus does not constitute an offer to sell securities
in any state or jurisdiction in which such offering may not lawfully be made.

<PAGE> 4

EXPENSES
The following information is provided in order to help you understand the
various costs and expenses that you, as an investor in the Funds, will bear
directly or indirectly.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases . . . . . . . . . . . . . . . . NONE
Sales Load Imposed on Reinvested Dividends . . . . . . . . . . NONE
Deferred Sales Load . . . . . . . . . . . . . . . . . . . . . NONE
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . NONE
Exchange Fees . . . . . . . . . . . . . . . . . . . . . . . . . NONE
</TABLE>

There are certain charges associated with retirement accounts and with certain
services offered by the Funds. Purchases and redemptions may also be made
through broker-dealers or others who may charge a commission or other
transaction fee for their services.

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

<TABLE>
<CAPTION>
TOTAL
MANAGEMENT OTHER 12B-1 OPERATING
FEES EXPENSES FEES EXPENSES
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Treasury Money Fund .40% % NONE %
Money Market Fund .50 NONE *
Advantage Fund .60 NONE
Short-Term Bond Fund .625 NONE
Government Securities Fund .60 NONE
Corporate Bond Fund .625 ** NONE
- --------------------------------------------------------------------------------------------------------
</TABLE>

* The Advisor has agreed to voluntarily waive its management fee and absorb the
Money Market Fund's operating expenses from December 9, 1994 through June 1,
1995. With these waivers and absorptions, the Fund's Total Operating Expenses
for that period will be .00%.

** The Fund may use brokerage commission credits to pay certain expenses
that otherwise would require cash payment by the Fund. In all cases, such
credits have been immaterial in amount. The Advisor believes that this
practice has not resulted in any increase in the level of commissions paid by
the Fund.

From time to time, the Funds' investment advisor, Strong Capital Management,
Inc. (formerly known as Strong/Corneliuson Capital Management, Inc.) (the
"Advisor"), may voluntarily waive its management fee and/or absorb certain
expenses for a Fund. The expenses specified in the table above for the
_____________ and ______________ Funds are based on actual expenses incurred
during the year ended December 31, 1994. During 1994, the Advisor waived a
portion of its management fee for the ___________ and _____________________
Funds and waived a portion of its management fee and absorbed certain expenses
for the ______________ Fund. (See "Financial Highlights.") Therefore, the
expenses specified in the table above for these Funds have been restated for
the fiscal year ended December 31, 1994 to include such management fees and/or
expenses. The actual total operating expenses incurred for the fiscal year
ended December 31, 1994 for the ______________, ___________, _______________,
and _____________________ Funds after waivers and absorptions were ____%,
____%, ____%, and ____%, respectively. For additional information concerning
fees and expenses, see "About the Funds -- Management."

EXAMPLE

I-4
<PAGE> 5

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:

<TABLE>
<CAPTION>
PERIOD (IN YEARS)
- ---------------------------------------------------------------------------
1 3 5 10
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Treasury Money Fund $ $ $ $
Money Market Fund
Advantage Fund
Short-Term Bond Fund
Government Securities Fund
Corporate Fund
- ---------------------------------------------------------------------------
</TABLE>

The Example is based on the "Total Operating Expenses" before any waivers and
absorptions, as described above. PLEASE REMEMBER THAT THE EXAMPLE SHOULD NOT BE
CONSIDERED AS REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND THAT ACTUAL
EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN. The assumption in the Example
of a 5% annual return is required by regulations of the SEC applicable to all
mutual funds. The assumed 5% annual return is not a prediction of, and does not
represent, the projected or actual performance of a Fund's shares.

FINANCIAL HIGHLIGHTS

The following Financial Highlights for each of the Strong Income Funds has been
audited by Coopers & Lybrand L.L.P., independent certified public accountants.
Their report for the fiscal year ended December 31, 1994 is included in the
Annual Report of the Income Funds that is contained in the Funds' Statement of
Additional Information. The Financial Highlights for the Funds should be read
in conjunction with the Financial Statements and related notes included in the
Funds' Annual Report. Additional information about each Fund's performance is
contained in the Funds' Annual Report, which may be obtained without charge by
calling or writing Strong Funds.

I-5
<PAGE> 6

STRONG U.S. TREASURY MONEY FUND

1994 1993 1992 1991(1)
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.03 0.04 0.06
Dividends from Net Investment Income (0.03) (0.04) (0.06)
---------- ---------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ $ 1.00 1.00 $ 1.00
========== ========== ========= =========

Total Return +2.9% +3.7% +5.8%
Net Assets, End of Period (In Thousands) $ $ 41,851 $ 29,390 $ 20,431
Ratio of Expenses to Average Net Assets(2) 0.2% 0.3% 0.3%
Ratio of Net Investment Income to
Average Net Assets 2.9% 3.6% 5.4%

</TABLE>

<PAGE> 7

STRONG MONEY MARKET FUND

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985(1)
---- ---- ---- ---- ---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
Net Investment Income 0.03 0.03 0.06 0.08 0.09 0.07 0.06 0.06 0.02
Dividends from Net
Investment Income (0.03) (0.03) (0.06) (0.08) (0.09) (0.07) (0.06) (0.06) (0.02)
------ -------- -------- -------- -------- -------- -------- -------- ------ -----
NET ASSET VALUE,
END OF PERIOD $ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
====== ======== ======== ======== ======== ======== ======== ======== ====== =====

Total Return +2.9% +3.7% +6.1% +8.1% +9.2% +7.5% +6.4% +6.5% +1.5%*
Net Assets, End of Period
(In Thousands) $329,988 $390,003 $533,869 $768,870 $829,332 $464,459 $194,953 $26,363 $ 944
Ratio of Expenses to Average
Net Assets(3) 0.7% 0.8% 0.7% 0.7% 0.7% 1.1% 0.8% 0.8% 0.4%**

Ratio of Net Investment Income
to Average Net Assets 2.9% 3.7% 6.0% 7.8% 8.8% 7.4% 6.6% 5.8% 7.8%**
</TABLE>

STRONG ADVANTAGE FUND

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988(1)
---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ $ 10.01 $ 9.90 $ 9.67 $ 9.87 $ 10.00 $ 9.99
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.59 0.70 0.76 0.83 1.03 0.09
Net Realized and Unrealized
Gains (Losses) on Investments 0.18 0.11 0.23 (0.20) (0.13) 0.01
-------- -------- -------- -------- -------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS 0.77 0.81 0.99 0.63 0.90 0.10
LESS DISTRIBUTIONS
Dividends from Net Invesement
Income (0.59) (0.70) (0.76) (0.83) (1.03) (0.09)
-------- -------- -------- -------- -------- -------- -------
TOTAL DISTRIBUTIONS (0.59) (0.70) (0.76) (0.83) (1.03) (0.09)
-------- -------- -------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ $ 10.19 $ 10.01 $ 9.90 $ 9.67 $ 9.87 $10.00
======== ======== ======== ======== ======== ======== =======

Total Return +7.9% +8.4% +10.6% +6.6% +9.4% +1.0%*
Net Assets, End of Period
(In Thousands) $ $415,465 $272,348 $143,215 $119,189 $142,807 $7,544
Ratio of Expenses to Average
Net Assets(4) 0.9% 1.0% 1.2% 1.2% 1.1% 1.1%**
Ratio of Net Investment Income
to Average Net Assets 5.8% 7.0% 7.8% 8.5% 10.0% 11.1%**
Portfolio Turnover Rate 304.8% 316.1% 503.0% 274.1% 211.3% 231.8%**

</TABLE>

<PAGE> 8

STRONG SHORT-TERM BOND FUND

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987(1)
---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ $ 9.99 $ 10.12 $ 9.53 $ 9.86 $ 10.09 $ 10.03 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.66 0.76 0.75 0.81 0.99 0.86 0.27
Net Realized and Unrealized
Gains (Losses) on Investments 0.25 (0.11) 0.59 (0.33) (0.18) 0.13 0.04
------ ---------- -------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 0.91 0.65 1.34 0.48 0.81 0.99 0.31
LESS DISTRIBUTIONS
Dividends from Net
Investment Income (0.66) (0.76) (0.75) (0.81) (0.99) (0.86) (0.27)
Distributions from Net
Realized Gains (0.01)(5) (0.02)(5) -- -- (0.05) (0.07) (0.01)
------ ---------- -------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.67) (0.78) (0.75) (0.81) (1.04) (0.93) (0.28)
------ ---------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD $ $ 10.23 $ 9.99 $ 10.12 $ 9.53 $ 9.86 $ 10.09 $ 10.03
====== ========== ======== ======== ======== ======== ======== ========

Total Return +9.3% +6.7% +14.6% +5.3% +8.2% +10.1% +3.2%*
Net Assets, End of Period
(In Thousands) $1,531,627 $756,867 $164,954 $80,070 $130,001 $102,175 $17,128
Ratio of Expenses to Average
Net Assets(6) 0.8% 0.6% 1.0% 1.3% 1.1% 1.0% 0.1%**

Ratio of Net Investment Income to
Average Net Assets 6.3% 7.3% 7.8% 8.6% 9.7% 8.5% 8.8%**
Portfolio Turnover Rate 444.9% 353.3% 398.1% 313.8% 177.0% 461.3% 135.5%**
</TABLE>

STRONG GOVERNMENT SECURITIES FUND

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986(1)
---- ---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ $ 10.39 $ 10.77 $ 10.10 $ 10.08 $ 9.98 $ 9.75 $ 10.09 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.66 0.80 0.77 0.72 0.78 0.68 0.65 0.13
Net Realized and Unrealized
Gains (Losses) on Investments 0.63 0.11 0.84 0.12 0.17 0.32 (0.34) 0.09
------ -------- -------- -------- -------- -------- -------- -------- ------
TOTAL FROM INVESTMENT OPERATIONS 1.29 0.91 1.61 0.84 0.95 1.00 0.31 0.22
LESS DISTRIBUTIONS
Dividends from Net
Investment Income (0.66) (0.80) (0.77) (0.72) (0.78) (0.68) (0.65) (0.13)
Distributions from Net
Realized Gains (0.41) (0.49) (0.17) (0.10) (0.07) (0.09) -- --
------ -------- -------- -------- -------- -------- -------- -------- ------
TOTAL DISTRIBUTIONS (1.07) (1.29) (0.94) (0.82) (0.85) (0.77) (0.65) (0.13)
------ -------- -------- -------- -------- -------- -------- -------- ------
NET ASSET VALUE,
END OF PERIOD $ $ 10.61 $ 10.39 $ 10.77 $ 10.10 $ 10.08 $ 9.98 $ 9.75 $10.09
====== ======== ======== ======== ======== ======== ======== ======== ======

Total Return +12.7% +9.2% +16.7% +8.7% +9.9% +10.5% +3.4% +2.2%*
Net Assets, End of Period
(In Thousands) $ $221,961 $82,169 $51,934 $41,099 $35,119 $25,408 $11,380 $ 880
Ratio of Expenses to Average
Net Assets(7) 0.8% 0.7% 0.8% 1.3% 1.3% 0.4% 1.0% 0.6%**

Ratio of Net Investment Income to
Average Net Assets 6.0% 7.7% 7.5% 7.2% 7.6% 6.9% 6.6% 7.2%**
Portfolio Turnover Rate 520.9% 628.8% 292.9% 254.2% 421.6% 1,727.8% 715.0% 0.0%**

</TABLE>

<PAGE> 9
STRONG INCOME FUND

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985(1)
---- ---- ---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ $ 9.40 $ 9.37 $ 8.87 $ 10.57 $ 11.88 $ 11.64 $ 12.65 $ 10.30 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.70 0.82 0.76 1.06 1.40 1.17 1.23 0.98 0.03
Net Realized and Unrealized
Gains (Losses) on Investments 0.84 0.03 0.50 (1.70) (1.31) 0.24 (0.67) 2.08 0.27
------ -------- -------- ------- ------- -------- -------- -------- -------- ------
TOTAL FROM INVESTMENT
OPERATIONS 1.54 0.85 1.26 (0.64) 0.09 1.41 0.56 3.06 0.30
LESS DISTRIBUTIONS
Dividends from Net
Investment Income (0.70) (0.82) (0.76) (1.06) (1.40) (1.17) (1.53) (0.71) --
Distributions from Net
Realized Gains -- -- -- -- -- -- (0.04) -- --
------ -------- -------- ------- ------- -------- -------- -------- -------- ------
TOTAL DISTRIBUTIONS (0.70) (0.82) (0.76) (1.06) (1.40) (1.17) (1.57) (0.71) --
------ -------- -------- ------- ------- -------- -------- -------- -------- ------
NET ASSET VALUE,
END OF PERIOD $ $ 10.24 $ 9.40 $ 9.37 $ 8.87 $ 10.57 $ 11.88 $ 11.64 $ 12.65 $10.30
====== ======== ======== ======= ======= ======== ======== ======== ======== ======
Total Return +16.8% +9.4% +14.8% +6.2% +0.4% +12.5% +4.5% +30.0% +3.0%*
Net Assets, End of Period
(In Thousands) $ $123,400 $102,783 $92,364 $92,201 $195,350 $202,623 $137,898 $118,727 $2,452
Ratio of Expenses to Average
Net Assets 1.1% 1.3% 1.5% 1.4% 1.2% 1.2% 1.1% 1.0% 1.1%**

Ratio of Net Investment Income to
Average Net Assets 7.0% 8.7% 8.4% 11.2% 12.1% 9.8% 10.6% 11.3% 23.5%**
Portfolio Turnover Rate 665.8% 557.0% 392.4% 293.5% 207.2% 400.2% 245.4% 204.9% 7.3%**

</TABLE>
NOTES:

(1) Respective inception dates are December 31, 1990 for the Treasury
Money Fund; October 22, 1985 for the Money Fund; November 25, 1988 for the
Advantage Fund; August 31, 1987 for the Short-Term Bond Fund; October 29,
1986 for the Government Securities Fund; and December 12, 1985 for the
Income Fund.

(2) Since inception of the Treasury Money Fund, the Advisor has waived
all or a portion of its advisory fee and voluntarily absorbed certain other
expenses. If these fees had not been waived or if these expenses had not
been absorbed, the ratio of expenses to average net assets would have been
1.0%, 0.9% and 1.0% for 1991, 1992, and 1993, respectively.

(3) From time to time, the Advisor has voluntarily waived all
or a portion of its advisory fee. Without these waivers, the Money Fund's
ratio of expenses to average net assets would have been 0.9%, 1.3%, 1.1%,
1.0%, 0.9%, 1.0%, 1.1%, and 1.0% for 1985, 1986, 1987, 1989, 1990, 1991,
1992, and 1993, respectively.

(4) From inception of the Advantage Fund through April 1989,
the Advisor voluntarily waived its advisory fee. If these fees had not
been waived, the ratio of expenses to average net assets would have been
1.7% and 1.2% for 1988 and 1989, respectively.

(5) Ordinary income distribution for tax purposes.

(6) Since inception of the Short-Term Bond Fund through January 1988,
the Advisor voluntarily waived its advisory fee. For the period February
1988 through April 1989 and during 1993, the Advisor voluntarily waived a
portion of its advisory fee. In addition, the Advisor voluntarily absorbed
certain other expenses of the Fund and waived a portion of its advisory fee
in 1991 and 1992. Without these waivers and absorbtions, the ratio of
expenses to average net assets would have been 0.8%, 1.2%, 1.2%, 1.2%,
0.9%, and 0.9% for 1987, 1988, 1989, 1991, 1992, and 1993, respectively.

(7) The Advisor voluntarily waived its entire advisory fee from
inception of the Government Securities Fund through April 1989 and a
portion of its advisory fee in 1990, 1992, and 1993. In addition, the
Advisor voluntarily waived its entire advisory fee for 1991. In 1988,
1989, and 1990, the Advisor also voluntarily absorbed certain other
expenses of the Fund. Without these waivers and absorbtions, the ratio of
expenses to average net assets would have been 1.2%, 1.6%, 1.6%, 1.6% 1.5%,
1.4%, 1.2%, and 1.0% for 1986, 1987, 1988, 1989, 1990, 1991, 1992, and
1993, respectively.

* Total return is not annualized.
** Calculated on an annualized basis.

I-9
<PAGE> 10

HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES
Each Fund has distinct investment objectives and policies. Each Fund seeks to
provide income to investors consistent with the maturity, quality, and other
standards prescribed by its investment objective and policies. The investment
objective of each Fund is set forth under "Investment Objectives and Policies."

IMPLEMENTATION OF POLICIES AND RISKS
With the exception of the Treasury Money and Money Market Funds, the Funds may
engage in derivative transactions, including options, futures, and options on
futures transactions within specified limits. Each Fund may also invest in
repurchase agreements, when-issued securities, illiquid securities, and, other
than the Treasury Money Fund, foreign securities, and may engage in reverse
repurchase agreements and, other than the Treasury Money Fund, mortgage dollar
roll transactions. With the exception of the Treasury Money and Money Market
Funds, each Fund may also invest a portion of its assets in non-investment
grade securities. These investment practices involve risks that are different
in some respects from those associated with similar funds that do not use them.
(See "Implementation of Policies and Risks" and "Fundamentals of Fixed-Income
Investing -- High-Yield, High Risk Securities.")

MANAGEMENT
The Advisor, Strong Capital Management, Inc., serves as investment advisor to
the Funds. The Advisor provides investment management services for mutual funds
and other investment portfolios representing assets of over $11 billion. (See
"About the Funds -- Management.")

PURCHASE AND REDEMPTION OF SHARES
You may purchase or redeem shares of a Fund at net asset value. There are no
redemption or 12b-1 charges. The Treasury Money and Money Market Funds seek to
maintain a stable net asset value of $1.00 per share. The net asset values of
the Advantage, Short-Term Bond, Government Securities, and Corporate Bond Funds
change daily with the value of each Fund's portfolio. You can locate the net
asset value for a Fund in newspaper listings of mutual fund prices under the
"Strong Funds" heading. (See "Shareholder Manual -- How to Buy Shares" and "--
How to Sell Shares.")

SHAREHOLDER SERVICES
Strong shareholder benefits include: telephone purchase, exchange, and
redemption privileges; professional representatives available 24 hours a day;
automatic investment, automatic dividend reinvestment, payroll direct deposit,
automatic exchange and systematic withdrawal plans; free check writing; and a
no-minimum investment program. (See "Shareholder Manual -- Shareholder
Services.")

DIVIDENDS AND DISTRIBUTIONS
The policy of each Fund is to distribute substantially all net investment
income monthly and distribute any net realized capital gains annually. (See
"About the Funds -- Distributions and Taxes.")

I-10
<PAGE> 11
INVESTMENT OBJECTIVES AND POLICIES

The descriptions that follow are designed to help you choose the Fund that best
fits your investment objective. You may want to pursue more than one objective
by investing in more than one of the Funds or by investing in one of the other
Strong Funds, which are described in separate prospectuses. Each Fund's
investment objective is discussed below in connection with the Fund's
investment policies. Because of the risks inherent in all investments, there
can be no assurance that the Funds will meet their objectives.

Each Fund's return and risk potential depend in part on the maturity and
credit-quality characteristics of the underlying investments in its portfolio.
In general, longer-maturity securities carry higher yields and greater price
volatility than shorter-term securities. Similarly, securities issued by less
creditworthy entities tend to carry higher yields than those with higher credit
ratings. (See "Fundamentals of Fixed-Income Investing" for a more detailed
discussion of the principals and risks associated with fixed-income
securities.)

The following chart is intended to help distinguish the Funds and to help you
determine their suitability for your investments.

COMPARING THE FUNDS

<TABLE>
<CAPTION> DEGREE OF
AVERAGE CREDIT INCOME SHARE-PRICE
FUND MATURITY QUALITY POTENTIAL FLUCTUATION
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Treasury 90 days or Treasury Low Stable, but
Money less not
guaranteed
--------------------------------------------------------------------------
Money Market 90 days or Two highest Low Stable, but
less not
guaranteed
--------------------------------------------------------------------------
Advantage 1 year or At least 75% in Low to Very Low
less four highest; Moderate
up to 25% in
fifth highest
--------------------------------------------------------------------------
Short-Term 1 to 3 years At least 95% in Moderate Low
Bond four highest
--------------------------------------------------------------------------
Government Intermediate* Four highest Moderate Moderate
Securities to High
--------------------------------------------------------------------------
Corporate Intermediate* At least 75% in Moderate Moderate
Bond four highest to High
--------------------------------------------------------------------------
</TABLE>

*Expected range

Each Fund has adopted certain fundamental investment restrictions that are set
forth in the Statement of Additional Information ("SAI"). Those restrictions, a
Fund's investment objective, and any other investment policies identified as
"fundamental" in this prospectus or the SAI cannot be changed without
shareholder approval. To further guide investment activities, each Fund has
also instituted a number of non-fundamental operating policies, which are
described throughout this prospectus and in the SAI. Although operating
policies may be changed by a Fund's Board of Directors without shareholder
approval, a Fund will promptly notify shareholders of any material change in
operating policies.

When the Advisor determines market conditions warrant a temporary defensive
position, the Advantage, Short-Term Bond, Government Securities and Corporate
Bond Funds may each invest up to 100% of their respective total assets in cash
and short-term fixed

I-11
<PAGE> 12

income securities, including U.S. government securities, commercial paper,
banker's acceptances, certificates of deposit, and time deposits.

STRONG U.S. TREASURY MONEY FUND

The Treasury Money Fund seeks current income, a stable share price, and daily
liquidity. The Fund invests only in securities issued directly by the U.S.
Treasury.

The Fund is designed for investors who seek money-market yields through
investments in the highest-quality U.S. government securities, with no
anticipated fluctuations in principal. Because the Fund seeks to maintain a
constant net asset value of $1.00 per share, capital appreciation is not
expected to play a role in the Fund's returns, and dividend income alone will
provide its entire investment return. All money market instruments, even the
highest-quality U.S. government securities, can change in value for a number of
reasons, including when interest rates change dramatically. Although the Fund's
share price has remained constant in the past, THE FUND CANNOT GUARANTEE THAT
IT WILL ALWAYS BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
An investment in the Fund is neither insured nor guaranteed by the U.S.
government.

The Treasury Money Fund invests in a diversified portfolio of the
highest-quality, U.S. government securities, which are those issued directly by
the U.S. Treasury department. These include:
(i) Treasury bills, which have initial maturities of one year or less;
(ii) Treasury notes, which have initial maturities of between one and
ten years; and
(iii) Treasury bonds, which have initial maturities of ten years or
more.
All U.S. Treasury securities are guaranteed as to the timely payment of
principal and interest by the full faith and credit of the U.S. government.
Please note, however, that the government guarantee does not apply to the
market value of the securities or to the share price of the Fund.

The Fund further limits its investments to instruments that meet the maturity
and quality standards required or permitted by Rule 2a-7 under the Investment
Company Act of 1940 (the "1940 Act") for money market funds. Accordingly, the
Fund buys only securities with remaining maturities of thirteen months or less
and maintains a dollar-weighted average portfolio maturity of ninety days or
less.

Under federal law, the interest income earned from U.S. Treasury securities is
exempt from state and local taxes. Most, but not all, states allow mutual funds
to "pass through" that exemption to their shareholders. Because the
requirements vary by state, you should consult the instructions to your state's
income tax return or a qualified tax advisor to determine whether you may be
able to exclude the Fund's distributions from your state and local taxable
income. (See "About the Funds -- Distributions and Taxes.")

STRONG MONEY MARKET FUND

The Money Market Fund seeks current income, a stable share price, and daily
liquidity. The Fund's investments include corporate, bank, and government
instruments that represent minimal credit risk.

The Fund is designed for investors who seek money-market yields with no
anticipated fluctuations in principal. Because the Fund seeks to maintain a
constant net asset value of

I-12
<PAGE> 13

$1.00 per share, capital appreciation is not expected to play a role in the
Fund's returns, and dividend income alone will provide its entire investment
return. All money market instruments can change in value when interest rates or
an issuer's creditworthiness changes dramatically. Although the Fund's share
price has remained constant in the past, the Fund cannot guarantee that it will
always be able to maintain a stable net asset value of $1.00 per share. An
investment in the Fund is neither insured nor guaranteed by the U.S.
government.

The Money Market Fund invests in a combination of bank, corporate, and
government obligations that present minimal credit risks. The Fund restricts
its investments to instruments that meet certain maturity and quality standards
required or permitted by Rule 2a-7 under the 1940 Act for money market funds.
Accordingly, the Fund:
(i) limits its dollar-weighted average portfolio maturity to ninety days
or less;
(ii) buys only securities with remaining maturities of thirteen months
or less; and
(iii) buys only U.S. dollar-denominated securities that represent
minimal credit risks and are "high quality," as described below.

The Fund only invests in high-quality securities. Accordingly, the Fund will
invest at least 95% of its total assets in "first-tier" securities, generally
defined as those securities that, at the time of acquisition, are rated in the
highest rating category by at least two nationally recognized statistical
rating organizations ("NRSROs") or, if unrated, are determined by the Advisor
to be of comparable quality. The balance of the Fund, up to 5% of its total
assets, may be invested in securities that are considered "second-tier"
securities, generally defined as those securities that, at the time of
acquisition, are rated in the second-highest rating category or are of
comparable quality. (See "Fundamentals of Fixed-Income Investing -- Credit
Quality" and the SAI.)

STRONG ADVANTAGE FUND

The Advantage Fund seeks current income with a very low degree of share-price
fluctuation.

The Fund invests primarily in ultra short-term investment grade bonds. The Fund
is designed for investors who seek higher yields than money market funds
generally offer and who are willing to accept some modest principal fluctuation
in order to achieve that objective. Because its share price will vary, the Fund
is not an appropriate investment for those whose primary objective is absolute
principal stability.

The Fund's investments include a combination of high-quality money market
instruments, as well as securities with longer maturities and securities of
lower quality. Under normal market conditions, it is anticipated that the Fund
will maintain an average effective maturity of one year or less.

Under normal market conditions, at least 75% of the Fund's total assets will be
invested in investment-grade fixed income securities, which generally include a
range of securities from those in the highest rating category to those rated
medium-quality (e.g., BBB or higher by Standard & Poor's Ratings Group or
"S&P"). The Fund may also invest up to 25% of its total assets in
non-investment-grade fixed income securities that are rated in the
fifth-highest rating category (e.g., BB by S&P) or comparable quality unrated
securities. In general, non-investment-grade securities are regarded as
predominantly speculative with respect to the capacity of the issuer to pay
interest and repay principal. However, because these securities compose the
tier immediately below investment-

I-13
<PAGE> 14

grade, they are considered the least speculative non-investment-grade
securities. (See "Fundamentals of Fixed-Income Investing -- Credit Quality.")

STRONG SHORT-TERM BOND FUND

The Short-Term Bond Fund seeks total return by investing for a high level of
current income with a low degree of share-price fluctuation.

The Fund is designed for investors who are willing to accept some fluctuation
in principal in order to pursue a higher level of income than is generally
available from money market securities. Because its share price will vary, the
Fund is not an appropriate investment for those whose primary objective is
absolute principal stability.

The Fund invests primarily in short- and intermediate-term, investment-grade
bonds. Although the Fund may invest in any type of fixed income security, under
normal market conditions at least 65% of the Fund's assets will be invested in
bonds, such as corporate and U.S. government debt securities. The Fund's
dollar-weighted average portfolio maturity will be between one and three years
under normal market conditions.

Under normal market conditions, at least 95% of the Fund's total assets will be
invested in investment-grade securities, which include a range of securities
from those in the highest rating category to those rated medium-quality (e.g.,
BBB or higher by S&P). The Fund may also invest up to 5% of its assets in
non-investment-grade bonds and other high-yield, high-risk securities (e.g.,
those rated C or better by S&P). (See "Fundamentals of Fixed-Income
Investing.")

STRONG GOVERNMENT SECURITIES FUND

The Government Securities Fund seeks total return by investing for a high level
of current income with a moderate degree of share-price fluctuation.

The Fund is designed for long-term investors who want to pursue higher income
than shorter-term securities generally provide, who are willing to accept the
fluctuation in principal associated with longer-term securities, and who seek
the low credit risk that U.S. government securities generally carry.

Under normal market conditions, at least 80% of the Fund's total assets will be
invested in U.S. government securities. The balance of the Fund's assets may be
invested in other investment-grade fixed-income securities. While there are no
maturity restrictions on the portfolio, it is anticipated that the Fund's
average portfolio maturity will normally be between ___ and ___ years.

STRONG CORPORATE BOND FUND

The Corporate Bond Fund seeks total return by investing for a high level
current income with a moderate degree of share-price fluctuation.

I-14
<PAGE> 15

The Fund is designed for long-term investors who want to pursue higher income
than shorter-term securities generally provide and who are willing to accept
the fluctuation in principal associated with longer-term fixed income
securities. While there are no maturity restrictions for the Fund's securities,
it is anticipated that the Fund's average portfolio maturity will normally be
between ____ and ____ years.

The Fund may invest up to 35% of its total assets in any other type
fixed-income security, such as U.S. government securities and mortgage-backed
issues. Under normal market conditions at least 65% of the Fund's total assets
will be invested in the bonds of corporate issuers, which includes any
corporate debt obligation. Under normal market conditions, at least 75% of the
Fund's fixed income securities will be investment-grade, which include a range
of securities from those in the highest rating category to those rated
medium-quality (e.g., BBB or higher by S&P). The Fund may also invest up to 25%
of its assets in non-investment-grade bonds and other high-yield, high-risk
securities (e.g., those rated C or better by S&P). (See "Fundamentals of
Fixed-Income Investing.")

FUNDAMENTALS OF FIXED-INCOME INVESTING

Issuers of fixed-income securities have a contractual obligation to pay
interest at a specified rate ("coupon rate") on specified dates and to repay
principal ("face value" or "par value") on a specified maturity date. Certain
securities (usually intermediate- and long-term bonds) have provisions that
allow the issuer to redeem or "call" a bond before its maturity. Issuers are
most likely to call such securities during periods of falling interest rates.
As a result, a Fund may be required to invest the unanticipated proceeds of the
called security at lower interest rates, which may cause the Fund's income to
decline.

Although the net asset values of the Advantage, Short-Term Bond, Government
Securities, and Corporate Bond Funds will fluctuate, the Advisor actively
manages each Fund's portfolio, seeking to avoid or reduce, to the extent
possible, any negative changes in net asset value. The Treasury Money and Money
Market Funds each seek to maintain a stable net asset value of $1.00 per share.

PRICE VOLATILITY. The market value of debt obligations, including fixed-income
securities, is affected by changes in prevailing interest rates. The market
value of a debt obligation generally reacts inversely to interest-rate changes,
meaning, when prevailing interest rates decline, an obligation's price usually
rises, and when prevailing interest rates rise, an obligation's price usually
declines. A fund portfolio consisting primarily of debt obligations will react
similarly to changes in interest rates.

MATURITY. In general, the longer the maturity of a debt obligation, the higher
its yield and the greater its sensitivity to changes in interest rates.
Conversely, the shorter the maturity, the lower the yield but the greater the
price stability. Commercial paper is generally considered the shortest form of
debt security. Notes, whose original maturities are two years or less, are
considered short-term obligations. The term "bond" generally refers to
securities with maturities longer than two years. Bonds with maturities of
three years or less are considered short-term, bonds with maturities between
three and seven years are considered intermediate-term, and bonds with
maturities greater than seven years are considered long-term.

Maturity may be calculated in several ways. In determining a Fund's weighted
average portfolio maturity, a Fund will consider a security to have a maturity
equal to its stated maturity (or redemption date if it has been called for
redemption), except that it may consider (i) variable rate securities to have a
maturity equal to the period remaining until

I-15
<PAGE> 16

the next readjustment in the interest rate, unless subject to a demand feature,
(ii) variable rate securities subject to a demand feature to have a remaining
maturity equal to the longer of (a) the next readjustment in the interest rate
or (b) the period remaining until the principal can be recovered through
demand, and (iii) floating rate securities subject to a demand feature to have
a maturity equal to the period remaining until the principal can be recovered
through demand.

A Fund's average maturity represents an average based on the actual stated
maturity dates of the debt securities in the Fund's portfolio, except that (i)
variable-rate securities are deemed to mature at the next interest rate
adjustment date, (ii) debt securities with put features are deemed to mature at
the next put exercise date, (iii) the maturity of mortgage-backed securities is
determined on an "expected life" basis, and (iv) securities being hedged with
futures contracts may be deemed to have a longer maturity, in the case of
purchases of futures contracts, and a shorter maturity, in the case of sales of
futures contracts, than they would otherwise be deemed to have.

A Fund's average "effective maturity" will be calculated in nearly the same
manner as average maturity, which is explained above. However, for the purpose
of calculating average effective maturity, a security that is subject to
redemption at the option of the issuer on a particular date (the "call date"),
which is prior to the security's stated maturity, may be deemed to mature on
the call rather than on its stated maturity date. The call date of a security
will be used to calculate average effective maturity when the Advisor
reasonably anticipates, based upon information available to it, that the issuer
will exercise its right to redeem the security. The Advisor may base its
conclusion on such factors as the interest rate paid on the security compared
to prevailing market rates, the amount of cash available to the issuer of the
security, events affecting the issuer of the security, and other factors that
may compel or make it advantageous for the issuer to redeem a security prior to
its stated maturity.

CREDIT QUALITY. The values of fixed-income securities may also be affected by
changes in the credit rating or financial condition of their issuers.
Generally, the lower the quality rating of a security, the higher the degree of
risk as to the payment of interest and return of principal. To compensate
investors for taking on such increased risk, those issuers deemed to be less
creditworthy generally must offer their investors higher interest rates than do
issuers with better credit ratings.

In conducting its credit research and analysis, the Advisor considers both
qualitative and quantitative factors to evaluate the creditworthiness of
individual issuers. The Advisor also relies, in part, on credit ratings
compiled by a number of NRSROs. "Appendix A -- Ratings of Debt Securities"
presents the ratings of three well-known such organizations: Moody's Investors
Services, Inc., Standard & Poor's Ratings Group, and Fitch Investors Service,
Inc.

INVESTMENT-GRADE BONDS. Bonds rated in the highest- through the medium-quality
categories are commonly referred to as "investment-grade" bonds.
Investment-grade bonds include the following:

- - U.S. government bonds (See "Types of Portfolio Securities -- Government
Securities" below);
- - commercial paper rated in one of the three highest rating categories (e.g.,
A-3 or higher by S&P);
- - short-term notes rated in one of the three highest rating categories
(e.g., SP-3 or higher by S&P);

I-16
<PAGE> 17

- - bonds rated in one of the four highest rating categories (e.g., rated BBB
or higher by S&P); and
- - unrated bonds determined by the Advisor to be of comparable quality.

Investment-grade bonds are generally believed to have relatively low degrees of
credit risk. However, medium-quality bonds, while considered investment-grade,
may have some speculative characteristics, since their issuers' capacity for
repayment may be more vulnerable to adverse economic conditions or changing
circumstances than that of higher-rated issuers.

With the exception of the Treasury Money and Money Market Funds, a Fund's
quality policies are applied at the time of purchase of a security. These
policies allow a Fund to retain a security whose credit quality is downgraded
after purchase. The Advisor will, however, monitor the credit quality of any
such security to consider what action, if any, the Fund should take consistent
with its investment objective.

HIGH-YIELD, HIGH-RISK SECURITIES. High-yield, high-risk securities, also
referred to as "junk bonds," are those securities that are rated lower than
investment-grade and unrated securities of comparable quality. Although these
securities generally offer higher yields than investment-grade securities with
similar maturities, lower-quality securities involve greater risks, including
the possibility of default or bankruptcy. In general, they are regarded to be
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal. Other potential risks associated with investing in
high-yield securities include:

- - substantial market-price volatility resulting from changes in interest
rates, changes in or uncertainty about economic conditions, and changes in
the actual or perceived ability of the issuer to meet its obligations;
- - greater sensitivity of highly leveraged issuers to adverse economic changes
and individual-issuer developments;
- - subordination to the prior claims of other creditors;
- - additional Congressional attempts to restrict the use or limit the tax
and other advantages of these securities; and
- - adverse publicity and changing investor perceptions about these securities.

As with any other asset in a Fund's portfolio, any reduction in the value of
such securities as a result of the factors listed above would be reflected in
the net asset value of the Fund. In addition, a Fund that invests in
lower-quality securities may incur additional expenses to the extent it is
required to seek recovery upon a default in the payment of principal and
interest on its holdings. As a result of the associated risks, successful
investments in high-yield, high-risk securities will be more dependent on the
Advisor's credit analysis than generally would be the case with investments in
investment-grade securities.

The market for high-yield, high-risk securities initially grew during a period
of economic expansion and has experienced mixed results thereafter. It is
uncertain how the high-yield market will perform during a prolonged period of
rising interest rates. A prolonged economic downturn or a prolonged period of
rising interest rates could adversely affect the market for these securities,
increase their volatility, and reduce their value and liquidity. In addition,
lower-quality securities tend to be less liquid than higher-quality debt
securities because the market for them is not as broad or active. If market
quotations are not available, these securities will be valued in accordance
with procedures established by a Fund's Board of Directors. Judgment may,
therefore, play a greater role in valuing these

I-17
<PAGE> 18

securities. The lack of a liquid secondary market may have an adverse effect on
market price and a Fund's ability to sell particular securities.

IMPLEMENTATION OF POLICIES AND RISKS

In addition to the investment policies described above (and subject to certain
restrictions described below), the Funds may invest in some or all of the
following securities and may employ some or all of the following investment
techniques, some of which may present special risks as described below.
Presently, the Funds do not intend to engage in cross-trading. A more complete
discussion of certain of these securities and investment techniques and the
associated risks is contained in the Funds' SAI.

FIXED INCOME SECURITIES
The Advantage, Short-Term Bond, Government Securities, and Corporate Bond Funds
may invest in any securities commonly understood to be fixed income securities.
A Fund's authority to invest in certain types of fixed income securities may be
restricted or subject to objective investment criteria. For additional
information on these restrictions, see "Investment Objectives and Policies."

TYPES OF SECURITIES. Fixed income securities include (i) corporate debt
securities, including bonds, debentures, and notes; (ii) bank obligations, such
as certificates of deposit, banker's acceptances, and time deposits of domestic
banks, foreign branches and subsidiaries of domestic banks, and domestic and
foreign branches of foreign banks and domestic savings and loan associations
(in amounts in excess of the insurance coverage (currently $100,000 per
account) provided by the Federal Deposit Insurance Corporation); (iii)
commercial paper (including variable-amount master demand notes); (iv)
repurchase agreements involving these securities; (v) loan interests (vi)
private placements (restricted securities); (vii) foreign securities -- debt
securities issued by foreign issuers traded either in foreign markets or in
domestic markets through depositary receipts; (viii) convertible securities --
debt securities of corporations convertible into or exchangeable for equity
securities or debt securities that carry with them the right to acquire equity
securities, as evidenced by warrants attached to such securities, or acquired
as part of units of the securities; (ix) preferred stocks -- securities that
represent an ownership interest in a corporation and that give the owner a
prior claim over common stock on the company's earnings or assets; (x) U.S.
government securities; (xi) mortgage-backed securities, collateralized mortgage
obligations, and similar securities; and (xii) municipal bonds.

GOVERNMENT SECURITIES. U.S. government securities include securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities and are
obligations supported by the full faith and credit of the U.S., such as U.S.
Treasury obligations and the obligations of certain agencies, including the
Government National Mortgage Association, and securities that are backed only
by (i) the right of the issuer to borrow from the U.S. Treasury, such as the
Federal Home Loan Bank; (ii) the discretionary authority of the U.S. government
to purchase such securities, such as the Federal National Mortgage Association;
or (iii) the credit of the agency or instrumentality itself, such as the
Student Loan Marketing Association. While the U.S. government provides
financial support to such U.S. government-sponsored agencies or
instrumentalities, no assurance can be given that it always will do so. The
U.S. government, its agencies, and instrumentalities do not guarantee the
market value of their securities and consequently, the value of such securities
may fluctuate.

I-18
<PAGE> 19

MORTGAGE- AND ASSET-BACKED SECURITIES. Mortgage-backed securities represent
direct or indirect participation in, or are secured by and payable from,
mortgage loans secured by real property, and include single- and multi-class
pass-through securities and collateralized mortgage obligations. Such
securities may be issued or guaranteed by U.S. government agencies or
instrumentalities or by private issuers, generally originators in mortgage
loans, including savings associations, mortgage bankers, commercial banks,
investment bankers, and special purpose entities (collectively, "private
lenders"). Mortgage-backed securities issued by private lenders may be
supported by pools of mortgage loans or other mortgage-backed securities that
are guaranteed, directly or indirectly, by the U.S. government or one of its
agencies or instrumentalities, or they may be issued without any governmental
guarantee of the underlying mortgage assets but with some form of non-
governmental credit enhancement.

Asset-backed securities have structural characteristics similar to
mortgage-backed securities. However, the underlying assets are not first lien
mortgage loans or interests therein, but include assets such as motor vehicle
installment sales contracts, other installment loan contracts, home equity
loans, leases of various types of property and receivables from credit card or
other revolving credit arrangements. Payments or distributions of principal
and interest on asset-backed securities may be supported by non-governmental
credit enhancements similar to those utilized in connection with
mortgage-backed securities.

The yield characteristics of mortgage- and asset-backed securities differ from
those of traditional debt securities. Among the principal differences are that
interest and principal payments are made more frequently on mortgage- and
asset-backed securities, usually monthly, and that principal may be prepaid at
any time because the underlying mortgage loans or other assets generally may be
prepaid at any time. As a result, if a Fund purchases these securities at a
premium, a prepayment rate that is faster than expected will reduce yield to
maturity, while a prepayment rate that is slower than expected will have the
opposite effect of increasing the yield to maturity. Conversely, if a Fund
purchases these securities at a discount, a prepayment rate that is faster than
expected will increase yield to maturity, while a prepayment rate that is
slower than expected will reduce yield to maturity. Accelerated prepayments on
securities purchased by a Fund at a premium also impose a risk of loss of
principal because the premium may not have been fully amortized at the time the
principal is prepaid in full. The market for privately issued mortgage- and
asset-backed securities is smaller and less liquid than the market for
government sponsored mortgage-backed securities.

The Funds may invest in stripped mortgage- or asset-backed securities, which
receive differing proportions of the interest and principal payments from the
underlying assets. The market value of such securities generally is more
sensitive to changes in prepayment and interest rates than is the case with
traditional mortgage- and asset-backed securities, and in some cases such
market value may be extremely volatile. With respect to certain stripped
securities, such as interest only ("IO") and principal only ("PO") classes, a
rate of prepayment that is faster or slower than anticipated may result in a
Fund failing to recover all or a portion of its investment, even though the
securities are rated investment grade.

LOAN INTERESTS. The Advantage, Short-Term Bond, and Corporate Bond Funds may
each invest a portion of its assets in Loan Interests, which are interests in
amounts owned by a corporate, governmental or other borrower to lenders or
lending syndicates. Loan Interests purchased by a Fund may have a maturity of
any number or days or years, may be secured or unsecured, and may be of any
credit quality. Loan Interests, which may take

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the form of participation interests in, assignments of or novations of a loan,
may be acquired from U.S. and foreign banks, insurance companies, finance
companies or other financial institutions that have made loans or are members
of a lending syndicate or from the holders of Loan Interests. Loan Interests
involve the risk of loss in case of default or bankruptcy of the borrower and,
in the case of participation interests, involve a risk of insolvency of the
agent lending bank or other financial intermediary. Loan Interests are not
rated by any NRSROs and are, at present, not readily marketable and may be
subject to contractual restrictions on resale.

FOREIGN SECURITIES AND CURRENCIES
The Money, Advantage, Short-Term Bond, and Corporate Bond Funds each may invest
up to 25% of their total assets directly in foreign securities. The Advantage,
Short-Term Bond, and Corporate Bond Funds may also invest in foreign securities
through depositary receipts without regard to this limitation. However, the
Advisor currently intends to invest not more than 25% of a Fund's assets in
foreign securities, including both direct investments and investments made
through depositary receipts. In accordance with Rule 2a-7 under the 1940 Act,
the Money Market Fund will limit its investments in foreign securities to those
denominated in U.S. dollars. Foreign investments involve special risks
including (i) expropriation, confiscatory taxation, and withholding taxes on
dividends and interest; (ii) less extensive regulation of foreign brokers,
securities markets and issuers; (iii) less publicly available information and
different accounting standards; (iv) costs incurred in conversions between
currencies, possible delays in settlement in foreign securities markets,
limitations on the use or transfer or assets (including suspension of the
ability to transfer currency from a given country), and difficulty of enforcing
obligations in other countries; and (v) diplomatic developments, and political
or social instability. Foreign economies may differ favorably or unfavorably
from the U.S. economy in various respects, including growth of gross domestic
product, rates of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency, and balance of payments positions. Many foreign
securities are less liquid and their prices more volatile than comparable U.S.
securities. Although the Funds generally invest only in securities that are
regularly traded on recognized exchanges or in over-the-counter markets, from
time to time foreign securities may be difficult to liquidate rapidly without
adverse price effects. Certain costs attributable to foreign investing, such as
custody charges and brokerage costs, are higher than those attributable to
domestic investing.

Because most foreign securities are denominated in non-U.S. currencies, the
investment performance of the Advantage, Short-Term Bond, and Corporate Bond
Funds could to a certain extent be significantly affected by changes in foreign
currency exchange rates. The value of a Fund's assets denominated in foreign
currencies will increase or decrease in response to fluctuations in the value
of those foreign currencies relative to the U.S. dollar. Currency exchange
rates can be volatile at times in response to supply and demand in the currency
exchange markets, international balances of payments, governmental
intervention, speculation, and other political and economic conditions.

The Advantage, Short-Term Bond, and Corporate Bond Funds may purchase and sell
foreign currency on a spot basis and may engage in forward currency contracts,
currency options, and futures transactions for hedging or any other lawful
purpose. (See "Derivative Instruments.")

REPURCHASE AGREEMENTS
Each Fund, other than the Treasury Money Fund, may enter into repurchase
agreements with certain banks and non-bank dealers. In a repurchase agreement,
a Fund buys a security at one price, and at the time of sale, the seller agrees
to repurchase the obligation at a mutually agreed upon time and price (usually
within seven days). The

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<PAGE> 21

repurchase agreement determines the yield during the purchaser's holding
period, while the seller's obligation to repurchase is secured by the value of
the underlying security. A Fund may enter into repurchase agreements with
respect to any security in which it may invest. The Advisor will monitor, on an
ongoing basis, the value of the underlying securities to ensure that the value
always equals or exceeds the repurchase price plus accrued interest. Repurchase
agreements could involve certain risks in the event of a default or insolvency
of the other party to the agreement, including possible delays or restrictions
upon a Fund's ability to dispose of the underlying securities. Although no
definitive creditworthiness criteria are used, the Advisor reviews the
creditworthiness of the banks and non-bank dealers with which the Funds enter
into repurchase agreements to evaluate those risks. Each Fund will not invest
more than 15%, or 10% with respect to the Treasury Money and Money Market
Funds, of its net assets in repurchase agreements maturing in more than seven
days. (See "Illiquid Securities" below.)

DERIVATIVE INSTRUMENTS
The Advantage, Short-Term Bond, Government Securities, and Corporate Bond Funds
may use derivative transactions for any lawful purpose, including hedging, risk
management, or enhancing returns, but not for speculation. Derivative
instruments are securities or agreements whose value is derived from the value
of some underlying asset, including securities, reference indexes, or
commodities. Options, futures, and options on futures transactions are
considered derivative transactions. Derivative instruments or agreements
generally have characteristics similar to forward contracts (under which one
party is obligated to buy and the other party is obligated to sell an
underlying asset at a specific price on a specific date) or option contracts
(under which the holder of the option has the right but not the obligation to
buy or sell an underlying asset at a specified date). Accordingly, the change
in value of a forward-based derivative is generally related to the change in
value of the underlying asset. Option-based derivative instruments generally
will increase in value from favorable fluctuations in the value of the
underlying asset and decrease in value from unfavorable fluctuations in the
value of the underlying asset. Derivative transactions may include elements of
leverage and, accordingly, the fluctuation of the value of the derivative
transaction in relation to the underlying asset may be magnified. The purchaser
of an option-based derivative will generally pay a premium in connection with
entering into such position and the seller of an option-based derivative will
generally receive a premium in connection with such position. In addition to
options, futures, and options on futures transactions, derivative transactions
may include swaps (an agreement by two parties to exchange a series of cash
flows in the future, such as interest rate payments), interest rate caps, under
which, in return for a premium, one party agrees to make payments to the other
to the extent that interest rates exceed a specified rate, or "cap," and
interest rate floors, under which, in return for a premium, one party agrees to
make payments to the other to the extent that interest rates fall below a
specified level, or "floor". Derivative transactions may also include forward
currency contracts and foreign currency exchange-related securities.

Derivative transactions may be exchange-traded or over-the-counter transactions
between private parties. Over-the-counter transactions are subject to the
credit risk of the counterparty to the instrument and are less liquid than
exchange-traded derivatives since they often can only be closed out with the
other party to the transaction. When required by the SEC, a Fund will set aside
permissible liquid assets in a segregated account to secure its obligations
under derivative transactions. In order to maintain its required cover for a
derivative transaction, the Fund may need to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate a
derivative position.

The successful use of derivative transactions by a Fund is dependent upon the
Advisor's ability to correctly anticipate trends in the underlying asset. To
the extent that a Fund is

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engaging in derivative transactions other than for hedging purposes, the Fund's
successful use of such transactions is more dependent upon the Advisor's
ability to correctly anticipate such trends, since losses in these transactions
may not be offset in gains in the Fund's portfolio or in lower purchase prices
for assets it intends to acquire. The Advisor's prediction of trends in
underlying assets may prove to be inaccurate, which could result in substantial
losses to a Fund. Hedging transactions are also subject to risks. If the
Advisor incorrectly anticipates trends in the underlying asset, a Fund may be
in a worse position than if no hedging had occurred. In addition, there may be
imperfect correlation between a Fund's derivative transactions and the
instruments being hedged.

In connection with its futures and options on futures transactions, the Funds
are subject to certain restrictions on such transactions under the Commodity
Exchange Act and, accordingly, a Fund will use futures and options on futures
transactions solely for bona fide hedging transactions (within the meaning of
the Commodity Exchange Act). However, each Fund may, in addition to bona fide
hedging transactions, use futures and options on futures transactions if the
aggregate initial margin and premiums required to establish such positions,
less the amount by which any such options positions are in the money (within
the meaning of the Commodity Exchange Act), do not exceed 5% of the Fund's net
assets. In addition, the Funds follow certain other restrictions concerning
their options, futures, and options on futures transactions and, accordingly,
(i) the aggregate value of securities that underlie call options on securities
written by a Fund or obligations that underlie put options on securities
written by a Fund, determined as of the date the options are written, will not
exceed 50% of a Fund's net assets; (ii) the aggregate premiums paid on all
options purchased by a Fund and which are being held will not exceed 20% of a
Fund's net assets; (iii) the Fund will not purchase put or call options, other
than hedging positions, if, as a result thereof, more than 5% of its total
assets would be so invested; and (iv) the aggregate margin deposits required on
all futures and options on futures transactions being held will not exceed 5%
of a Fund's total assets.

WHEN-ISSUED SECURITIES
Each Fund may invest in securities purchased on a when-issued or delayed
delivery basis without limitation. The Funds also may sell securities on a
delayed delivery basis. Although the payment and interest terms of these
securities are established at the time the purchaser enters into the
commitment, these securities may be delivered and paid for at a future date,
generally within 45 days. Purchasing when-issued securities allows a Fund to
lock in a fixed price or yield on a security it intends to purchase. However,
when a Fund purchases a when-issued security, it immediately assumes the risk
of ownership, including the risk of price fluctuation until the settlement
date.

The greater a Fund's outstanding commitments for these securities, the greater
the exposure to potential fluctuations in the net asset value of a Fund.
Purchasing when-issued securities may involve the additional risk that the
yield available in the market when the delivery occurs may be higher than that
obtained at the time of commitment. Although a Fund may be able to sell these
securities prior to the delivery date, it will purchase when-issued securities
for the purpose of actually acquiring the securities, unless after entering
into the commitment a sale appears desirable for investment reasons. To the
extent required by the SEC, each Fund will segregate and maintain cash, cash
equivalents, or other high-quality, liquid debt securities in an amount at
least equal to the amount of outstanding commitments for when-issued securities
at all times.

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ILLIQUID SECURITIES
The Advantage, Short-Term Bond, Government Securities, and Corporate Bond Funds
will not invest in illiquid securities if, as a result of such investments,
more than 15% of a Fund's net assets (taken at market value at the time of each
investment) would be invested in illiquid securities. The U.S. Treasury Money
and Money Market Funds will not invest in illiquid securities if, as a result
of such investments, more than 10% of a Fund's net assets would be invested in
such securities. Certain restricted securities which may be resold to
institutional investors under Rule 144A under the Securities Act of 1933 and
Section 4(2) commercial paper, may be determined to be liquid under guidelines
adopted by each Fund's Board of Directors. See the Funds' Statement of
Additional Information for further information.

ZERO-COUPON, STEP-COUPON, AND PAY-IN-KIND SECURITIES
If the Advisor determines it consistent with the Fund's investment objective,
the Advantage, Short-Term Bond, Government Securities and Corporate Bond Funds
may invest without limitation in zero-coupon, step-coupon, and pay-in-kind
securities. These securities are debt securities that do not make regular cash
interest payments. Zero-coupon are sold at a deep discount to their face value.
Pay-in-kind securities pay interest through the issuance of additional
securities. Because such securities do not pay current cash income, the price
of these securities can be volatile when interest rates fluctuate. While these
securities do not pay current cash income, federal income tax law requires the
holders of zero-coupon, step-coupon, and certain pay-in-kind securities to
report as interest each year the portion of the original discount (or deemed
discount) on such securities accruing that year. In order to qualify as a
"regulated investment company" under the Internal Revenue Code, each Fund may
be required to distribute a portion of such discount and may be required to
dispose of other portfolio securities, which may occur in periods of adverse
market prices, in order to generate cash to meet these distribution
requirements.

MORTGAGE DOLLAR ROLLS AND REVERSE REPURCHASE AGREEMENTS
The Advantage, Short-Term Bond, Government Securities, and Corporate Bond Funds
may engage in reverse repurchase agreements to facilitate portfolio liquidity,
a practice common in the mutual fund industry, or for arbitrage transactions
discussed below. In a reverse repurchase agreement, the Fund would sell a
security and enter into an agreement to repurchase the security at a specified
future date and price. The Fund generally retains the right to interest and
principal payments on the security. Since the Fund receives cash upon entering
into a reverse repurchase agreement, it may be considered a borrowing. When
required by guidelines of the SEC, a Fund will set aside permissible liquid
assets in a segregated account to secure its obligation to repurchase the
security.

Each Fund, other than the Treasury Money Fund, may also enter into mortgage
dollar rolls, in which the Fund would sell mortgage-backed securities for
delivery in the current month and simultaneously contract to purchase
substantially similar securities on a specified future date. While a Fund would
forego principal and interest paid on the mortgage-backed securities during the
roll period, the Fund would be compensated by the difference between the
current sales price and the lower price for the future purchase as well as by
any interest earned on the proceeds of the initial sale. The Fund also could be
compensated through the receipt of fee income equivalent to a lower forward
price. At the time that the Fund would enter into a mortgage dollar roll, it
would set aside permissible liquid assets in a segregated account to secure its
obligation for the forward commitment to buy mortgage-backed securities.
Mortgage dollar roll transactions may be considered a borrowing by the Funds.

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The mortgage dollar rolls and reverse repurchase agreements entered into by the
Funds may be used as arbitrage transactions in which a Fund will maintain an
offsetting position in investment grade securities or repurchase agreements
that mature on or before the settlement date on the related mortgage dollar
roll or reverse repurchase agreement. Since a Fund will receive interest on the
securities or repurchase agreements in which it invests the transaction
proceeds, such transactions may involve leverage. However, since such
securities or repurchase agreements will be high quality and will mature on or
before the settlement date of the mortgage dollar roll or reverse repurchase
agreement, the Advisor believes that such arbitrage transactions do not present
the risks to the Funds that are associated with other types of leverage. The
Treasury Money and Money Market Funds only engage in transactions permissible
pursuant to Rule 2a-7 under the 1940 Act.

PORTFOLIO TURNOVER
Historical portfolio turnover rates for the Advantage, Short-Term Bond,
Government Securities, and Corporate Bond Funds are listed under "Financial
Highlights." The annual portfolio turnover rate indicates changes in a Fund's
investments and may also be affected by sales of portfolio securities necessary
to meet cash requirements for redemption of shares. The turnover rate may vary
from year to year, as well as within a year. High turnover in any year will
result in the payment by a Fund of above average amounts of transaction costs
and could result in the payment by shareholders of above average amounts of
taxes on realized investment gains. The annual portfolio turnover rates for
these Funds are expected to be between 200% and 300%. However, each Fund's
portfolio turnover rate may exceed 300% when the Advisor believes the
anticipated benefits of short-term investments outweigh any increase in
transaction costs or increase in capital gains. These rates should not be
considered as limiting factors.

ABOUT THE FUNDS

MANAGEMENT
The Board of Directors of each Fund is responsible for managing its business
and affairs. Each of the Funds has entered into an investment advisory
agreement (collectively the "Advisory Agreements") with Strong Capital
Management, Inc. (the "Advisor"). Except for the advisory fee arrangements, the
Advisory Agreements are substantially identical. Under the terms of these
agreements, the Advisor manages each Fund's investments and business affairs
subject to the supervision of each Fund's Board of Directors.

ADVISOR. The Advisor began conducting business in 1974. Since then, its
principal business has been providing continuous investment supervision for
individuals and institutional accounts, such as pension funds and
profit-sharing plans. The Advisor also acts as investment advisor for each of
the mutual funds within the Strong Family of Funds. As of March 31, 1995, the
Advisor had over $11 billion under management. Mr. Richard S. Strong, the
Chairman of the Board of each Fund, is the controlling shareholder of the
Advisor.

As compensation for its services, each Fund pays the Advisor a monthly advisory
fee based on a percentage of each Fund's average daily net asset value. The
annual rates are as follows: Treasury Money Fund, .40%; Money Market Fund,
.50%; Advantage and Government Securities Funds, .60%; Short-Term Bond and
Corporate Bond Funds, .625%. From time to time, the Advisor may voluntarily
waive all or a portion of its

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management fee and/or absorb certain Fund expenses without further notification
of the commencement or termination of such waiver or absorption. Any such
waiver or absorption will temporarily lower a Fund's overall expense ratio and
increase a Fund's overall return to investors.

Except for expenses assumed by the Advisor or Strong Funds Distributors, Inc.,
each Fund is responsible for all its other expenses, including, without
limitation, interest charges, taxes, brokerage commissions, and similar
expenses; expenses of issue, sale, repurchase, or redemption of shares;
expenses of registering or qualifying shares for sale with the states and the
SEC; expenses of printing and distribution costs of prospectuses to existing
shareholders; charges of custodians (including fees as custodian for keeping
books and similar services for a Fund), transfer agents (including the printing
and mailing of reports and notices to shareholders), registrars, auditing and
legal services, and clerical services related to record keeping and shareholder
relations; printing of stock certificates; fees for directors who are not
"interested persons" of the Advisor; expenses of indemnification; extraordinary
expenses; and costs of shareholder and director meetings.

PORTFOLIO MANAGERS. The following individuals serve as portfolio managers for
the Strong Corporate Bond Funds.

STRONG U.S. TREASURY MONEY FUND
STRONG MONEY MARKET FUND

JAY N. MUELLER. Mr. Mueller joined the Advisor in September 1991 as a
securities analyst and portfolio manager. For four years prior to that, he was
a securities analyst and portfolio manager with R. Meeder & Associates of
Dublin, Ohio. Mr. Mueller received his bachelor's degree in economics in 1982
from the University of Chicago. He has managed the Money Market and U.S.
Treasury Money Funds since September 1991. Additionally, in 1993 he became
portfolio co-manager of the Strong Asset Allocation Fund.

STRONG ADVANTAGE FUND
STRONG CORPORATE BOND FUND

JEFFREY A. KOCH. Mr. Koch joined the Advisor as a portfolio manager and
securities analyst in June 1989. For a brief period prior to that, he was a
market maker clerk at Fossett Corporation, a clearing firm. Mr. Koch earned his
M.B.A. in Finance at Washington University in St. Louis, Missouri in 1989. His
undergraduate degree, awarded in 1987, is from the University of
Minnesota-Morris. In 1991, Mr. Koch joined Bradley C. Tank as co-portfolio
manager of the Advantage and Corporate Bond Funds, as well as the Short-Term
Bond and Government Securities Funds. They managed the four Funds together
until 1993, when Mr. Koch assumed sole management responsibility for the
Advantage and Corporate Bond Funds.

STRONG SHORT-TERM BOND FUND
STRONG GOVERNMENT SECURITIES FUND

BRADLEY C. TANK. Before joining the Advisor in June 1990, Mr. Tank spent eight
years at Salomon Brothers, Inc., where he was a vice president and fixed-income
specialist. He has managed the Short-Term Bond and Government Securities Funds
since he joined the Advisor. In 1991, he was joined by portfolio co-manager
Jeffrey A. Koch. As a team they managed the Short-Term Bond, Government
Securities, Advantage, and Corporate Bond Funds until 1993, when Mr. Tank
assumed sole management responsibility for the

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Short-Term Bond and Government Securities Funds. Although they have independent
management assignments, Mr. Tank and Mr. Koch continue their team approach to
the research and analysis of fixed income securities. In addition to his fixed
income management duties, Mr. Tank co-manages the Strong Asset Allocation Fund
and chairs the Fixed Income Investment Committee.

TRANSFER AND DIVIDEND-DISBURSING AGENT

The Advisor also acts as dividend-disbursing agent and transfer agent for the
Funds. The Advisor is compensated for its services based on an annual fee per
account plus certain out-of-pocket expenses. The fees received and the services
provided as transfer agent and dividend-disbursing agent are in addition to
those received and provided under the Advisory Agreements between the Advisor
and the Funds.

DISTRIBUTOR

Strong Funds Distributors, Inc., an indirect subsidiary of the Advisor, acts as
distributor of the shares of the Funds.

ORGANIZATION

SHAREHOLDER RIGHTS. Each Fund is a Wisconsin corporation that is authorized to
issue shares of common stock and series and classes of series of shares of
common stock. Each share of the Funds has one vote, and all shares participate
equally in dividends and other capital gains distributions by the respective
Fund and in the residual assets of the respective Fund in the event of
liquidation. Certificates will be issued for shares held in your account only
upon your written request. You will, however, have full shareholder rights
whether or not you request certificates. Generally, the Funds will not hold an
annual meeting of shareholders unless required by the 1940 Act. Shareholders
have certain rights, including the right to call a meeting upon a vote of 10%
of a Fund's outstanding shares for the purpose of voting to remove one or more
directors or to transact any other business.

SHAREHOLDER PRIVILEGES. The shareholders of each Fund may benefit from the
privileges described in the "Shareholder Manual" (see page II-1). However,
each Fund reserves the right, at any time and without prior notice, to suspend,
limit, modify, or terminate any of these privileges or their use in any manner
by any person or class.

DISTRIBUTIONS AND TAXES

PAYMENT OF DIVIDENDS AND DISTRIBUTIONS. You may elect to have all your
dividends and capital gains distributions from the Funds automatically
reinvested in additional fund shares or in shares of another Strong Fund at the
net asset value determined on the dividend or capital gains distribution
payment date. If you request in writing that your dividends and other
distributions be paid in cash, the Fund will credit your bank account by
Electronic Fund Transfer ("EFT") or issue a check to you within five business
days of the reinvestment date. You may change your election at any time by
calling or writing the Strong Funds. Strong Funds must receive any such change
7 days (15 days for EFT) prior to a dividend or capital gains distribution
payment date in order for the change to be effective for that payment.

Each Fund distributes substantially all of its net investment income monthly
and net realized capital gains annually. The Funds will accrue dividends on
each day on which a

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Fund's net asset value is calculated. Income earned on weekends, holidays, and
other days on which net asset value is not calculated will be declared as a
dividend on the day on which net asset value was most recently calculated.

TAX STATUS OF DIVIDENDS AND DISTRIBUTIONS. You are subject to federal income
tax at ordinary income tax rates on any dividends you receive that are derived
from investment company taxable income. Distributions of net capital gain (the
excess of net long-term capital gain over net short-term capital loss) are
taxable to you as long-term capital gains, regardless of how long you have held
your Fund shares. The Funds' distributions are taxable in the year they are
paid, whether they are taken in cash or reinvested in additional shares, except
that certain distributions declared in the last three months of the year and
paid in January are taxable as if paid on December 31. Most state laws provide
a pass-through of the state and local income tax exemption afforded owners of
direct U.S. government obligations. You will be notified annually of the
percentage of a Fund's income that is derived from U.S. government securities.

If a Fund's dividends exceed its investment company taxable income (consisting
generally of net investment income, net short-term capital gain, and net gains
from certain foreign currency transactions, if any) in any year, as a result of
currency-related losses or otherwise, all or a portion of those dividends may
be treated as a return of capital to shareholders for tax purposes.

YEAR-END TAX REPORTING. After the end of each calendar year, you will receive a
statement (Form 1099) of the federal income tax status of all dividends and
other distributions paid (or deemed paid) during the year.

SHARES SOLD OR EXCHANGED. Your redemption of Fund shares may result in taxable
gain or loss to you, depending upon whether the redemption proceeds payable to
you are more or less than your adjusted cost basis for the redeemed shares.
Similar tax consequences generally will result from an exchange of Fund shares
for shares of another Strong Fund. If you purchase shares of a Fund within
thirty days before or after redeeming shares of the same Fund at a loss, a
portion or all of that loss will not be deductible and will increase the cost
basis of the newly purchased shares. If you redeem out of a retirement account,
you will be subject to withholding for federal income tax purposes unless you
transfer the distribution directly to an "eligible retirement plan." In
addition, if you redeem all shares in an account at any time during a month,
dividends credited to the account since the beginning of the month through the
day of redemption will be paid with the redemption proceeds.

TAX STATUS OF THE FUNDS. Each Fund intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Internal Revenue
Code and, if so qualified, will not be liable for federal income tax on
earnings and gains distributed to its shareholders in a timely manner. To do
so, each Fund distributes substantially all of its net investment income
monthly and net realized capital gains (after using any available capital loss
carryover) annually.

PERFORMANCE INFORMATION
Each Fund may advertise "yield," "average annual total return," "total return,"
and "cumulative total return." The Treasury Money and Money Market Funds may
also advertise "effective yield." Each of these figures is based upon
historical results and is not necessarily representative of the future
performance of a Fund.

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Yield is an annualized figure, which means that it is assumed that a Fund
generates the same level of net investment income over a one-year period. The
Treasury Money and Money Market Funds' yield and effective yield are measures
of the net investment income per share earned by such Fund over a specific
seven-day period and are shown as a percentage of the investment. However,
effective yield will be slightly higher than the yield because effective yield
assumes that the net investment income earned by a Fund will be reinvested. The
Advantage, Short-Term Bond, Government, and Corporate Bond Funds' yield is a
measure of the net investment income per share earned by a Fund over a specific
one-month period and is shown as a percentage of the net asset value of the
Fund's shares at the end of the period.

Average annual total return and total return figures measure both the net
investment income generated by, and the effect of any realized and unrealized
appreciation or depreciation of, the underlying investments in a Fund assuming
the reinvestment of all dividends and distributions. Total return figures are
not annualized and simply represent the aggregate change of a Fund's
investments over a specified period of time.

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SHAREHOLDER MANUAL

<TABLE>
<S> <C>
HOW TO BUY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . II-0
DETERMINING YOUR SHARE PRICE . . . . . . . . . . . . . . . . . . . . II-0
HOW TO SELL SHARES . . . . . . . . . . . . . . . . . . . . . . . . . II-0
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . II-0
REGULAR INVESTMENT PLANS . . . . . . . . . . . . . . . . . . . . . . II-0
SPECIAL SITUATIONS . . . . . . . . . . . . . . . . . . . . . . . . . II-0
</TABLE>

HOW TO BUY SHARES
All the Strong Funds are 100% no-load, meaning you may purchase, redeem, or
exchange shares directly at net asset value without paying a sales charge.
Because the Advantage, Short-Term Bond, Government Securities and Corporate
Bond Funds' net asset values change daily, your purchase price will be the next
net asset value determined after Strong receives and accepts your purchase
order. Your money will begin earning dividends the day after your purchase
order is accepted in proper form.

Whether you are opening a new account or adding to an existing one, Strong
provides you with several methods to buy Fund shares.

<PAGE> 30

<TABLE>
<CAPTION>
TO OPEN A NEW ACCOUNT TO ADD TO AN EXISTING ACCOUNT
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MAIL BY CHECK BY CHECK
- Complete and sign the application. Make your check or - Complete an Additional Investment Form
money order payable to "The Strong Funds." provided at the bottom of your account
statement, or write a note indicating your
fund account number and registration. Make
your check or money order payable to
"The Strong Funds."

- Mail to The Strong Funds, P.O. Box 2936, Milwaukee, - Mail to The Strong Funds, P.O. Box 2936,
Wisconsin 53201. If you're using an express delivery Milwaukee, Wisconsin 53201. If you're using
service, send to The Strong Funds, 100 Heritage Reserve, an express delivery service, send to The
Menomonee Falls, Wisconsin 53051. Strong Funds, 100 Heritage Reserve, Menomonee
Falls, Wisconsin 53051.

BY EXCHANGE BY EXCHANGE
- Call 1-800-368-3863 for instructions on establishing - Call 1-800-368-3863 for instructions on
an account with an exchange by mail. exchanging by mail.

TELEPHONE BY EXCHANGE BY EXCHANGE
- Call 1-800-368-3863 to establish a new account by - Add to an account by exchanging funds from
1-800-368-3863 exchanging funds from an existing Strong Funds account. another Strong Funds account.

- Sign up for telephone exchange services when you open - Sign up for telephone exchange services when
24 HOURS A DAY, your account. To add the telephone exchange option to you open your account. To add the telephone
7 DAYS A WEEK your account, call 1-800-368-3863 for a Telephone exchange option to your account call
Exchange Form. 1-800-368-3863 for a Telephone Exchange Form.

- Please note that your accounts must be identically - Please note that the accounts must be
registered and that you must exchange enough into the identically registered and that the minimum
new account to meet the minimum initial investment. exchange is $50 or the balance of your
account whichever is less.

BY TELEPHONE PURCHASE
- Complete the Request for Telephone Purchase
Form at the back of this Prospectus to make
additional investments from $50 to $25,000
into your Strong Funds account by telephone.

IN PERSON Stop by our Investor Center in Menomonee Falls, Stop by our Investor Center in Menomonee Falls,
Wisconsin. Call 1-800-368-3863 for hours and Wisconsin. Call 1-800-368-3863 for hours and
directions. directions.

The Investor Center can only accept checks or money The Investor Center can only accept checks or
orders. money orders.

WIRE Call 1-800-368-3863 for instructions on opening an Call 1-800-368-3863 for instructions on adding
account by wire. to an account by wire.

II-2
</TABLE>
<PAGE> 31

<TABLE>

<S> <C> <C>
AUTOMATICALLY USE STRONG'S "NO-MINIMUM INVESTMENT PROGRAM." USE ONE OF STRONG'S AUTOMATIC INVESTMENT PROGRAMS.
- If you sign up for Strong's Automatic Investment Sign up for these services when you open your account,
Plan when you open your account, Strong Funds or call 1-800-368-3863 for instructions on how to add
will waive the Fund's minimum initial investment them to your existing account.
(see chart below).
- AUTOMATIC INVESTMENT PLAN. Make regular, systematic
- Complete both the Automatic Investment Plan investments (minimum $50) into your Strong Funds
application at the back of this Prospectus and account from your bank checking or NOW account. We've
the new account application. included an application at the back of this
Prospectus.
- Mail to the address indicated on the application.
- AUTOMATIC EXCHANGE PLAN. Make regular, systematic
exchanges (minimum $50) from one Strong Funds
account to another. Call 1-800-368-3863 for an
application.

- PAYROLL DIRECT DEPOSIT. Have a specified amount
(minimum $50) regularly deducted from your paycheck,
social security check, military allotment, or annuity
payment invested directly into your Strong Funds
account. Call 1-800-368-3863 for an application.

- AUTOMATIC DIVIDEND REINVESTMENT. Unless you choose
otherwise, all your dividends and capital gains
distributions will be automatically reinvested in
additional Fund shares. Or, you may elect to have
your dividends and capital gains distributions
automatically invested in shares of another Strong
Fund.

BROKER-DEALER - You may purchase shares in a Fund through a - You may purchase additional shares in a Fund through
broker-dealer or other institution that may a broker-dealer or other institution that may charge
charge a transaction fee. a transaction fee.

- Strong Funds may only accept requests to - Strong Funds may only accept requests to purchase
purchase shares into a broker-dealer street additional shares into a broker-dealer street name
name account from the broker-dealer. account from the broker-dealer.

</TABLE>

II-3
<PAGE> 32

WHAT YOU SHOULD KNOW ABOUT BUYING SHARES

- Please make all checks or money orders payable to "The
Strong Funds."

- We cannot accept third-party checks or checks drawn on
banks outside the U.S..

- You will be charged a $20 service fee for each check,
wire, or Electronic Funds Transfer ("EFT") purchase that
is returned unpaid, and you will be responsible for any
losses suffered by a Fund as a result.

- Further documentation may be requested from corporations,
executors, administrators, trustees, guardians, agents, or
attorneys-in-fact.

- A Fund may decline to accept your purchase order upon
receipt when, in the judgment of the Advisor, it would not
be in the best interests of the existing shareholders.

- The exchange privileges are available in all 50 states
because all the Strong Funds intend to continue to qualify
their shares for sale in all 50 states.

- Minimum Investment Requirements:

<TABLE>
<S> <C>
To open a regular account $1,000
To open an IRA, Defined Contribution, or UGMA/UTMA account $ 250
To open a 401(k) or 403(b) retirement account No Minimum
To add to an existing account $ 50
</TABLE>

The Funds offer a No-Minimum Investment Program that waives the
minimum initial investment requirements for investors who participate
in the Strong Automatic Investment Plan (described on page II-9).
Unless you participate in the Strong No-Minimum Investment Program,
please ensure that your purchases meet the minimum investment
requirements.

Under certain circumstances (for example, if you discontinue a
No-Minimum Investment Program before you reach a Fund's minimum
initial investment, or if, after you reach a Fund's minimum, you
reduce your balance to less than $500), each Fund reserves the right
to close your account. Before taking such action, a Fund will provide
you with written notice and at least 60 days in which to reinstate an
investment program or otherwise reach the minimum initial investment
required.

WHAT YOU SHOULD KNOW ABOUT BUYING SHARES THROUGH A BROKER-DEALER

- If you purchase shares through a program of services
offered or administered by a broker-dealer, financial
institution, or other service provider, you should read
the program materials, including information relating to
fees, in connection with a Fund's Prospectus. Certain
features of a Fund may not be available or may be modified
in connection with the program of services provided.

- Certain broker-dealers, financial institutions, or other
service providers that have entered into an agreement with
the Distributor may enter purchase orders on behalf of
their customers by phone, with payment to follow within
several days as specified

II-4
<PAGE> 33

in the agreement. The Funds may effect such purchase
orders at the net asset value next determined after receipt
of the telephone purchase order. It is the responsibility of
the broker-dealer, financial institution, or other service
provider to place the order with the Funds on a timely
basis. If payment is not received within the time specified
in the agreement, the broker-dealer, financial institution,
or other service provider could be held liable for any
resulting fees or losses.

DETERMINING YOUR SHARE PRICE
Generally, when you make any purchases, sales, or exchanges, the price
of your shares will be the net asset value ("NAV") next determined
after Strong Funds receives your request in proper form. If Strong
Funds receives such request prior to the close of the New York Stock
Exchange (the "Exchange") on a day on which the Exchange is open, your
share price will be the NAV determined that day. The NAV for each Fund
is normally determined as of 3:00 p.m. Central Time ("CT") each day
the Exchange is open. The Funds reserve the right to change the time
at which purchases, redemptions, and exchanges are priced if the
Exchange closes at a time other than 3:00 p.m. CT or if an emergency
exists. Each Fund's NAV is calculated by taking the fair value of a
Fund's total assets, subtracting all its liabilities, and dividing by
the total number of shares outstanding. Expenses are accrued and
applied daily when determining the net asset value.

With respect to the Advantage, Short-Term Bond, Government Securities,
and Corporate Bond Funds, debt securities are valued by a pricing
service that utilizes electronic data processing techniques to
determine values for normal institutional size trading units of debt
securities without regard to the existence of sale or bid prices when
such values are believed to more accurately reflect the fair market
value of such securities. Otherwise, sale or bid prices are used. Any
securities or other assets for which market quotations are not readily
available are valued at fair value as determined in good faith by the
Board of Directors. Debt securities having remaining maturities of 60
days or less when purchased are valued by the amortized cost method
when the Board of Directors determines that the fair value of such
securities is their amortized cost.

The securities in the portfolios of the Treasury Money and Money
Market Funds are valued on an amortized-cost basis. Under this method
of valuation, a security is initially valued at its acquisition cost,
and thereafter, amortization of any discount or premium is assumed
each day, regardless of the impact of fluctuating interest rates on
the market value of the instrument. Under most conditions, management
believes it will be possible to maintain the net asset value of these
Funds at $1.00 per share. Calculations are periodically made to
compare the value of a Fund's portfolio valued at amortized cost with
market values. If a deviation of 1/2 of 1% or more were to occur
between the net asset value calculated by reference to market values
and a Fund's $1.00 per share net asset value, or if there were any
other deviation that the Board of Directors believed would result in a
material dilution to shareholders or purchasers, the Board of
Directors would promptly consider what action, if any, should be
initiated.

HOW TO SELL SHARES
You can access the money in your account at any time by selling
(redeeming) some or all of your shares back to the Fund. Once your
redemption request is received in proper form, Strong
will normally mail you the proceeds the next business day and, in any
event, no later than seven days thereafter.

II-5
<PAGE> 34

To redeem shares, you may use any of the methods described in the
chart below. However, if you are selling shares in a retirement
account, please call 1-800-368-3863 for instructions. Please note that
there is a $10.00 fee for closing an IRA or other retirement account
or for transferring assets to another custodian. For your protection,
certain requests may require a signature guarantee.

II-6
<PAGE> 35

<TABLE>
<CAPTION>
TO SELL SHARES
<S> <C>
MAIL FOR INDIVIDUAL, JOINT TENANT, AND UGMA/UTMA ACCOUNTS
Write a "letter of instruction" that includes the
following information: your account number, the
dollar amount or number of shares you wish to
redeem, each owner's name, your street address, and
the signature of each owner as it appears on the
account.

Mail to The Strong Funds, P.O. Box 2936, Milwaukee,
Wisconsin 53201. If you're using an express
delivery service, send to 100 Heritage Reserve,
Menomonee Falls, Wisconsin 53051.

FOR TRUST ACCOUNTS
Same as above. Please ensure that all trustees sign
the letter of instruction.

FOR OTHER REGISTRATIONS
- Call 1-800-368-3863 for instructions.

TELEPHONE Sign up for telephone redemption services when you
open your account by checking the "Yes" box in the
1-800-368-3863 appropriate section of the account application. To
add the telephone redemption option to your
account, call 1-800-368-3863 for a Telephone
24 HOURS A DAY, Redemption Form.
7 DAYS A WEEK
Once the telephone redemption option is in place,
you may sell shares ($500 minimum) by phone and
arrange to receive the proceeds in one of three
ways:

TO RECEIVE A CHECK BY MAIL
At no charge, we will mail a check to the address
to which your account is registered.

TO DEPOSIT BY EFT
At no charge, we will transmit the proceeds by
Electronic Funds Transfer (EFT) to a pre-authorized
bank account. Usually, the funds will arrive at
your bank two banking days after we process your
redemption.

TO DEPOSIT BY WIRE
For a $10 fee, we will transmit the proceeds by
wire to a pre-authorized bank account. Usually, the
funds will arrive at your bank the next banking day
after we process your redemption.

</TABLE>

II-7
<PAGE> 36

CHECK WRITING Sign up for the free check-writing privilege when
you open your account. To add check writing to an
existing account or to order additional checks,
call 1-800-368-3863.

- Please keep in mind that all check redemptions
must be for a minimum of $500 and that you cannot
write a check to close an account.

AUTOMATICALLY You can set up automatic withdrawals from your
account at regular intervals. To establish the
Systematic Withdrawal Plan, request a form by
calling 1-800-368-3863.
BROKER-DEALER You may also redeem shares through broker-dealers
or others who may charge a commission or other
transaction fee.

WHAT YOU SHOULD KNOW ABOUT SELLING SHARES

- If you have recently purchased shares, please be aware
that your redemption request may not be honored until the
purchase check has cleared your bank, which generally
occurs within ten calendar days.

- The right of redemption may be suspended during any period
when (i) trading on the Exchange is restricted, as
determined by the SEC, or the Exchange is closed for other
than weekends and holidays; (ii) the SEC has permitted
such suspension by order; or (iii) an emergency as
determined by the SEC exists, making disposal of portfolio
securities or valuation of net assets of a Fund not
reasonably practicable.

- If you are selling shares you hold in certificate form,
you must submit the certificates with your redemption
request. Each registered owner must endorse the
certificates and all signatures must be guaranteed.

- Further documentation may be requested from corporations,
executors, administrators, trustees, guardians, agents, or
attorneys-in-fact.

WHAT YOU SHOULD KNOW ABOUT TELEPHONE REDEMPTIONS

- The Funds reserve the right to refuse a telephone
redemption if they believe it advisable to do so.

- Once you place your telephone redemption request, it
cannot be canceled or modified.

- Investors will bear the risk of loss from fraudulent or
unauthorized instructions received over the telephone
provided that the Fund reasonably believes that such
instructions are genuine. The Funds and their transfer
agent employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. The
Funds may incur liability if they do not follow these
procedures.

- Because of increased telephone volume, you may experience
difficulty in implementing a telephone redemption during
periods of dramatic economic or market changes.

SHAREHOLDER SERVICES

II-8
<PAGE> 37

INFORMATION SERVICES

24-HOUR ASSISTANCE. Strong Funds has registered representatives
available to help you 24 hours a day, 7 days a week. Call 1-
414-359-1400 or toll-free 1-800-368-3863. You may also write to the
Strong Funds at the address on the cover of this Prospectus.

STATEMENTS AND REPORTS. At a minimum, each Fund will confirm all
transactions for your account on a quarterly basis. We recommend that
you file each quarterly statement -- and, especially, each calendar
year-end statement -- with your other important financial papers,
since you may need to refer to them at a later date for tax purposes.
Should you need additional copies of previous statements, you may
order confirmation statements for the current and preceding year at no
charge. Statements for earlier years are available for $10 each. Call
1-800-368-3863 to order past statements.

Each year, you will also receive a statement confirming the tax status
of any distributions paid to you, as well as a semi-annual report and
an annual report containing audited financial statements.

To reduce the volume of mail you receive, only one copy of certain
materials, such as prospectuses and shareholder reports, is mailed to
your household. Call 1-800-368-3863 if you wish to receive additional
copies, free of charge.

More complete information regarding each Fund's investment policies
and services is contained in its Statement of Additional Information,
which you may request by calling or writing the Strong Funds at the
phone number and address on the cover of this Prospectus.

CHANGING YOUR ACCOUNT INFORMATION. So that you continue receiving your
Strong correspondence, including any dividend checks and statements,
please notify us in writing as soon as possible if your address
changes. You may use the Additional Investment Form at the bottom of
your confirmation statement, or simply write us a letter of
instruction that contains the following information:

1. a written request to change the address,
2. the account number(s) for which the address is to be
changed,
3. the new address, and
4. the signatures of all owners of the accounts.

Please send your request to the address on the cover of this
Prospectus.

Changes to an account's registrations -- such as adding or removing a
joint owner, changing an owner's name, or changing the type of your
account -- must also be submitted in writing. Please call
1-800-368-3863 for instructions. For your protection, some requests
may require a signature guarantee.

II-9
<PAGE> 38

TRANSACTION SERVICES

FREE EXCHANGE PRIVILEGE. You may exchange shares between identically
registered Strong Funds accounts, either in writing or by telephone.
By establishing the telephone exchange services, you authorize the
Fund and its agents to act upon your instruction by telephone to
redeem or exchange shares from any account you specify. Please obtain
and read the appropriate Prospectus before investing in any of the
Strong Funds. Since an excessive number of exchanges may be
detrimental to the Funds, each Fund reserves the right to discontinue
the exchange privilege of any shareholder who makes more than five
exchanges in a year or three exchanges in a calendar quarter.

FREE CHECK-WRITING PRIVILEGES. You may also redeem shares by check in
amounts of $500 or more. There is no charge for this privilege.
Redemption by check cannot be honored if share certificates are
outstanding and would need to be liquidated to honor the check. Checks
are supplied free of charge, and additional checks will be sent to you
upon request. The Funds do not return the checks you write, although
copies are available upon request.

You may place stop-payment requests on checks by calling the Strong
Funds at 1-800-368-3863. A $10 fee will be charged for each
stop-payment request. A stop payment will remain in effect for two
weeks following receipt of oral instructions (six months following
written instructions) by Strong Funds.

If there are insufficient cleared shares in your account to cover the
amount of your redemption by check, the check will be returned, marked
"insufficient funds," and a fee of $10 will be charged to the account.

REGULAR INVESTMENT PLANS

The Strong Funds' Automatic Investment Plan, Payroll Direct Deposit
Plan, and Automatic Exchange Plan, all discussed below, are methods of
implementing DOLLAR COST AVERAGING. Dollar cost averaging is an
investment strategy that involves investing a fixed amount of money at
a regular time interval. By always investing the same set amount, you
will be purchasing more shares when the price is low and fewer shares
when the price is high. Ultimately, by using this principle in
conjunction with fluctuations in share price, your average cost per
share may be less than the average transaction price. A program of
regular investment cannot ensure a profit or protect against a loss
during declining markets. Since such a program involves continuous
investment regardless of fluctuating share values, you should consider
your ability to continue the program through periods of both low and
high share-price levels.

AUTOMATIC INVESTMENT PLAN. The Automatic Investment Plan allows you to
make regular, systematic investments in a Fund from your bank checking
or NOW account. You may choose to make investments on any day of the
month in amounts of $50 or more. You can set up the Automatic
Investment Plan with any financial institution that is a member of the
Automated Clearing House. Because each Fund has the right to close an
investor's account for failure to reach the minimum initial
investment, please consider your ability to continue this Plan until
you reach the minimum initial investment. Such closing may occur in
periods of declining share prices. To establish the Plan, complete the
application at the back of this Prospectus, or call 1-800-368- 3863.

PAYROLL DIRECT DEPOSIT PLAN. Once you meet a Fund's minimum initial
investment requirement, you may purchase additional Fund shares
through the Payroll Direct Deposit Plan. Through this Plan, periodic
investments (minimum $50) are made automatically

II-10
<PAGE> 39

from your payroll check into your existing Fund account. By enrolling
in the Plan, you authorize your employer or its agents to deposit a
specified amount from your payroll check into the Fund's bank account.
In most cases, your Fund account will be credited the day after the
amount is received by the Fund's bank. In order to participate in
the Plan, your employer must have direct deposit capabilities through
Automated Clearing House available to its employees. The Plan may be
used for other direct deposits, such as social security checks,
military allotments, and annuity payments.

To establish a Direct Deposit for your account, call 1-800-368-3863 to
obtain an Authorization for Payroll Direct Deposit to a Strong Funds
Account form. Once the Plan is established, you may alter the amount
of the deposit, alter the frequency of the deposit, or terminate your
participation in the program by notifying your employer.

AUTOMATIC EXCHANGE PLAN. The Automatic Exchange Plan allows you to
make regular, systematic exchanges (minimum $50) from one Strong Funds
account into another Strong Funds account. By setting up the Plan, you
authorize the Fund and its agents to redeem a set dollar amount or
number of shares from the first account and purchase shares of a
second Strong Fund. In addition, you authorize a Fund and its agents
to accept telephone instructions to change the dollar amount and
frequency of the exchange. An exchange transaction is a sale and
purchase of shares for federal income tax purposes and may result in a
capital gain or loss. To establish the Plan, request a form by calling
1-800-368-3863.

To participate in the Automatic Exchange Plan, you must have an
initial account balance of $2,500 in the first account and at least
the minimum initial investment in the second account. Exchanges may be
made on any day or days of your choice. If the amount remaining in the
first account is less than the exchange amount you requested, then the
remaining amount will be exchanged. At such time as the first account
has a zero balance, your participation in the Plan will be terminated.
You may also terminate the Plan at any time by calling or writing to
the Fund. Once participation in the Plan has been terminated for any
reason, to reinstate the Plan you must do so in writing; simply
investing additional funds will not reinstate the Plan.

SYSTEMATIC WITHDRAWAL PLAN. You can set up automatic withdrawals from
your account at regular intervals. To begin distributions, you must
have an initial balance of $5,000 in your account and withdraw at
least $50 per payment. To establish the Systematic Withdrawal Plan,
request a form by calling 1-800-368-3863. Depending upon the size of
the account and the withdrawals requested (and fluctuations in net
asset value of the shares redeemed), redemptions for the purpose of
satisfying such withdrawals may reduce or even exhaust the account. If
the amount remaining in the account is not sufficient to meet a
payment, the remaining amount will be redeemed and the Plan will be
terminated.

SPECIAL SITUATIONS

POWER OF ATTORNEY. If you are investing as attorney-in-fact for another
person, please complete the account application in the name of such
person and sign the back of the application in the following form:
"[applicant's name] by [your name], attorney-in-fact." To avoid having
to file an affidavit prior to each transaction, please complete the
Power of Attorney form available from Strong Funds at 1-800-368-3863.
However, if you would like to use your own power of attorney form,
please call the same number for instructions.

II-11
<PAGE> 40

CORPORATIONS AND TRUSTS. If you are investing for a corporation,
please include with your account application a certified copy of your
corporate resolution indicating which officers are authorized to act
on behalf of the corporation. As an alternative, you may complete a
Certification of Authorized Individuals form, which can be obtained
from the Funds. Until a valid corporate resolution or Certification of
Authorized Individuals is received by the Fund, services such as
telephone redemption, wire redemption, and check writing will not be
established.

If you are investing as a trustee, please include the date of the
trust. All trustees must sign the application. If they do not,
services such as telephone redemption, wire redemption, and check
writing will not be established. All trustees must sign redemption
requests unless proper documentation to the contrary is provided to
the Fund. Failure to provide these documents, or signatures as
required, when you invest may result in delays in processing
redemption requests.

SIGNATURE GUARANTEES. A signature guarantee is designed to protect you
and the Funds against fraudulent transactions by unauthorized persons.
In the following instances, the Funds will require a signature
guarantee for all authorized owners of an account:

- when you add the telephone redemption or check writing
options to your existing account;
- if you transfer the ownership of your account to another
individual or organization;
- when you submit a written redemption request for more than
$25,000;
- when you request to redeem or redeposit shares that have
been issued in certificate form;
- if you open an account and later decide that you want
certificates;
- when you request that redemption proceeds be sent to a
different name or address than is registered on your
account;
- if you add/change your name or add/remove an owner on your
account; and
- if you add/change the beneficiary on your transfer on
death account.

A signature guarantee may be obtained from any eligible guarantor
institution, as defined by the SEC. These institutions include banks,
savings associations, credit unions, brokerage firms, and others.
PLEASE NOTE THAT A NOTARY PUBLIC STAMP OR SEAL IS NOT ACCEPTABLE.

II-12
<PAGE> 41

APPENDIX A

Ratings of Debt Securities:

<TABLE>
<CAPTION>
MOODY'S STANDARD & FITCH
INVESTORS POOR'S INVESTORS
SERVICE, INC. CORPORATION SERVICE, INC. DEFINITION
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM Aaa AAA AAA Highest quality
Aa AA AA High quality
A A A Upper medium grade
Baa BBB BBB Medium grade
Ba BB BB Low grade
B B B Speculative
Caa, Ca, C CCC, CC, C CCC, CC, C Submarginal
D D DDD, DD, D Probably in default

<CAPTION>
MOODY'S S&P FITCH
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM MIG1/VMIG1 Best quality SP-1+ Very strong F-1+ Exceptionally
quality strong quality

MIG2/VMIG2 High quality SP-1 Strong quality F-1 Very strong quality
MIG3/VMIG3 Favorable SP-2 Satisfactory F-2 Good credit quality
quality grade
MIG4/VMIG4 Adequate quality F-3 Fair credit quality
SG Speculative grade SP-3 Speculative grade F-S Weak credit quality
COMMERCIAL P-1 Superior quality A-1+ Extremely strong F-1+ Exceptionally
PAPER quality strong quality
A-1 Strong quality F-1 Very strong quality
P-2 Strong quality A-2 Satisfactory F-2 Good credit quality
quality
P-3 Acceptable quality A-3 Adequate quality F-3 Fair credit quality
B Speculative F-S Weak credit quality
quality
Not Prime C Doubtful quality D Default

</TABLE>

A-1
<PAGE> 42

Explanation of Quality Ratings:

BOND
RATING EXPLANATION
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MOODY'S Aaa Highest quality, smallest degree of investment risk.
INVESTORS
SERVICE, Aa High quality; together with Aaa bonds, they compose the high-grade bond
INC. group.
A Upper medium-grade obligations; many favorable investment attributes.
Baa Medium-grade obligations; neither highly protected nor poorly secured.
Interest and principal appear adequate for the present but certain
protective elements may be lacking or may be unreliable over any great
length of time.
Ba More uncertain, with speculative elements. Protection of interest and
principal payments not well safeguarded during good and bad times.
B Lack characteristics of desirable investment; potentially low assurance of
timely interest and principal payments or maintenance of other contract
terms over time.
Caa Poor standing, may be in default; elements of danger with respect to
principal or interest payments.
Ca Speculative in a high degree; could be in default or have other marked
shortcomings.
C Lowest-rated; extremely poor prospects of ever attaining investment
standing.
STANDARD & AAA Highest rating; extremely strong capacity to pay principal and interest.
POOR'S AA High quality; very strong capacity to pay principal and interest.
CORP. A Strong capacity to pay principal and interest; somewhat more susceptible to
the adverse effects of changing circumstances and economic conditions.
BBB Adequate capacity to pay principal and interest; normally exhibit adequate
protection parameters, but adverse economic conditions or changing
circumstances more likely to lead to a weakened capacity to pay principal
and interest than for higher-rated bonds.
BB, B, Predominantly speculative with respect to the issuer's capacity to meet
CCC, required interest and principal payments. BB - lowest degree of
CC, C speculation; C - the highest degree of speculation. Quality and protective
characteristics outweighed by large uncertainties or major risk exposure to
adverse conditions.
CI No interest being paid.
D In default.
FITCH AAA Highest quality; obligor has exceptionally strong ability to pay interest
INVESTORS and repay principal, which is unlikely to be affected by reasonably
SERVICE, foreseeable events.
INC. AA Very high quality; obligor's ability to pay interest and repay principal is
very strong. Because bonds rated in the AAA and AA categories are not
significantly vulnerable to foreseeable future developments, short-term
debt of these issuers is generally rated F-1+.
A High quality; obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than higher-rated bonds.
BBB Satisfactory credit quality; obligor's ability to pay interest and repay
principal is considered adequate. Unfavorable changes in economic
conditions and circumstances are more likely to adversely affect these
bonds and impair timely payment. The likelihood that the ratings of these
bonds will fall below investment grade is higher than for higher-rated
bonds.
BB, B, Not investment-grade; predominantly speculative with respect to the
CCC, issuer's capacity to repay interest and repay principal in accordance with
CC, C the terms of the obligation for bond issues not in default. BB is least
speculative. C is the most speculative.
DDD, Bonds are in default on interest and/or principal payments. DDD represents
DD, D the highest potential for recovery of these bonds, and D represents the
lowest potential for recovery.

</TABLE>

See the Appendix to the Funds' Statement of Additional
Information for a more complete description of ratings.

A-2
<PAGE> 43

APPENDIX B

<TABLE>
<CAPTION>
WEIGHTED AVERAGE RATINGS OF BONDS
- ----------------------------------------------------------------------------------------------------------------------
AVERAGE PERCENTAGE OF ASSETS HELD DURING 1994(1)
- ----------------------------------------------------------------------------------------------------------------------
ADVANTAGE(2) SHORT-TERM BOND CORPORATE BOND
- ----------------------------------------------------------------------------------------------------------------------
EQUIVALENT EQUIVALENT EQUIVALENT
S&P MOODY'S(4) RATED UNRATED(5) RATED UNRATED(5) RATED UNRATED(5)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AAA Aaa(6) % -- % -- % %
AA Aa -- -- --
A A -- -- --
BBB Baa --
BB Ba --
B B
CCC Caa -- -- -- -- -- --
CC Ca -- -- -- -- -- --
C C -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
TOTALS % % % % % %
- ----------------------------------------------------------------------------------------------------------------------

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF ASSETS HELD ON DECEMBER 31, 1994
- ----------------------------------------------------------------------------------------------------------------------
ADVANTAGE(2) SHORT-TERM BOND CORPORATE BOND
- ----------------------------------------------------------------------------------------------------------------------
EQUIVALENT EQUIVALENT EQUIVALENT
S&P MOODY'S(4) RATED UNRATED(5) RATED UNRATED(5) RATED UNRATED(5)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AAA Aaa(6) % -- % -- % --
AA Aa -- -- -- --
A A -- -- --
BBB Baa -- -- --
BB Ba -- --
B B % -- -- --
CCC Caa -- -- -- -- -- --
CC Ca -- -- -- -- -- --
C C -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
TOTALS % % % -- % %
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

B-1
<PAGE> 44

<TABLE>
<CAPTION>
WEIGHTED AVERAGE RATINGS OF CORPORATE COMMERCIAL PAPER
- --------------------------------------------------------------------------------------------------------------------
AVERAGE PERCENTAGE OF ASSETS HELD DURING 1994(1)
- --------------------------------------------------------------------------------------------------------------------
RATED
S&P MOODY'S(4) ADVANTAGE SHORT-TERM BOND CORPORATE BOND
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A1 P1(7) % % %
A2 P2(7)
A3 P3 -- -- --
TOTALS % % %

<CAPTION>
PERCENTAGE OF ASSETS HELD ON DECEMBER 31, 1994
- --------------------------------------------------------------------------------------------------------------------
RATED
S&P MOODY'S(4) ADVANTAGE SHORT-TERM BOND CORPORATE BOND
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A1 P1(7) % % %
A2 P2(7) --
A3 P3 -- -- --
TOTALS % % %

</TABLE>

1. Based on a weighted average of the securities held at the end of each
month. Investment grade bonds are those rated in one of the four highest
categories by a nationally recognized rating organization, and investment
grade commercial paper is commercial paper rated in one of the top three
categories by such organizations. See "Fundamentals of Fixed-Income
Investing" in this Prospectus for a discussion of the risks associated
with non-investment grade fixed-income securities and the Statements of
Additional Information for a description of credit ratings. The Appendix
does not contain information on the Treasury Money, Money, and Government
Securities Funds because these Funds may not invest in non-investment
grade fixed-income securities.

2. Effective June 15, 1994, the Board of Directors increased the Fund's
authorization to invest in non-investment grade BB fixed-income
securities from 20% to 25% of its total assets.

3. A security rated differently by the rating services is included in the
category representing the higher of the ratings assigned to the security.

4. This category represents the comparable quality of unrated securities,
as determined by the Advisor.

5. Includes all U.S. government obligations.

6. Includes commercial paper rated in an equivalent category by either
D&P or Fitch.

B-2
<PAGE> 45

CUSTODIAN
Firstar Trust Company
P.O. Box 701, Milwaukee, Wisconsin 53201

TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT

Strong Capital Management, Inc.

P.O. Box 2936, Milwaukee, Wisconsin 53201

AUDITORS

Coopers & Lybrand L.L.P.

411 East Wisconsin Avenue, Milwaukee, Wisconsin 53202

LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202

INVESTMENT ADVISOR

Strong Capital Management, Inc.

P.O. Box 2936, Milwaukee, Wisconsin 53201

DISTRIBUTOR
Strong Funds Distributors, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
<PAGE> 46

STATEMENT OF ADDITIONAL INFORMATION

STRONG U.S. TREASURY MONEY FUND, INC.
STRONG MONEY MARKET FUND, INC.
STRONG ADVANTAGE FUND, INC.
STRONG SHORT-TERM BOND FUND, INC.
STRONG GOVERNMENT SECURITIES FUND, INC.
STRONG CORPORATE BOND FUND, INC.

P.O. Box 2936
Milwaukee, Wisconsin 53201
Telephone: (414) 359-1400
Toll-Free: (800) 368-3863

This Statement of Additional Information is not a prospectus and
should be read in conjunction with the Prospectus of Strong U.S. Treasury
Money Fund, Inc. (the "Treasury Fund"), Strong Money Market Fund, Inc. (the
"Money Fund"), (the Treasury Fund and Money Fund are hereinafter collectively
referred to as the "Money Market Funds"), Strong Advantage Fund, Inc. (the
"Advantage Fund"), Strong Short-Term Bond Fund, Inc. (the "Short-Term Bond
Fund"), Strong Government Securities Fund, Inc. (the "Government Fund"), and
Strong Corporate Bond Fund, Inc. (the "Corporate Bond Fund") (hereinafter
collectively referred to as the "Funds") dated May 1, 1995. Requests for copies
of the Prospectus should be made by writing to the Funds at P.O. Box 2936,
Milwaukee, Wisconsin 53201, Attention: Corporate Secretary, or by calling one
of the numbers listed above. The financial statements appearing in the Funds'
Annual Report, which accompanies this Statement of Additional Information, are
incorporated herein by reference.

This Statement of Additional Information is dated May 1, 1995.

<PAGE> 47

STRONG INCOME FUNDS

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
COMMON INVESTMENT POLICIES AND TECHNIQUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Illiquid Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
When-Issued Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Lending of Portfolio Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Variable- or Floating-Rate Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Mortgage- and Asset-Backed Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
INVESTMENT POLICIES AND TECHNIQUES -- MONEY MARKET FUNDS . . . . . . . . . . . . . . . . . . . . . 0
Maturity and Quality Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
INVESTMENT POLICIES AND TECHNIQUES -- ADVANTAGE, SHORT-TERM BOND,
GOVERNMENT SECURITIES, AND CORPORATE BOND FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . 0
European and American Depository Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Zero-Coupon, Step-Coupon and Pay-in-Kind Securities . . . . . . . . . . . . . . . . . . . . . 0
Derivative Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
High Yield (High Risk) Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Short Sales Against the Box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
DIRECTORS AND OFFICERS OF THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
INVESTMENT ADVISOR AND DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
PORTFOLIO TRANSACTIONS AND BROKERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
FUND ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
SHAREHOLDER MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
PORTFOLIO MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>

No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information and the Prospectus dated May 1, 1995 and, if given or made, such
information or representations may not be relied upon as having been authorized
by the Funds.

This Statement of Additional Information does not constitute an offer
to sell securities.
<PAGE> 48

INVESTMENT RESTRICTIONS

The investment objective of the Treasury and Money Funds is to seek
current income, a stable share price and daily liquidity. The investment
objective of the Advantage Fund is to seek current income with a very low
degree of share-price fluctuation. The investment objective of the Short-Term
Bond Fund is to seek total return by investing for a high level of current
income with a low degree of share-price fluctuation. The investment objective
of the Government Fund is to seek total return by investing for a high level of
current income with a moderate degree of share-price fluctuation. The
investment objective of the Corporate Bond Fund is to seek total return by
investing for a high level of current income with moderate degree of
share-price fluctuation. The Funds' investment objectives and policies are
described in detail in the Prospectus under the caption "Investment Objectives
and Policies." The following are the Funds' fundamental investment limitations
which cannot be changed without shareholder approval.

Each Fund:

<TABLE>
<S> <C>
1. May not with respect to 75% of its total assets, purchase the securities of any issuer (except securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities) if, as a result, (i) more than 5% of the Fund's
total assets would be invested in the securities of that issuer, or (ii) the Fund would hold more than 10% of the
outstanding voting securities of that issuer.

2. May (i) borrow money from banks and (ii) make other investments or engage in other transactions permissible under the
Investment Company Act of 1940 which may involve a borrowing, provided that the combination of (i) and (ii) shall not
exceed 33 1/3% of the value of the Fund's total assets (including the amount borrowed), less the Fund's liabilities (other
than borrowings), except that the Fund may borrow up to an additional 5% of its total assets (not including the amount
borrowed) from a bank for temporary or emergency purposes (but not for leverage or the purchase of investments). The
Fund may also borrow money from the other Strong Funds or other persons to the extent permitted by applicable law.

3. May not issue senior securities, except as permitted under the Investment Company Act of 1940.

4. May not act as an underwriter of another issuer's securities, except to the extent that the Fund may be deemed to be an
underwriter within the meaning of the Securities Act of 1933 in connection with the purchase and sale of portfolio
securities.

5. May not purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments
(but this shall not prevent the Fund from purchasing or selling options, futures contracts, or other derivative
instruments, or from investing in securities or other instruments backed by physical commodities).

6. May not make loans if, as a result, more than 33 1/3% of the Fund's total assets would be lent to other persons, except
through (i) purchases of debt securities or other debt instruments, or (ii) engaging in repurchase agreements.

7. May not purchase the securities of any issuer if, as a result, more than 25% of the Fund's total assets would be invested
in the securities of issuers, the principal business activities of which are in the same industry. With respect to the
Money Market Funds only, this limitation shall not limit the Funds' purchases of obligations issued by domestic banks.

8. May not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this
shall not prohibit the Fund from purchasing or selling securities or other instruments backed by real estate or of issuers
engaged in real estate activities).

9. May, notwithstanding any other fundamental investment policy or restriction, invest all of its assets in the securities
of a single open-end management investment company with substantially the same fundamental investment objective, policies,
and restrictions as the Fund.

</TABLE>

- 3 -
<PAGE> 49

The following are the Funds' non-fundamental operating policies which
may be changed by the Board of Directors of each Fund without shareholder
approval.

Each Fund may not:

<TABLE>
<S> <C>
1. Sell securities short, unless the Fund owns or has the right to obtain securities equivalent in kind and amount to the
securities sold short, or unless it covers such short sale as required by the current rules and positions of the SEC or
its staff, and provided that transactions in options, futures contracts, options on futures contracts, or other
derivative instruments are not deemed to constitute selling securities short.

2. Purchase securities on margin, except that the Fund may obtain such short-term credits as are necessary for the clearance
of transactions; and provided that margin deposits in connection with futures contracts, options on futures contracts, or
other derivative instruments shall not constitute purchasing securities on margin.

3. Invest in illiquid securities if, as a result of such investment, more than 15% (10% with respect to the Money Market
Funds) of its net assets would be invested in illiquid securities, or such other amounts as may be permitted under the
Investment Company Act of 1940.

4. Purchase securities of other investment companies except in compliance with the Investment Company Act of 1940 and
applicable state law.

5. Invest all of its assets in the securities of a single open-end investment management company with substantially the same
fundamental investment objective, restrictions and policies as the Fund.

6. Purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or
political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in the securities of
issuers that, including predecessor or unconditional guarantors, have a record of less than three years of continuous
operation. This policy does not apply to securities of pooled investment vehicles or mortgage or asset-backed
securities.

7. Invest in direct interests in oil, gas, or other mineral exploration programs or leases; however, the Fund may invest in
the securities of issuers that engage in these activities.

8. Engage in futures or options on futures transactions which are impermissible pursuant to Rule 4.5 under the Commodity
Exchange Act and, in accordance with Rule 4.5, will use futures or options on futures transactions solely for bona fide
hedging transactions (within the meaning of the Commodity Exchange Act), provided, however, that the Fund may, in addition
to bona fide hedging transactions, use futures and options on futures transactions if the aggregate initial margin and
premiums required to establish such positions, less the amount by which any such options positions are in the money (within
the meaning of the Commodity Exchange Act), do not exceed 5% of the Fund's net assets.

In addition, (i) the aggregate value of securities underlying call options on securities written by the Fund or obligations
underlying put options on securities written by the Fund determined as of the date the options are written will not exceed
50% of the Fund's net assets; (ii) the aggregate premiums paid on all options purchased by the Fund and which are being
held will not exceed 20% of the Fund's net assets; (iii) the Fund will not purchase put or call options, other than hedging
positions, if, as a result thereof, more than 5% of its total assets would be so invested; and (iv) the aggregate margin
deposits required on all futures and options on futures transactions being held will not exceed 5% of the Fund's total
assets.

9. Pledge, mortgage or hypothecate any assets owned by the Fund except as may be necessary in connection with permissible
borrowings or investments and then such pledging, mortgaging, or hypothecating may not exceed 33 1/3% of the Fund's total
assets at the time of the borrowing or investment.

10. Purchase or retain the securities of any issuer if any officer or director of the Fund or its investment advisor
beneficially owns more than 1/2 of 1% of the securities of such issuer and such officers and directors together own
beneficially more than 5% of the securities of such issuer.

</TABLE>

- 4 -
<PAGE> 50

<TABLE>
<S> <C>
11. Purchase warrants, valued at the lower of cost or market value, in excess of 5% of the Fund's net assets. Included in
that amount, but not to exceed 2% of the Fund's net assets, may be warrants that are not listed on the New York Stock
Exchange or the American Stock Exchange. Warrants acquired by the Fund in units or attached to securities are not subject
to these restrictions.

12. Borrow money except (i) from banks or (ii) through reverse repurchase agreements or mortgage dollar rolls, and will not
purchase securities when bank borrowings exceed 5% of its total assets.

13. Make any loans other than loans of portfolio securities, except through (i) purchases of debt securities or other debt
instruments, or (ii) engaging in repurchase agreements.

</TABLE>

Money Market Funds. In addition to the common non-fundamental restrictions
described above, the Money Market Funds may not engage in any transaction or
practice which is not permissible under Rule 2a-7 of the Investment Company Act
of 1940, notwithstanding any other fundamental investment limitation or
non-fundamental operating policy.

Corporate Bond Fund. Under normal market conditions, the Corporate Bond Fund
will invest at least 65% of its total assets in bonds. The Fund may invest up
to 35% of its total assets in dividend paying common stocks and up to 5% of its
total assets in warrants.

If a percentage restriction relating to a fundamental or
non-fundamental limitation is adhered to at the time of investment, a later
increase in percentage resulting from a change in market value of the
investment or the total assets will not constitute a violation of that
restriction. Except for the fundamental investment limitations listed above and
each Fund's investment objective, the other investment policies described in
the Prospectus and this Statement of Additional Information are not fundamental
and may be changed with approval of a Fund's Board of Directors.

COMMON INVESTMENT POLICIES AND TECHNIQUES

The following information supplements the discussion of the Funds'
investment objectives, policies and techniques that are described in detail in
the Prospectus under the captions "Investment Objectives and Policies" and
"Implementation of Policies and Risks." Investment policies and techniques
that are unique to the Money Market Funds, Advantage Fund, Short-Term Bond
Fund, Government Fund, or Corporate Bond Fund are discussed below.

ILLIQUID SECURITIES

The Funds may invest in illiquid securities (i.e., securities that are
not readily marketable). However, a Fund will not acquire illiquid securities
if, as a result, they would comprise more than 15%, or with respect to the
Money Market Funds, 10%, of the value of the Fund's net assets (or such other
amounts as may be permitted under the Investment Company Act). The Board of
Directors of each Fund, or its delegate, has the ultimate authority to
determine, to the extent permissible under the federal securities laws, which
securities are illiquid for purposes of this limitation. Certain securities
exempt from registration or issued in transactions exempt from registration
under the Securities Act of 1933, as amended (the "Securities Act"), including
securities that may be resold pursuant to Rule 144A under the Securities Act,
may be considered liquid. The Board of Directors of each Fund has delegated to
Strong Capital Management, Inc. (the "Advisor") the day-to-day determination
of the liquidity of a security, although it has retained oversight and ultimate
responsibility for such determinations. Although no definitive liquidity
criteria are used, the Board of Directors has directed the Advisor to look to
such factors as (i) the nature of the market for a security (including the
institutional private resale market), (ii) the terms of certain securities or
other instruments allowing for the disposition to a third party or the issuer
thereof (e.g., certain repurchase obligations and demand instruments), (iii)
the availability of market quotations (e.g., for securities quoted in PORTAL
system), and (iv) other permissible relevant factors.

Restricted securities may be sold only in privately negotiated
transactions or in a public offering with respect to which a registration
statement is in effect under the Securities Act. Where registration is
required, a Fund may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time of the decision
to sell and the time the Fund may be permitted to sell a security under an
effective registration statement. If, during such a period, adverse market
conditions were to develop, a Fund might obtain a less favorable price than
prevailed when it decided to sell. Restricted securities

- 5 -
<PAGE> 51

will be priced at fair value as determined in good faith by the Board of
Directors of each Fund. If through the appreciation of restricted securities
or the depreciation of unrestricted securities, a Fund should be in a position
where more than 15%, or with respect to the Money Market Funds, 10%, of the
value of its net assets are invested in illiquid securities, including
restricted securities which are not readily marketable, the Fund will take such
steps as is deemed advisable, if any, to protect liquidity.

WHEN-ISSUED SECURITIES

The Funds, other than the Treasury Fund, may from time to time
purchase securities on a "when-issued" basis. The price of debt securities
purchased on a when-issued basis, which may be expressed in yield terms, is
fixed at the time the commitment to purchase is made, but delivery and payment
for the securities take place at a later date. Normally, the settlement date
occurs within one month of the purchase. During the period between the
purchase and settlement, no payment is made by the Fund to the issuer and no
interest on debt securities 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 Funds intend to purchase such securities with the purpose
of actually acquiring them unless a sale appears desirable for investment
reasons. At the time a 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 Funds do not believe that
their respective net asset values or income will be adversely affected by its
purchases of securities on a when-issued basis.

The Funds will maintain cash and marketable securities equal in value
to commitments for when-issued securities. Such segregated securities either
will mature or, if necessary, be sold on or before the settlement date. When
the time comes to pay for when-issued securities, the Funds will meet their
respective obligations from then-available cash flow, sale of the securities
held in the separate account, described above, sale of other securities or,
although it would not normally expect to do so, from the sale of the
when-issued securities themselves (which may have a market value greater or
less than the respective Fund's payment obligation).

LENDING OF PORTFOLIO SECURITIES

Each Fund is authorized to lend up to 33 1/3% of the total value of
its portfolio securities to broker-dealers or institutional investors that the
Advisor deems qualified, but only when the borrower maintains with the Fund's
custodian bank collateral either in cash or money market instruments in an
amount at least equal to the market value of the securities loaned, plus
accrued interest and dividends, determined on a daily basis and adjusted
accordingly. [However, the Funds do not presently intend to engage in such
lending.] In determining whether to lend securities to a particular
broker-dealer or institutional investor, the Advisor will consider, and during
the period of the loan will monitor, all relevant facts and circumstances,
including the creditworthiness of the borrower. The Funds will retain
authority to terminate any loans at any time. The Funds may pay reasonable
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash or money market
instruments held as collateral to the borrower or placing broker. The Funds
will receive reasonable interest on the loan or a flat fee from the borrower
and amounts equivalent to any dividends, interest or other distributions on the
securities loaned. The Funds will retain record ownership of loaned securities
to exercise beneficial rights, such as voting and subscription rights and
rights to dividends, interest or other distributions, when retaining such
rights is considered to be in a Fund's interest.

VARIABLE- OR FLOATING-RATE SECURITIES

The Funds, other than the Treasury Fund, may invest in securities
which offer a variable- or floating-rate of interest. Variable-rate securities
provide for automatic establishment of a new interest rate at fixed intervals
(e.g., daily, monthly, semi-annually, etc.). Floating-rate securities provide
for automatic adjustment of the interest rate whenever some specified interest
rate index changes. The interest rate on variable- or floating-rate securities
is ordinarily determined by reference to or is a percentage of a bank's prime
rate, the 90-day U.S. Treasury bill rate, the rate of return on commercial
paper or bank certificates of deposit, an index of short-term interest rates,
or some other objective measure.

Variable- or floating-rate securities frequently include a demand
feature entitling the holder to sell the securities to the issuer at par. In
many cases, the demand feature can be exercised at any time on 7 days notice;
in other cases, the demand feature is exercisable at any time on 30 days notice
or on similar notice at intervals of not more than one year. Some securities
which do

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<PAGE> 52

not have variable or floating interest rates may be accompanied by puts
producing similar results and price characteristics. When considering the
maturity of any instrument which may be sold or put to the issuer or a third
party, each Fund may consider that instrument's maturity to be shorter than its
stated maturity. Any such determination by the Money Market Funds will be made
in accordance with Rule 2a-7.

Variable-rate demand notes include master demand notes which are
obligations that permit a Fund to invest fluctuating amounts, which may change
daily without penalty, pursuant to direct arrangements between a Fund, as
lender, and the borrower. The interest rates on these notes fluctuate from
time to time. The issuer of such obligations normally has a corresponding
right, after a given period, to prepay in its discretion the outstanding
principal amount of the obligations plus accrued interest upon a specified
number of days' notice to the holders of such obligations. The interest rate
on a floating-rate demand obligation is based on a known lending rate, such as
a bank's prime rate, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable-rate demand obligation is adjusted
automatically at specified intervals. Frequently, such obligations are secured
by letters of credit or other credit support arrangements provided by banks.
Because these obligations are direct lending arrangements between the lender
and borrower, it is not contemplated that such instruments will generally be
traded. There generally is not an established secondary market for these
obligations, although they are redeemable at face value. Accordingly, where
these obligations are not secured by letters of credit or other credit support
arrangements, a Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. Such obligations frequently
are not rated by credit rating agencies and, if not so rated, the Funds may
invest in them only if the Funds' Advisor determines that at the time of
investment the obligations are of comparable quality to the other obligations
in which the Funds may invest. The Advisor, on behalf of the Funds, will
consider on an ongoing basis the creditworthiness of the issuers of the
floating- and variable-rate demand obligations in the Funds' portfolio.

Each Fund will not invest more than 15%, or with respect to the Money
Market Funds, 10%, of its net assets in variable-and floating-rate demand
obligations that are not readily marketable (a variable- or floating-rate
demand obligation that may be disposed of on not more than seven days notice
will be deemed readily marketable and will not be subject to this limitation).
(See "Illiquid Securities" and "Investment Restrictions.") In addition, each
variable- or floating-rate obligation must meet the credit quality requirements
applicable to all the Fund's investments at the time of purchase. When
determining whether such an obligation meets a Fund's credit quality
requirements, the Fund may look to the credit quality of the financial
guarantor providing a letter of credit or other credit support arrangement.

In determining a Fund's weighted average portfolio maturity, a Fund
will consider a floating or variable rate security to have a maturity equal to
its stated maturity (or redemption date if it has been called for redemption),
except that it may consider (i) variable rate securities to have a maturity
equal to the period remaining until the next readjustment in the interest rate,
unless subject to a demand feature, (ii) variable rate securities subject to a
demand feature to have a remaining maturity equal to the longer of (a) the next
readjustment in the interest rate or (b) the period remaining until the
principal can be recovered through demand, and (iii) floating rate securities
subject to a demand feature to have a maturity equal to the period remaining
until the principal can be recovered through demand. Variable and floating
rate securities generally are subject to less principal fluctuation than
securities without these attributes since the securities usually trade at par
following the readjustment in the interest rate.

MORTGAGE- AND ASSET-BACKED SECURITIES

Mortgage-backed securities represent direct or indirect participations
in, or are secured by and payable from, mortgage loans secured by real
property, and include single- and multi-class pass-through securities and
collateralized mortgage obligations. Such securities may be issued or
guaranteed by U.S. government agencies or instrumentalities, such as the
Government National Mortgage Association and the Federal National Mortgage
Association, or by private issuers, generally originators and investors in
mortgage loans, including savings associations, mortgage bankers, commercial
banks, investment bankers, and special purpose entities (collectively, "private
lenders"). Mortgage-backed securities issued by private lenders may be
supported by pools of mortgage loans or other mortgage-backed securities that
are guaranteed, directly or indirectly, by the U.S. government or one of its
agencies or instrumentalities, or they may be issued without any governmental
guarantee of the underlying mortgage assets but with some form of
non-governmental credit enhancement.

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<PAGE> 53

revolving credit arrangements. Payments or distributions of principal and
interest on asset-backed securities may be supported by non-governmental
credit enhancements similar to those utilized in connection with
mortgage-backed securities.

The yield characteristics of mortgage- and asset-backed securities
differ from those of traditional debt securities. Among the principal
differences are that interest and principal payments are made more frequently
on mortgage-and asset-backed securities, usually monthly, and that principal
may be prepaid at any time because the underlying mortgage loans or other
assets generally may be prepaid at any time. As a result, if a Fund purchases
these securities at a premium, a prepayment rate that is faster than expected
will reduce yield to maturity, while a prepayment rate that is slower than
expected will have the opposite effect of increasing the yield to maturity.
Conversely, if a Fund purchases these securities at a discount, a prepayment
rate that is faster than expected will increase yield to maturity, while a
prepayment rate that is slower than expected will reduce yield to maturity.
Amounts available for reinvestment by a Fund are likely to be greater during a
period of declining interest rates and, as a result, are likely to be
reinvested at lower interest rates than during a period of rising interest
rates. Accelerated prepayments on securities purchased by a Fund at a premium
also impose a risk of loss of principal because the premium may not have been
fully amortized at the time the principal is prepaid in full. The market for
privately issued mortgage- and asset-backed securities is smaller and less
liquid than the market for government-sponsored mortgage-backed securities.

The Funds may invest in stripped mortgage- or asset-backed securities,
which receive differing proportions of the interest and principal payments from
the underlying assets. The market value of such securities generally is more
sensitive to changes in prepayment and interest rates than is the case with
traditional mortgage- and asset-backed securities, and in some cases such
market value may be extremely volatile. With respect to certain stripped
securities, such as interest only ("IO") and principal only ("PO") classes, a
rate of prepayment that is faster or slower than anticipated may result in a
Fund failing to recover all or a portion of its investment, even though the
securities are rated investment grade.

REPURCHASE AGREEMENTS

The Funds, other than the Treasury Fund, may invest in repurchase
agreements. In a repurchase agreement, a Fund buys a security at one price,
and at the time of sale, the seller agrees to repurchase the obligation at a
mutually agreed upon time and price (usually within seven days). The
repurchase agreement, thereby, determines the yield during the purchaser's
holding period, while the seller's obligation to repurchase is secured by the
value of the underlying security. If the value of such securities is less than
the repurchase price, plus any agreed-upon additional amount, the other party
to the agreement will be required to provide additional collateral so that at
all times the collateral is at least equal to the repurchase price, plus any
agreed-upon additional amount. The Advisor will monitor, on an ongoing basis,
the value of the underlying securities to ensure that the value always equals
or exceeds the repurchase price plus accrued interest.

INVESTMENT POLICIES AND TECHNIQUES--MONEY MARKET FUNDS

MATURITY AND QUALITY RESTRICTIONS

The Money Market Funds are subject to certain maturity restrictions
pursuant to Rule 2a-7 under the Investment Company Act of 1940 (the "Investment
Company Act") for money market funds that use the amortized cost method of
valuation to maintain a stable net asset value of $1.00 per share.
Accordingly, the Money Market Funds will (i) maintain a dollar weighted average
portfolio maturity of 90 days or less, and (ii) will purchase securities with a
remaining maturity of no more than 13 months (397 calendar days). Further, the
Treasury Fund will limit its investments to obligations which represent minimal
credit risks. And, the Money Fund will buy only U.S. dollar-denominated
securities which represent minimal credit risks and meet certain credit quality
and diversification requirements. For purposes of calculating the maturity of
portfolio instruments, the Money Market Funds will follow the requirements of
Rule 2a-7. Under Rule 2a-7, the maturity of portfolio instruments is
calculated as indicated below.

Generally, the maturity of a portfolio instrument shall be deemed to
be the period remaining (calculated from the trade date or such other date on
which the Money Market Funds' interest in the instrument is subject to market
action) until the date noted on the face of the instrument as the date on which
the principal amount must be paid, or in the case of an instrument called for
redemption, the date on which the redemption payment must be made, except that:

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<PAGE> 54

(1) An instrument that is issued or guaranteed by the U.S. government
or any agency thereof which has a variable rate of interest readjusted no less
frequently than every 762 days shall be deemed to have a maturity equal to the
period remaining until the next readjustment of the interest rate.

(2) A Variable Rate Instrument, the principal amount of which is
scheduled on the face of the instrument to be paid on 397 calendar days or less
shall be deemed to have a maturity equal to the period remaining until the next
readjustment of the interest rate.

(3) A Variable Rate Instrument that is subject to a Demand Feature
shall be deemed to have a maturity equal to the longer of the period remaining
until the next readjustment of the interest rate or the period remaining until
the principal amount can be recovered through demand.

(4) A Floating Rate Instrument that is subject to a Demand Feature
shall be deemed to have a maturity equal to the period remaining until the
principal amount can be recovered through demand.

(5) A repurchase agreement shall be deemed to have a maturity equal
to the period remaining until the date on which the repurchase of the
underlying securities is scheduled to occur, or, where no date is specified,
but the agreement is subject to a demand, the notice period applicable to a
demand for the repurchase of the securities.

As used herein all capitalized but undefined terms shall have the meaning such
terms have in Rule 2a-7.

With respect to the Money Fund, it will invest at least 95% of its
assets in instruments determined to present minimal credit risks and, at the
time of acquisition, are (i) obligations issued or guaranteed by the U.S.
government, its agencies, or instrumentalities; (ii) rated by at least two
nationally recognized rating agencies (or by one agency if only one agency has
issued a rating) (the "required rating agencies") in the highest rating
category for short-term debt obligations; (iii) unrated but whose issuer is
rated in the highest category by the required rating agencies with respect to a
class of short-term debt obligations or any security within that class that is
comparable in priority and security with the instrument; or (iv) unrated (other
than the type described in (iii)) but determined by the Board of Directors of
the Fund to be of comparable quality to the foregoing (provided the unrated
security has not received a short-term rating, and with respect to a long-term
security with a remaining maturity within the Fund's maturity restrictions, has
not received a long-term rating from any agency that is other than in its
highest rating category). The foregoing are referred to as "first-tier
securities."

The balance of the securities in which the Money Fund may invest are
instruments determined to present minimal credit risks, which do not qualify as
first-tier securities, and, at the time of acquisition, are (i) rated by the
required rating agencies in one of the two highest rating categories for
short-term debt obligations; (ii) unrated but whose issuer is rated in one of
the two highest categories by the required rating agencies with respect to a
class of short-term debt obligations or any security within that class that is
comparable in priority and security with the obligation; or (iii) unrated
(other than described in (ii)) but determined by the Board of Directors of the
Fund to be of comparable quality to the foregoing (provided the unrated
security has not received a short-term rating and, with respect to a long-term
security with a remaining maturity within the Fund's maturity restrictions, has
not received a long-term rating from any agency that is other than in one of
its highest two rating categories). The foregoing are referred to as
"second-tier securities."

In addition to the foregoing quality guidelines, the Money Fund
follows certain diversification standards and will not (i) acquire a
second-tier security of an issuer if, after giving effect to the acquisition,
the Fund would have invested more than the greater of 1% of its total assets or
one million dollars in second-tier securities issued by that issuer, or (ii)
invest more than 5% of the Fund's total assets in the securities (other than
securities issued by the U.S. government or any agency or instrumentality
thereof) issued by a single issuer.

BORROWINGS

Each Fund may borrow money from banks, limited by each Fund's
fundamental investment restriction to 33 1/3% of its total assets, and may
engage in mortgage dollar roll transactions (except the Treasury Money Fund)
and reverse repurchase agreements which may be considered a form of borrowing.
(See "Implementation of Policies and Risks - Mortgage Dollar Rolls and Reverse
Repurchase Agreements" in the Funds' Prospectus.) In

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<PAGE> 55

addition, each Fund may borrow up to an additional 5% of its total assets from
banks for temporary or emergency purposes. A Fund will not purchase securities
when bank borrowings exceed 5% of the Fund's total assets.

INVESTMENT POLICIES AND TECHNIQUES --
ADVANTAGE FUND, SHORT-TERM BOND FUND, GOVERNMENT
SECURITIES FUND AND CORPORATE BOND FUND

EUROPEAN AND AMERICAN DEPOSITORY RECEIPTS

The Funds may invest in foreign securities by purchasing American
Depository Receipts ("ADRs") and also may purchase securities of foreign
issuers in foreign markets and purchase European Depository Receipts ("EDRs")
or other securities convertible into securities or issuers based in foreign
countries. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. Generally, ADRs,
in registered form, are denominated in U.S. dollars and are designed for use in
the U.S. securities markets, while EDRs, in bearer form, may be denominated in
other currencies and are designed for use in European securities markets. ADRs
are receipts typically issued by a U.S. Bank or trust company evidencing
ownership of the underlying securities. EDRs are European receipts evidencing
a similar arrangements. For purposes of the Funds' investment policies, ADRs
and EDRs are deemed to have the same classification as the underlying
securities they represent. Thus, an ADR or EDR representing ownership of
common stock will be treated as common stock.

ADR facilities may be established as either "unsponsored" or
"sponsored." While ADRs issued under these two types of facilities are in some
respects similar, there are distinctions between them relating to the rights
and obligations of ADR holders and the practices of market participants. A
depository may establish an unsponsored facility without participation by (or
even necessarily the acquiescence of) the issuer of the deposited securities,
although typically the depository requests a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
generally bear all the costs of such facilities. The depository usually
charges fees upon the deposit and withdrawal of the deposited securities, the
conversion of dividends into U.S. dollars, the disposition of non-cash
distribution, and the performance of other services. The depository of an
unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited securities
or to pass through voting rights to ADR holders in respect of the deposited
securities. Sponsored ADR facilities are created in generally the same manner
as unsponsored facilities, except that the issuer of the deposited securities
enters into a deposit agreement with the depository. The deposit agreement
sets out the rights and responsibilities of the issuer, the depository and the
ADR holders. With sponsored facilities, the issuer of the deposited securities
generally will bear some of the costs relating to the facility (such as
dividend payment fees of the depository), although ADR holders continue to bear
certain other costs (such as deposit and withdrawal fees). Under the terms of
most sponsored arrangements, depositories agree to distribute notices of
shareholder meetings and voting instructions, and to provide shareholder
communications and other information to the ADR holders at the request of the
issuer of the deposited securities.

ZERO-COUPON, STEP-COUPON AND PAY-IN-KIND SECURITIES

The Advantage, Short-Term Bond, Government, and Corporate Bond Funds
may invest in zero-coupon, step-coupon, and pay-in-kind securities. These
securities are debt securities that do not make regular interest payments.
Zero-coupon and step-coupon securities are sold at a deep discount to their
face value. Pay-in-kind securities pay interest through the issuance of
additional securities. Because such securities do not pay current income, the
price of these securities can be volatile when interest rates fluctuate. While
these securities do not pay current cash income, federal income tax law
requires the holders of taxable zero-coupon, step-coupon, and certain
pay-in-kind securities to report as interest each year the portion of the
original discount (or deemed discount) on such securities accruing that year.
In order to qualify as "regulated investment companies" under the Code, the
Funds may be required to distribute a portion of such discount and may be
required to dispose of other portfolio securities, which may occur in periods
of adverse market prices, in order to generate cash to meet these distribution
requirements.

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DERIVATIVE INSTRUMENTS

GENERAL DESCRIPTION. As discussed in the Prospectus, the Advisor may
use a variety of derivative instruments, including options, futures contracts
(sometimes referred to as "futures") and options on futures contracts for any
lawful purpose, such as to hedge the Fund's portfolio, risk management, or to
attempt to enhance returns.

The use of these instruments is subject to applicable regulations of
the SEC, the several options and futures exchanges upon which they may be
traded, the Commodity Futures Trading Commission ("CFTC") and various state
regulatory authorities. In addition, the Funds' ability to use these
instruments will be limited by tax considerations.

In addition to the products, strategies and risks described below and
in the Prospectus, the Advisor expects to discover additional derivative
instruments and other hedging techniques. These new opportunities may become
available as the Advisor develops new techniques, as regulatory authorities
broaden the range of permitted transactions. The Advisor may utilize these
opportunities to the extent that they are consistent with the Funds' investment
objective and permitted by the Funds' investment limitations and applicable
regulatory authorities.

SPECIAL RISKS OF THESE INSTRUMENTS. The use of derivative instruments
involves special considerations and risks as described below. Risks pertaining
to particular instruments are described in the sections that follow.

(1) Successful use of most of these instruments depends upon the
Advisor's ability to predict movements of the overall securities and currency
markets, which requires different skills than predicting changes in the prices
of individual securities. While the Advisor is experienced in the use of these
instruments, there can be no assurance that any particular strategy adopted
will succeed.

(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of investments
being hedged. For example, if the value of an instrument used in a short hedge
(such as writing a call option, buying a put option, or selling a futures
contract) increased by less than the decline in value of the hedged investment,
the hedge would not be fully successful. Such a lack of correlation might
occur due to factors unrelated to the value of the investments being hedged,
such as speculative or other pressures on the markets in which these
instruments are traded. The effectiveness of hedges using instruments on
indices will depend on the degree of correlation between price movements in the
index and price movements in the investments being hedged.

(3) Hedging strategies, if successful, can reduce the risk of loss by
wholly or partially offsetting the negative effect of unfavorable price
movements in the investments being hedged. However, hedging strategies can
also reduce opportunity for gain by offsetting the positive effect of favorable
price movements in the hedged investments. For example, if a Fund entered into
a short hedge because the Advisor projected a decline in the price of a
security in the Fund's portfolio, and the price of that security increased
instead, the gain from that increase might be wholly or partially offset by a
decline in the price of the instrument. Moreover, if the price of the
instrument declined by more than the increase in the price of the security, the
Fund could suffer a loss.

(4) As described below, a Fund might be required to maintain assets
as "cover," maintain segregated accounts, or make margin payments when it takes
positions in these instruments involving obligations to third parties (i.e.,
instruments other than purchased options). If a Fund were unable to close out
its positions in such instruments, it might be required to continue to maintain
such assets or accounts or make such payments until the position expired or
matured. The requirements might impair the Fund's ability to sell a portfolio
security or make an investment at a time when it would otherwise be favorable
to do so, or require that the Fund sell a portfolio security at a
disadvantageous time. A Fund's ability to close out a position in an
instrument prior to expiration or maturity depends on the existence of a liquid
secondary market or, in the absence of such a market, the ability and
willingness of the other party to the transaction ("counter party") to enter
into a transaction closing out the position. Therefore, there is no assurance
that any hedging position can be closed out at a time and price that is
favorable to a Fund.

For a discussion of the federal income tax treatment of the Funds'
derivative instruments, see "TAXES -- Derivative Instruments" below.

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<PAGE> 57

GENERAL LIMITATIONS ON CERTAIN DERIVATIVE TRANSACTIONS. The Advantage
Fund, Short-Term Bond Fund, Government Fund and Corporate Bond Fund have each
filed a notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission (the
"CFTC") and the National Futures Association, which regulate trading in the
futures markets. Pursuant to Rule 4.5 of the regulations under the Commodity
Exchange Act (the "CEA"), the notice of eligibility for each Fund includes
representations that the Fund will use futures contracts and related options
solely for bona fide hedging purposes within the meaning of CFTC regulations,
provided that a Fund may hold other positions in futures contracts and related
options that do not qualify as a bona fide hedging position if the aggregate
initial margin deposits and premiums required to establish these positions,
less the amount by which any such options positions are "in the money," do not
exceed 5% of the Fund's net assets. Adoption of these guidelines does not
limit the percentage of a Fund's assets at risk to 5%. A Fund may purchase a
put or call option, including any straddles or spreads, only if the value of
its premium, when aggregated with the premiums on all other options purchased
by the Fund, does not exceed 5% of the Fund's total assets.

In addition, (i) the aggregate value of securities underlying call
options on securities written by a Fund or obligations underlying put options
on securities written by a Fund determined as of the date the options are
written will not exceed 50% of the Fund's net assets; (ii) the aggregate
premiums paid on all options purchased by a Fund and which are being held will
not exceed 20% of the Fund's net assets; and (iii) a Fund will not purchase put
or call options, other than hedging positions, if, as a result thereof, more
than 5% of its total assets would be so invested; and (iv) the aggregate margin
deposits required on all futures and options on futures transactions being held
will not exceed 5% of a Fund's total assets.

The foregoing limitations are not fundamental policies of the Funds
and may be changed by each Fund's Board of Directors without shareholder
approval as regulatory agencies permit.

Transactions using options (other than purchased options) expose the
Funds to counter-party risk. To the extent required by SEC guidelines, a Fund
will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, other options, or futures or (2)
cash and liquid high grade debt securities with a value sufficient at all times
to cover its potential obligations to the extent not covered as provided in (1)
above. Each Fund will also set aside cash and/or appropriate liquid assets in
a segregated custodial account if required to do so by the SEC and CFTC
regulations. Assets used as cover or held in a segregated account cannot be
sold while the position in the corresponding option or futures contract is
open, unless they are replaced with similar assets. As a result, the
commitment of a large portion of a Fund's assets to cover or segregated
accounts could impede portfolio management or a Fund's ability to meet
redemption requests or other current obligations.

OPTIONS. Each Fund may also purchase or write put and call options on
securities and enter into closing transactions with respect to such options to
terminate an existing position. The purchase of call options serves as a long
hedge, and the purchase of put options serves as a short hedge. Writing put or
call options can enable a Fund to enhance income by reason of the premiums paid
by the purchaser of such options. Writing call options serves as a limited
short hedge because declines in the value of the hedged investment would be
offset to the extent of the premium received for writing the option. However,
if the security appreciates to a price higher than the exercise price of the
call option, it can be expected that the option will be exercised and the Fund
will be obligated to sell the security at less than its market value or will be
obligated to purchase the security at a price greater than that at which the
security must be sold under the option. All or a portion of any assets used as
cover for OTC options written by a Fund would be considered illiquid to the
extent described under "COMMON INVESTMENT POLICIES AND TECHNIQUES--Illiquid
Securities." Writing put options serves as a limited long hedge because
increases in the value of the hedged investment would be offset to the extent
of the premium received for writing the option. However, if the security
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and the Fund will be
obligated to purchase the security at more than its market value.

The value of an option position will reflect, among other things, the
historical price volatility of the underlying investment, the current market
value of the underlying investment, the time remaining until expiration, the
relationship of the exercise price to the market price of the underlying
investment, and general market conditions. Options that expire unexercised
have no value.

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<PAGE> 58

A Fund may effectively terminate its right or obligation under an
option by entering into a closing transaction. For example, a Fund may
terminate its obligation under a call or put option that it had written by
purchasing an identical call or put option; this is known as a closing purchase
transaction. Conversely, a Fund may terminate a position in a put or call
option it had purchased by writing an identical put or call option; this is
known as a closing sale transaction. Closing transactions permit the Funds to
realize the profit or limit the loss on an option position prior to its
exercise or expiration.

The Funds may purchase or write both exchange-traded and OTC options.
Exchange-traded options are issued by a clearing organization affiliated with
the exchange on which the option is listed that, in effect, guarantees
completion of every exchange-traded option transaction. OTC options are
contracts between a Fund and the other party to the transaction ("counter
party") (usually a securities dealer or a bank) with no clearing organization
guarantee. Thus, when a Fund purchases or writes an OTC option, it relies on
the counter party to make or take delivery of the underlying investment upon
exercise of the option. Failure by the counter party to do so would result in
the loss of any premium paid by the Fund as well as the loss of any expected
benefit of the transaction.

The Funds' ability to establish and close out positions in
exchange-listed options depends on the existence of a liquid market. The Funds
intend to purchase or write only those exchange-traded options for which there
appears to be a liquid secondary market. However, there can be no assurance
that such a market will exist at any particular time. Closing transactions can
be made for OTC options only by negotiating directly with the counter party, or
by a transaction in the secondary market if any such market exists. Although
the Funds will enter into OTC options only with counter parties that are
expected to be capable of entering into closing transactions with the Funds,
there is no assurance that the Funds will in fact be able to close out an OTC
option at a favorable price prior to expiration. In the event of insolvency of
the counter party, a Fund might be unable to close out an OTC option position
at any time prior to its expiration.

If a Fund were unable to effect a closing transaction for an option it
had purchased, it would have to exercise the option to realize any profit. The
inability to enter into a closing purchase transaction for a covered call
option written by a Fund could cause material losses because the Fund would be
unable to sell the investment used as a cover for the written option until the
option expires or is exercised.

The writing and purchasing of options is a highly specialized activity
that involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. Imperfect correlation between
the options and securities markets may detract the effectiveness of attempted
hedging.

SPREAD TRANSACTIONS. Each Fund may purchase from securities dealers
covered spread options. Such covered spread options are not presently
exchange-listed or exchange-traded. The purchase of a spread option gives the
Fund the right to put, or sell, a security that it owns at a fixed dollar
spread or fixed yield spread in relationship to another security that the Fund
does not own, but which is used as a benchmark. The risk to the Fund in
purchasing covered spread options is the cost of the premium paid for the
spread option and any transaction costs. In addition, there is no assurance
that closing transactions will be available. The purchase of spread options
will be used to protect the Fund against adverse changes in prevailing credit
quality spreads, i.e., the yield spread between high quality and lower quality
securities. Such protection is only provided during the life of the spread
option.

FUTURES CONTRACTS. Each Fund may enter into futures contracts
(hereinafter referred to as "futures" or "futures contracts"), including
interest rate and index futures. Each Fund may also purchase put and call
options, and write covered put and call options, on futures in which it is
allowed to invest. The purchase of futures or call options thereon can serve
as a long hedge, and the sale of futures or the purchase of put options thereon
can serve as a short hedge. Writing covered call options on futures contracts
can serve as a limited short hedge, and writing covered put options on futures
contracts can serve as a limited long hedge, using a strategy similar to that
used for writing covered options in securities. The Funds' hedging may include
purchases of futures as an offset against the effect of expected increases in
securities prices and sales of futures as an offset against the effect of
expected declines in securities prices. The Funds' futures transactions may be
entered into for any lawful purpose such as hedging purposes, risk management,
or to enhance returns. The Funds may also write put options on interest rate
futures contracts while at the same time purchasing call options on the same
futures contracts in order to create synthetically a long futures contract
position. Such options would have the same strike prices and expiration dates.
The Funds will engage in this strategy only when the Advisor believes it is
more advantageous to the Funds than is purchasing the futures contract.

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<PAGE> 59

To the extent required by regulatory authorities, the Funds only enter
into futures contracts that are traded on national futures exchanges and are
standardized as to maturity date and underlying financial instrument. Futures
exchanges and trading are regulated under the CEA by the CFTC. Although
techniques other than sales and purchases of futures contracts could be used to
reduce a Fund's exposure to interest rate fluctuations, a Fund may be able to
hedge its exposure more effectively and perhaps at a lower cost through using
futures contracts.

An interest rate futures contract provides for the future sale by one
party and purchase by another party of a specified amount of a specific
financial instrument (debt security) for a specified price at a designated
date, time, and place. An index futures contract is an agreement pursuant to
which the parties agree to take or make delivery of an amount of cash equal to
the difference between the value of the index at the close of the last trading
day of the contract and the price at which the index futures contract was
originally written. Transactions costs are incurred when a futures contract is
bought or sold and margin deposits must be maintained. A futures contract may
be satisfied by delivery or purchase, as the case may be, of the instrument or
by payment of the change in the cash value of the index. More commonly,
futures contracts are closed out prior to delivery by entering into an
offsetting transaction in a matching futures contract. Although the value of
an index might be a function of the value of certain specified securities, no
physical delivery of those securities is made. If the offsetting purchase
price is less than the original sale price, a Fund realizes a gain; if it is
more, a Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, a Fund realizes a gain; if it is less, a Fund
realizes a loss. The transaction costs must also be included in these
calculations. There can be no assurance, however, that a Fund will be able to
enter into an offsetting transaction with respect to a particular futures
contract at a particular time. If a Fund is not able to enter into an
offsetting transaction, the Fund will continue to be required to maintain the
margin deposits on the futures contract.

No price is paid by a Fund upon entering into a futures contract.
Instead, at the inception of a futures contract, a Fund is required to deposit
in a segregated account with its custodian, in the name of the futures broker
through whom the transaction was effected, "initial margin" consisting of cash,
U.S. government securities or other liquid, high grade debt securities, in an
amount generally equal to 10% or less of the contract value. Margin must also
be deposited when writing a call or put option on a futures contract, in
accordance with applicable exchange rules. Unlike margin in securities
transactions, initial margin on futures contracts does not represent a
borrowing, but rather is in the nature of a performance bond or good-faith
deposit that is returned to the Fund at the termination of the transaction if
all contractual obligations have been satisfied. Under certain circumstances,
such as periods of high volatility, a Fund may be required by an exchange to
increase the level of its initial margin payment, and initial margin
requirements might be increased generally in the future by regulatory action.

Subsequent "variation margin" payments are made to and from the
futures broker daily as the value of the futures position varies, a process
known as "marking to market." Variation margin does not involve borrowing, but
rather represents a daily settlement of a Fund's obligations to or from a
futures broker. When a Fund purchases an option on a future, the premium paid
plus transaction costs is all that is at risk. In contrast, when a Fund
purchases or sells a futures contract or writes a call or put option thereon,
it is subject to daily variation margin calls that could be substantial in the
event of adverse price movements. If a Fund has insufficient cash to meet
daily variation margin requirements, it might need to sell securities at a time
when such sales are disadvantageous. Purchasers and sellers of futures
positions and options on futures can enter into offsetting closing transactions
by selling or purchasing, respectively, an instrument identical to the
instrument held or written. Positions in futures and options on futures may be
closed only on an exchange or board of trade that provides a secondary market.
The Funds intend to enter into futures transactions only on exchanges or boards
of trade where there appears to be a liquid secondary market. However, there
can be no assurance that such a market will exist for a particular contract at
a particular time.

Under certain circumstances, futures exchanges may establish daily
limits on the amount that the price of a future or option on a futures contract
can vary from the previous day's settlement price; once that limit is reached,
no trades may be made that day at a price beyond the limit. Daily price limits
do not limit potential losses because prices could move to the daily limit for
several consecutive days with little or no trading, thereby preventing
liquidation of unfavorable positions.

If a Fund were unable to liquidate a futures or option on a futures
contract position due to the absence of a liquid secondary market or the
imposition of price limits, it could incur substantial losses. The Fund would
continue to be subject to market risk with respect to the position. In
addition, except in the case of purchased options, the Fund would continue to
be required to make daily variation margin payments and might be required to
maintain the position being hedged by the future or option or to maintain cash
or securities in a segregated account.

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<PAGE> 60

Certain characteristics of the futures market might increase the risk
that movements in the prices of futures contracts or options on futures
contracts might not correlate perfectly with movements in the prices of the
investments being hedged. For example, all participants in the futures and
options on futures contracts markets are subject to daily variation margin
calls and might be compelled to liquidate futures or options on futures
contracts positions whose prices are moving unfavorably to avoid being subject
to further calls. These liquidations could increase price volatility of the
instruments and distort the normal price relationship between the futures or
options and the investments being hedged. Also, because initial margin deposit
requirements in the futures market are less onerous than margin requirements in
the securities markets, there might be increased participation by speculators
in the future markets. This participation also might cause temporary price
distortions. In addition, activities of large traders in both the futures and
securities markets involving arbitrage, "program trading" and other investment
strategies might result in temporary price distortions.

FOREIGN CURRENCY-RELATED DERIVATIVE STRATEGIES--SPECIAL
CONSIDERATIONS. The Funds may use options and futures on foreign currencies,
as described above, and forward currency contracts, as described below, to
hedge against movements in the values of the foreign currencies in which a
Funds' securities are denominated. A Fund may utilize foreign currency-related
derivative instruments to seek to enhance returns through exposure to a
particular foreign currency. Such currency hedges can protect against price
movements in a security a Fund owns or intends to acquire that are attributable
to changes in the value of the currency in which it is denominated. Such
hedges do not, however, protect against price movements in the securities that
are attributable to other causes.

A Fund might seek to hedge against changes in the value of a
particular currency when no hedging instruments on that currency are available
or such hedging instruments are more expensive than certain other hedging
instruments. In such cases, the Fund may hedge against price movements in that
currency by entering into transactions using hedging instruments on another
foreign currency or a basket of currencies, the values of which the Advisor
believes will have a high degree of positive correlation to the value of the
currency being hedged. The risk that movements in the price of the hedging
instrument will not correlate perfectly with movements in the price of the
currency being hedged is magnified when this strategy is used.

The value of derivative instruments on foreign currencies depends on
the value of the underlying currency relative to the U.S. dollar. Because
foreign currency transactions occurring in the interbank market might involve
substantially larger amounts than those involved in the use of such derivative
instruments, a Fund could be disadvantaged by having to deal in the odd lot
market (generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots.

There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis.
Quotation information generally is representative of very large transactions in
the interbank market and thus might not reflect odd-lot transactions where
rates might be less favorable. The interbank market in foreign currencies is a
global, round-the-clock market. To the extent the U.S. options or futures
markets are closed while the markets for the underlying currencies remain open,
significant price and rate movements might take place in the underlying markets
that cannot be reflected in the markets for the derivative instruments until
they reopen.

Settlement of derivative transactions involving foreign currencies
might be required to take place within the country issuing the underlying
currency. Thus, a Fund might be required to accept or make delivery of the
underlying foreign currency in accordance with any U.S. or foreign regulations
regarding the maintenance of foreign banking arrangements by U.S. residents and
might be required to pay any fees, taxes and charges associated with such
delivery assessed in the issuing country.

Permissible foreign currency options will include options traded
primarily in the over-the-counter ("OTC") market. Although options on foreign
currencies are traded primarily in the OTC market, the Fund will normally
purchase OTC options on foreign currency only when the Advisor believes a
liquid secondary market will exist for a particular option at any specific
time.

FORWARD CURRENCY CONTRACTS. A forward currency contract involves an
obligation to purchase or sell a specific currency at a specified future date,
which may be any fixed number of days from the contract date agreed upon by the
parties, at a price set at the time the contract is entered into.

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<PAGE> 61

A Fund may enter into forward currency contracts to purchase or sell
foreign currencies for a fixed amount of U.S. dollars or another foreign
currency for any lawful purpose. Such transactions may serve as long hedges --
for example, a Fund may purchase a forward currency contract to lock in the
U.S. dollar price of a security denominated in a foreign currency that the Fund
intends to acquire. Forward currency contracts may also serve as short hedges
- -- for example, a Fund may sell a forward currency contract to lock in the U.S.
dollar equivalent of the proceeds from the anticipated sale of a security
denominated in a foreign currency.

As noted above, a Fund may seek to hedge against changes in the value
of a particular currency by using forward contracts on another foreign currency
or a basket of currencies, the value of which the Advisor believes will have a
positive correlation to the values of the currency being hedged. In addition,
a Fund may use forward currency contracts to shift exposure to foreign currency
fluctuations from one country to another. For example, if a Fund owns
securities denominated in a foreign currency and the Advisor believes that
currency will decline relative to another currency, it might enter into a
forward contract to sell an appropriate amount of the first foreign currency,
with payment to be made in the second foreign currency. Transactions that use
two foreign currencies are sometimes referred to as "cross hedges." Use of
different foreign currency magnifies the risk that movements in the price of
the instrument will not correlate or will correlate unfavorably with the
foreign currency being hedged.

The cost to a Fund of engaging in forward currency contracts varies
with factors such as the currency involved, the length of the contract period
and the market conditions then prevailing. Because forward currency contracts
are usually entered into on a principal basis, no fees or commissions are
involved. When a Fund enters into a forward currency contract, it relies on
the counter party to make or take delivery of the underlying currency at the
maturity of the contract. Failure by the counter party to do so would result
in the loss of any expected benefit of the transaction.

As is the case with futures contracts, purchasers and sellers of
forward currency contracts can enter into offsetting closing transactions,
similar to closing transactions on futures, by selling or purchasing,
respectively, an instrument identical to the instrument purchased or sold.
Secondary markets generally do not exist for forward currency contracts, with
the result that closing transactions generally can be made for forward currency
contracts only by negotiating directly with the counter party. Thus, there can
be no assurance that a Fund will in fact be able to close out a forward
currency contract at a favorable price prior to maturity. In addition, in the
event of insolvency of the counter party, a Fund might be unable to close out a
forward currency contract at any time prior to maturity. In either event, the
Fund would continue to be subject to market risk with respect to the position,
and would continue to be required to maintain a position in securities
denominated in the foreign currency or to maintain cash or securities in a
segregated account.

The precise matching of forward currency contract amounts and the
value of the securities involved generally will not be possible because the
value of such securities, measured in the foreign currency, will change after
the foreign currency contract has been established. Thus, a Fund might need to
purchase or sell foreign currencies in the spot (cash) market to the extent
such foreign currencies are not covered by forward contracts. The projection
of short-term currency market movements is extremely difficult, and the
successful execution of a short-term hedging strategy is highly uncertain.

When required by guidelines of the Securities and Exchange Commission,
the Funds will set aside permissible liquid assets in segregated accounts to
secure their respective potential obligations under forward currency contracts.

HIGH YIELD (HIGH RISK) SECURITIES

IN GENERAL. The Short-Term Bond Fund may invest up to 5% of its
assets and the Corporate Bond Fund may invest up to 25% of its assets in
non-investment grade debt securities. The Advantage Fund may invest up to 25%
of its assets only in non-investment grade debt securities rated in the fifth
highest rating category (e.g., BB by S&P) or comparable unrated securities.
Securities rated BB are considered the least speculative of non-investment
grade securities. With respect to the Short-Term Bond and Corporate Bond
Funds, non-investment grade debt securities (hereinafter referred to as
"lower-quality securities") include (i) bonds rates as low as C by Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation ("S&P"), or
Fitch Investors Service, Inc. ("Fitch"), or CCC by Duff & Phelps, Inc. ("D&P");
(ii) commercial paper rated as low as C by S&P, Not Prime by Moody's or Fitch 4
by Fitch; and (iii) unrated debt securities of comparable quality.
Lower-quality securities, while

- 16 -
<PAGE> 62

generally offering higher yields than investment grade securities with similar
maturities, involve greater risks, including the possibility of default or
bankruptcy. They are regarded as predominantly speculative with respect to the
issuer's capacity to pay interest and repay principal. The special risk
considerations in connection with investments in these securities are discussed
below. Refer to the Appendix of this Statement of Additional Information for a
discussion of securities ratings.

EFFECT OF INTEREST RATES AND ECONOMIC CHANGES. The lower-quality and
comparable unrated security market is relatively new and its growth has
paralleled a long economic expansion. As a result, it is not clear how this
market may withstand a prolonged recession or economic downturn. Such an
economic downturn could severely disrupt the market for and adversely affect
the value of such securities.

All interest-bearing securities typically experience appreciation when
interest rates decline and depreciation when interest rates rise. The market
values of lower-quality and comparable unrated securities tend to reflect
individual corporate developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the general level of
interest rates. Lower-quality and comparable unrated securities also tend to be
more sensitive to economic conditions than are higher-rated securities. As a
result, they generally involve more credit risks than securities in the
higher-rated categories. During an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower-quality and comparable
unrated securities may experience financial stress and may not have sufficient
revenues to meet their payment obligations. The issuer's ability to service
its debt obligations may also be adversely affected by specific corporate
developments, the issuer's inability to meet specific projected business
forecasts or the unavailability of additional financing. The risk of loss due
to default by an issuer of these securities is significantly greater than
issuers of higher-rated securities because such securities are generally
unsecured and are often subordinated to other creditors. Further, if the
issuer of a lower-quality or comparable unrated security defaulted, a Fund
might incur additional expenses to seek recovery. Periods of economic
uncertainty and changes would also generally result in increased volatility in
the market prices of these securities and thus in the Fund's net asset value.

As previously stated, the value of a lower-quality or comparable
unrated security will decrease in a rising interest rate market, and
accordingly so will a Fund's net asset value. If a Fund experiences unexpected
net redemptions in such a market, it may be forced to liquidate a portion of
its portfolio securities without regard to their investment merits. Due to the
limited liquidity of lower-quality and comparable unrated securities (discussed
below), a Fund may be forced to liquidate these securities at a substantial
discount. Any such liquidation would reduce the Fund's asset base over which
expenses could be allocated and could result in a reduced rate of return for
the Fund.

PAYMENT EXPECTATIONS. Lower-quality and comparable unrated securities
typically contain redemption, call or prepayment provisions which permit the
issuer of such securities containing such provisions to, at its discretion,
redeem the securities. During periods of falling interest rates, issuers of
these securities are likely to redeem or prepay the securities and refinance
them with debt securities with a lower interest rate. To the extent an issuer
is able to refinance the securities, or otherwise redeem them, a Fund may have
to replace the securities with a lower yielding security, which would result in
a lower return for the Funds.

CREDIT RATINGS. Credit ratings issued by credit-rating agencies
evaluate the safety of principal and interest payments of rated securities.
They do not, however, evaluate the market value risk of lower-quality and
comparable unrated securities and, therefore, may not fully reflect the true
risks of an investment. In addition, credit rating agencies may or may not
make timely changes in a rating to reflect changes in the economy or in the
condition of the issuer that affect the market value of the security.
Consequently, credit ratings are used only as a preliminary indicator of
investment quality. Investments in lower-quality and comparable unrated
securities will be more dependent on the Advisor's credit analysis than would
be the case with investments in investment-grade debt securities. The Advisor
employs its own credit research and analysis, which includes a study of
existing debt, capital structure, ability to service debt and to pay dividends,
the issuer's sensitivity to economic conditions, its operating history and the
current trend of earnings. The Advisor continually monitors the investments in
each Fund's portfolio and carefully evaluates whether to dispose of or to
retain lower-quality and comparable unrated securities whose credit ratings or
credit quality may have changed.

LIQUIDITY AND VALUATION. A Fund may have difficulty disposing of
certain lower-quality and comparable unrated securities because there may be a
thin trading market for such securities. Because not all dealers maintain
markets in all lower-quality and comparable unrated securities, there is no
established retail secondary market for many of these securities. The Funds

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<PAGE> 63

anticipate that such securities could be sold only to a limited number of
dealers or institutional investors. To the extent a secondary trading market
does exist, it is generally not as liquid as the secondary market for
higher-rated securities. The lack of a liquid secondary market may have an
adverse impact on the market price of the security. As a result, a Fund's
asset value and ability to dispose of particular securities, when necessary to
meet the Fund's liquidity needs or in response to a specific economic event,
may be impacted. The lack of a liquid secondary market for certain securities
may also make it more difficult for a Fund to obtain accurate market quotations
for purposes of valuing the Fund's portfolio. Market quotations are generally
available on many lower-quality and comparable unrated issues only from a
limited number of dealers and may not necessarily represent firm bids of such
dealers or prices for actual sales. During periods of thin trading, the spread
between bid and asked prices is likely to increase significantly. In addition,
adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of lower-quality and comparable
unrated securities, especially in a thinly traded market.

NEW AND PROPOSED LEGISLATION. Recent legislation has been adopted,
and from time to time, proposals have been discussed, regarding new legislation
designed to limit the use of certain lower-quality and comparable unrated
securities by certain issuers. An example of legislation is a recent law which
requires federally insured savings and loan associations to divest their
investments in these securities over time. It is not currently possible to
determine the impact of the recent legislation or the proposed legislation on
the lower-quality and comparable unrated securities market. However, it is
anticipated that if additional legislation is enacted or proposed, it could
have a material affect on the value of these securities and the existence of a
secondary trading market for the securities.

SHORT SALES AGAINST THE BOX

The Funds may sell securities short against the box to hedge
unrealized gains on portfolio securities. Selling securities short against the
box involves selling a security that a Fund owns or has the right to acquire,
for delivery at a specified date in the future. If a Fund sells securities
short against the box, it may protect unrealized gains, but will lose the
opportunity to profit on such securities if the price rises.

WARRANTS

Warrants are securities giving the holder the right, but not the
obligation, to buy the stock of an issuer at a given price (generally higher
than the value of the stock at the time of issuance) during a specified period
or perpetually. Warrants may be acquired separately or in connection with the
acquisition of securities. A Fund will not purchase warrants, valued at the
lower of cost or market value, in excess of 5% of the Fund's net assets.
Included in that amount, but not to exceed 2% of the Fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange. Warrants acquired by a Fund in units or attached to securities
are not subject to these restrictions. Warrants do not carry with them the
right to dividends or voting rights with respect to the securities that they
entitle their holder to purchase, and they do not represent any rights in the
assets of the issuer. As a result, warrants may be considered more speculative
than certain other types of investments. In addition, the value of a warrant
does not necessarily change with the value of the underlying securities, and a
warrant ceases to have value if it is not exercised prior to its expiration
date.

DIRECTORS AND OFFICERS OF THE FUNDS

Directors and officers of the Funds, together with information as to
their principal business occupations during the last five years, and other
information are shown below. Each director who is deemed an "interested
person," as defined in the Investment Company Act of 1940, is indicated by an
asterisk. Each officer and director holds the same position with the following
registered investment companies: Strong Municipal Money Market Fund, Inc.,
Strong Municipal Bond Fund, Inc., Strong Short-Intermediate Municipal Bond
Fund, Inc., Strong Insured Municipal Bond Fund, Inc., Strong Asset-Allocation
Fund, Inc., Strong Total Return Fund, Inc., Strong Discovery Fund, Inc., Strong
Opportunity Fund, Inc., Strong Common Stock Fund, Inc., Strong International
Stock Fund, Inc., Strong Discovery Fund II, Inc., Strong Special Fund II,
Strong American Utilities Fund, Inc., Strong High-Yield Municipal Bond Fund,
Inc., Strong Asia Pacific Fund, Inc., Strong Growth Fund, Inc., Strong
International Bond Fund, Inc., and Strong Short-Term Global Bond Fund, Inc.
(collectively, the "Strong Funds").

*Richard S. Strong, Chairman of the Board and Director of the Funds.

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<PAGE> 64

Prior to August 1985, Mr. Strong was Chief Executive Officer of the
Advisor, which he founded in 1974. Since August 1985, Mr. Strong has been a
Security Analyst and Portfolio Manager of the Advisor. In October 1991, Mr.
Strong also became the Chairman of the Advisor. Mr. Strong is a director of
the Advisor. Since October 1993, Mr. Strong has been Chairman and a director
of Strong Holdings, Inc., a Wisconsin corporation and subsidiary of the Advisor
("Holdings"), and the Fund's underwriter, Strong Funds Distributors, Inc., a
Wisconsin corporation and subsidiary of Holdings ("Distributor"). Since
January 1994, Mr. Strong has been Chairman and a director of Heritage Reserve
Development Corporation, a Wisconsin corporation and subsidiary of Holdings
("Heritage"); and since February 1994, Mr. Strong has been a member of the
Managing Boards of Fussville Real Estate Holdings L.L.C. ("Real Estate
Holdings"), a Wisconsin Limited Liability Company and subsidiary of the
Advisor, and Fussville Development L.L.C. ("Development") a Wisconsin Limited
Liability Company and subsidiary of the Advisor, and certain of its
subsidiaries. Mr. Strong has served as a director and Chairman of the Board of
the (i) U.S. Treasury Fund since February 1989; (ii) Money Fund since July
1986; (iii) Advantage Fund since November 1988; (iv) Short-Term Bond Fund since
August 1987; (v) Government Fund since October 1986; and (vi) Corporate Bond
Fund since December 1985.

Marvin E. Nevins, Director of the Funds.

Private Investor. From 1945 to 1980, Mr. Nevins was Chairman of
Wisconsin Centrifugal Inc., a foundry. From July 1983 to December 1986, he was
Chairman of General Casting Corp., Waukesha, Wisconsin, a foundry. Mr. Nevins
is a former Chairman of the Wisconsin Association of Manufacturers & Commerce.
He was also a regent of the Milwaukee School of Engineering and a member of the
Board of Trustees of the Medical College of Wisconsin. Mr. Nevins has served
as a director of the (i) U.S. Treasury Fund since February 1989; (ii) Money
Fund since July 1986; (iii) Advantage Fund since November 1988; (iv) Short-Term
Bond Fund since August 1987; (v) Government Fund since October 1986; and (vi)
Corporate Bond Fund since December 1985.

Willie D. Davis, Director of the Funds.

Mr. Davis has been director of Alliance Bank since 1980, Sara Lee
Corporation (a food/consumer products company) since 1983, Kmart Corporation (a
discount consumer products company) since 1985, YMCA Metropolitan - Los Angeles
since 1985, Dow Chemical Company since 1988, MGM Grand, Inc. (an
entertainment/hotel company) since 1990, WICOR, Inc. (a utility company) since
1990, Johnson Controls, Inc. (an industrial company) since 1992, L.A. Gear (a
footwear/sportswear company) since 1992, and Rally's Hamburger, Inc. since
1994. Mr. Davis has been a trustee of the University of Chicago since 1980,
Marquette University since 1988, and Occidental College since 1990. Since
1977, Mr. Davis has been President and Chief Executive Officer of All Pro
Broadcasting, Inc. Mr. Davis was a director of the Fireman's Fund (an
insurance company) from 1975 until 1990. Mr. Davis has served as a director of
the Funds since July 1994.

*John Dragisic, Vice Chairman and Director of the Funds.

Mr. Dragisic has been Vice Chairman and a director of the Advisor and
a director of Holdings and Distributor since 1994. Mr. Dragisic previously
served as a director of Funds between 1991 and 1994. Mr. Dragisic was the
President and Chief Executive Officer of Grunau Company, Inc. (a mechanical
contracting and engineering firm), Milwaukee, Wisconsin from 1987 until July
1994. From 1981 to 1987, he was an Executive Vice President with Grunau
Company, Inc. From 1969 until 1973, Mr. Dragisic worked for the InterAmerican
Development Bank. Mr. Dragisic received his Ph.D. in Economics in 1971 from
the University of Wisconsin - Madison and his B.A. degree in Economics in 1962
from Lake Forest College. Mr. Dragisic has served as Vice Chairman of the
Funds since July 1994 and director of the Funds since April 1995.

Stanley Kritzik, Director of the Funds.

Mr. Kritzik has been a Partner of Metropolitan Associates since _____
and a Director of Aurora Health Care and Health Network Ventures, Inc. since
____. He has served as a Director of the Funds since April 1995.

William F. Vogt, Director of the Funds.

Mr. Vogt has been the President of Vogt Management Consulting, Inc.
(need description of Co.), Denver, Colorado since 1990. From 1982 until 1990,
he served as an executive director of University Physicians (need description),
Denver,

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<PAGE> 65

Colorado. Mr. Vogt was also a Fellow of the Medical Group Management
Association, American College of Medical Practice Executives. He has served as
a director of the Funds since April 1995.

Lawrence A. Totsky, C.P.A., Vice President of the Funds.

Mr. Totsky has been Senior Vice President of the Advisor since
September 1994. Mr. Totsky served as Vice President of the Advisor from
December 1992 to September 1994. Mr. Totsky acted as the Advisor's Manager of
Shareholder Accounting and Compliance from June 1987 to June 1991 when he was
named Director of Mutual Fund Administration. Mr. Totsky has been the Vice
President of the Funds since May 1993.

Ann E. Oglanian, Secretary of the Funds.

Ms. Oglanian has been an Associate Counsel to the Advisor since
January 1992. Ms. Oglanian acted as Associate Counsel for the Chicago- based
investment management firm, Kemper Financial Services, Inc., from June 1988
until December 1991. Ms. Oglanian has been the Secretary of the Funds since
May 1994.

Thomas P. Lemke, Vice President of the Funds.

Mr. Lemke has been Senior Vice President, Secretary, and General
Counsel of the Advisor since September 1994. For two years prior to joining
the Advisor, Mr. Lemke acted as Resident Counsel for Funds Management at J.P.
Morgan & Co., Inc. From February 1989 until April 1992, Mr. Lemke acted as
Associate General Counsel to Sanford C. Bernstein Co., Inc. For two years
prior to that, Mr. Lemke was Of Counsel at the Washington, D.C. law firm of Tew
Jorden & Schulte, a successor of Finley, Kumble Wagner. From August 1979 until
December 1986, Mr. Lemke worked at the Securities and Exchange Commission, most
notably as the Chief Counsel to the Division of Investment Management (November
1984 - December 1986), and as Special Counsel to the Office of Insurance
Products, Division of Investment Management (April 1982 - October 1984). Mr.
Lemke has been a Vice President of the Funds since October 1994.

Ronald A. Neville, Treasurer of the Funds.

Except for Messrs. Nevins, Davis, Kritzik and Vogt, the address of all
of the above persons is P.O. Box 2936, Milwaukee, Wisconsin 53201. Mr. Nevins'
address is 6075 Pelican Bay Boulevard, Naples, Florida 33963. Mr. Davis'
address is 161 North La Brea, Inglewood, California 90301, Mr. Kritzik's
address is 1123 North Astor Street, P.O. Box 92547, Milwaukee, Wisconsin
53202-0547. Mr. Vogt's address is 3003 East Third Avenue, Denver, Colorado
80206.

As of January 31, 1995, the officers and directors of the Funds in the
aggregate beneficially owned less than 1% of each Fund's then outstanding
shares. Directors and officers of the Funds who are officers, directors,
employees, or shareholders of the Advisor do not receive any remuneration from
the Funds for serving as directors or officers.

PRINCIPAL SHAREHOLDERS

As of January 31, 1995, the following persons owned of record or are
known by the Funds to own of record or beneficially, more than 5% of the listed
Fund's outstanding shares:

<TABLE>
<CAPTION>
NAME AND ADDRESS FUND/SHARES PERCENT OF CLASS
---------------- ----------- ----------------
<S> <C> <C>
Charles Schwab & Co., Inc. Advantage/20,234,783 23.30%
101 Montgomery Street Short-Term Bond/14,695,027 13.86
San Francisco, California 94104 Government/9,322,359 33.14
Income/1,042,404 7.71
</TABLE>

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<PAGE> 66

INVESTMENT ADVISOR AND DISTRIBUTOR

The Advisor to the Funds is Strong Capital Management, Inc. Mr.
Richard S. Strong controls the Advisor. Mr. Strong is the Chairman and a
director of the Advisor, Mr. Dragisic is the Vice Chairman and a director of
the Advisor, Mr. Totsky is a Senior Vice President of the Advisor, Mr. Lemke is
a Senior Vice President, Secretary and General Counsel of the Advisor, Ms.
Oglanian is an Associate Counsel of the Advisor and Mr. Zoeller is the
Treasurer of the Advisor. A brief description of each Fund's investment
advisory agreement ("Advisory Agreement") is set forth in the Prospectus under
"About the Funds - Management."

Each Fund's Advisory Agreement, dated April 13, 1995 (the "Advisory
Agreements"), was last approved by shareholders at the annual meeting of
shareholders held on April 13, 1995. Each Advisory Agreement is required to be
approved annually by either the Board of Directors of the Fund or by vote of a
majority of the Fund's outstanding voting securities (as defined in the
Investment Company Act of 1940 (the "Investment Company Act"). In either case,
each annual renewal must be approved by the vote of a majority of the Fund's
directors who are not parties to the Advisory Agreement or interested persons
of any such party, cast in person at a meeting called for the purpose of voting
on such approval. Each Advisory Agreement is terminable, without penalty, on 60
days' written notice by the Board of Directors of the Fund, by vote of a
majority of the Fund's outstanding voting securities, or by the Advisor. In
addition, an Advisory Agreement will terminate automatically in the event of
its assignment.

Under the terms of each Advisory Agreement, the Advisor manages the
Fund's investments subject to the supervision of the Fund's Board of Directors.
The Advisor is responsible for investment decisions and supplies investment
research and portfolio management. At its expense, the Advisor provides office
space and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. The Advisor places all orders for the
purchase and sale of the Fund's portfolio securities at the Fund's expense.

Except for expenses assumed by the Advisor as set forth above or by
the Distributor as described below with respect to the distribution of a Fund's
shares, a Fund is responsible for all its other expenses, including, without
limitation, interest charges, taxes, brokerage commissions, and similar
expenses; expenses of issue, sale, repurchase, or redemption of shares;
expenses of registering or qualifying shares for sale; expenses for printing
and distribution costs of prospectuses and quarterly financial statements
mailed to existing shareholders; and charges of custodians, transfer agents
(including the printing and mailing of reports and notices to shareholders),
registrars, auditing and legal services, clerical services related to
recordkeeping and shareholder relations, printing stock certificates; and fees
for directors who are not "interested persons" of the Advisor.

As compensation for its services, each Fund pays to the Advisor
monthly advisory fees at the following annual rates: (1) Treasury Fund: .40%
of average net assets; (2) Money Fund: .50% of average net assets; (3)
Advantage Fund: .60% of average net assets; (4) Short-Term Bond Fund: .625% of
average net assets; (5) Government Fund: .60% of average net assets; and (6)
Corporate Bond Fund: .625% of average net assets. (See "Shareholder Manual -
Determining Your Share Price" in the Prospectus.) From time to time, the
Advisor may voluntarily waive all or a portion of its management fee for a
Fund.

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<PAGE> 67

The following table sets forth certain information concerning advisory fees for
each Fund:

<TABLE>
<CAPTION>
Advisory Fee
Incurred Advisory Fee Advisory Fee
by Fund Waiver Paid by Fund
------- ------ ------------
<S> <C> <C> <C>
U.S. Treasury Fund
1992 $ 101,521 $ 101,521 $ 0
1993 $ 112,541 $ 112,541 $ 0
1994 $ $ $

Money Fund
1992 $2,248,285 $1,388,272 $ 860,013
1993 $1,771,980 $1,118,603 $ 653,377
1994 $ $ $

Advantage Fund
1992 $1,298,790 $ $
1993 $1,953,255 $ $
1994 $ $ $

Short-Term Bond Fund
1992 $2,339,853 $ 730,213 $1,609,640
1993 $6,876,818 $ 659,797 $6,217,021
1994 $ $ $

Government Fund
1992 $ $ 281,732 $
1993 $ 922,030 $ 205,059 $ 716,971
1994 $ $ $

Corporate Bond Fund
1992 $ 606,085 $ $
1993 $ 724,883 $ $
1994 $ $ $
</TABLE>

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

Each Advisory Agreement requires the Advisor to reimburse a Fund in
the event that the expenses and charges payable by the Fund in any fiscal year,
including the advisory fee but excluding taxes, interest, brokerage
commissions, and similar fees, exceed the percentage of the average net asset
value of the Fund for such year. Such excess is determined by valuations made
as of the close of each business day of the year, which is the most restrictive
percentage provided by the laws of the various states in which the Fund's
common stock is qualified for sale; or if the states in which the Fund's common
stock is qualified for sale impose no restrictions, the Advisor shall reimburse
the Fund in the event the expenses and charges payable by the Fund in any
fiscal year (as described above) exceed 2%. The most restrictive percentage
limitation currently applicable to a Fund is 2.5% of its average daily net
assets up to $30,000,000, 2% on the next $70,000,000 of its average daily net
assets and 1.5% of its average daily net assets in excess of $100,000,000.
Reimbursement of expenses in excess of the applicable limitation will be made
on a monthly basis and will be paid to the Fund by reduction of the Advisor's
fee, subject to later adjustment, month by month, for the remainder of the
Fund's fiscal year. The Advisor may from time to time voluntarily absorb
expenses for a Fund in addition to the reimbursement of expenses in excess of
application limitations.

On July 12, 1994, the Securities and Exchange Commission (the SEC)
filed an administrative action (Order) against SCM, Mr. Strong, and another
employee of SCM in connection with conduct that occurred between 1987 and early
1990. In re Strong/Corneliuson Capital Management, Inc., et al. Admin. Proc.
File No. 3-8411. The proceeding was settled by consent without admitting or
denying the allegations in the Order. The Order alleged that SCM and Mr. Strong
aided and abetted violations of Section 17(a) of the 1940 Act by effecting
trades between mutual funds, and between mutual funds and Harbour

- 22 -
<PAGE> 68

Investments Ltd. (Harbour), without complying with the exemptive provisions of
SEC Rule 17a-7 or otherwise obtaining an exemption. It further alleged that SCM
violated, and Mr. Strong aided and abetted violations of, the disclosure
provisions of the 1940 Act and the Investment Advisers Act of 1940 by
misrepresenting SCM's policy on personal trading and by failing to disclose
trading by Harbour, an entity in which principals of SCM owned between 18 and
25 percent of the voting stock. As part of the settlement, the respondents
agreed to a censure and a cease and desist order and SCM agreed to various
undertakings, including adoption of certain procedures and a limitation for six
months on accepting certain types of new advisory clients.

Under a Distribution Agreement dated December 1, 1993 with each Fund
(the "Distribution Agreements"), Strong Funds Distributors, Inc. (the
"Distributor"), a subsidiary of the Advisor, acts as underwriter of each Fund's
shares. The Distribution Agreements provide that the Distributor will use its
best efforts to distribute the Fund's shares. Since the Funds are "no-load"
funds, no sales commissions are charged on the purchase of Fund shares. Each
Distribution Agreement further provides that the Distributor will bear the
additional costs of printing prospectuses and shareholder reports which are
used for selling purposes, as well as advertising and any other costs
attributable to the distribution of a Fund's shares. The Distributor is an
indirect subsidiary of the Advisor and controlled by the Advisor and Richard S.
Strong. Prior to December 1, 1993, the Advisor acted as underwriter for the
Funds. On December 1, 1993, the Distributor succeeded to the broker-dealer
registration of the Advisor and, in connection therewith, the Distribution
Agreements were executed on substantially identical terms as the former
distribution agreements with the Advisor as distributor. The Distribution
Agreements are subject to the same termination and renewal provisions as are
described above with respect to the Advisory Agreements.

From time to time, the Distributor may hold in-house sales incentive
programs for its associated persons under which these persons may receive
non-cash compensation awards in connection with the sale and distribution of a
Fund's shares. These awards may include items such as, but not limited to,
gifts, merchandise, gift certificates, and payment of travel expenses, meals
and lodging. As required by the National Association of Securities Dealers,
Inc. or NASD's proposed rule amendments in this area, any in-house sales
incentive program will be multi- product oriented, i.e., any incentive will be
based on an associated person's gross production of all securities within a
product type and will not be based on the sales of shares of any specifically
designated mutual fund.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Advisor is responsible for decisions to buy and sell securities
for the Funds and for the placement of the Funds' portfolio business and the
negotiation of the commissions to be paid on such transactions. It is the
policy of the Advisor to seek the best execution at the best security price
available with respect to each transaction, in light of the overall quality of
brokerage and research services provided to the Advisor or the Funds. In
over-the-counter transactions, orders are placed directly with a principal
market maker unless it is believed that a better price and execution can be
obtained using a broker. The best price to the Funds means the best net price
without regard to the mix between purchase or sale price and commissions, if
any. In selecting broker-dealers and in negotiating commissions, the Advisor
considers the firm's reliability, the quality of its execution services on a
continuing basis, and its financial condition. Brokerage will not be allocated
based on the sale of any shares of the Strong Funds.

Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)")
permits an investment advisor, under certain circumstances, to cause an account
to pay a broker or dealer who supplies brokerage and research services a
commission for effecting a transaction in excess of the amount of commission
another broker or dealer would have charged for effecting the transaction.
Brokerage and research services include (a) furnishing advice as to the value
of securities, the advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities; (b) furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and the
performance of accounts; and (c) effecting securities transactions and
performing functions incidental thereto (such as clearance, settlement, and
custody).

In carrying out the provisions of the Advisory Agreements, the Advisor
may cause the Funds to pay a broker which provides brokerage and research
services to the Advisor a commission for effecting a securities transaction in
excess of the amount another broker would have charged for effecting the
transaction. The Advisor is of the opinion that the continued receipt of
supplemental investment research services from broker-dealers is essential to
its provision of high quality portfolio management services to the Funds. The
Advisory Agreements provide that such higher commissions will not be paid by a
Fund unless (a) the Advisor determines in good faith that the amount is
reasonable in relation to the services in terms of the particular transaction
or in terms of the Advisor's overall responsibilities with respect to the
accounts as to which it exercises investment discretion; (b) such

- 23 -
<PAGE> 69
payment is made in compliance with the provisions of Section 28(e), other
applicable state and federal laws, and the Advisory Agreement; and (c) in the
opinion of the Advisor, the total commissions paid by a Fund will be reasonable
in relation to the benefits to the Fund over the long term. The investment
advisory fees paid by the Funds under the Advisory Agreements are not reduced
as a result of the Advisor's receipt of research services.

The Treasury Fund paid brokerage commissions during 1992, 1993, and
1994 of $0, $0, and $________, respectively. The Money Fund paid brokerage
commissions during 1992, 1993 and 1994 of $0, $0, and $________, respectively.
The Advantage Fund paid brokerage commissions during 1992, 1993, and 1994 of
$74,779, $48,936, and $__________, respectively. The Short-Term Bond Fund paid
brokerage commissions during 1992, 1993, and 1994 of $202,786, $286,274, and
$__________, respectively. The Government Fund paid brokerage commissions
during 1992, 1993, and 1994 of $49,803, $63,123, and $_________, respectively.
The Corporate Bond Fund paid brokerage commissions during 1992, 1993, and 1994
of $13,475, $60,543 and $__________, respectively.

Generally, research services provided consist of portfolio pricing and
capital changes services and reports, research reports dealing with
macroeconomic trends and monetary and fiscal policy, research reports on
individual companies and industries, and information dealing with market trends
and technical analysis. Such brokers may pay for all or a portion of computer
hardware and software costs relating to the pricing of securities. Where the
Advisor itself receives both administrative benefits and research and brokerage
services from the services provided by brokers, it makes a good faith
allocation between the administrative benefits and the research and brokerage
services. The Advisor's receipt of these administrative benefits arises from
its ability, in certain cases, to direct brokerage to certain firms in
connection with its management of client portfolios. In making good faith
allocations between administrative benefits and research and brokerage
services, a conflict of interest may exist by reason of the Advisor's
allocation of the costs of such benefits and services between those that
primarily benefit the Advisor and those that primarily benefit its clients,
such as the Funds.

The Advisor places portfolio transactions for other advisory accounts,
including other mutual funds managed by the Advisor. Research services
furnished by firms through which the Funds effect their securities transactions
may be used by the Advisor in servicing all of its accounts; not all of such
services may be used by the Advisor in connection with the Funds. In the
opinion of the Advisor, it is not possible to measure separately the benefits
from research services to each of the accounts (including the Funds) managed by
the Advisor. Because the volume and nature of the trading activities of the
accounts are not uniform, the amount of commissions in excess of those charged
by another broker paid by each account for brokerage and research services will
vary. However, in the opinion of the Advisor, such costs to the Funds will not
be disproportionate to the benefits received by the Funds on a continuing
basis.

The Advisor seeks to allocate portfolio transactions equitably
whenever concurrent decisions are made to purchase or sell securities by the
Funds and another advisory account. In some cases, this procedure could have an
adverse effect on the price or the amount of securities available to the Funds.
In making such allocations between a Fund and other advisory accounts, the main
factors considered by the Advisor are the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held, and the opinions of the persons responsible for recommending
the investment.

For the 1992, 1993, and 1994 fiscal periods ended December 31, 1994,
the Advantage, Short-Term Bond, Government, and Corporate Bond Funds respective
portfolio turnover rates were as follows: (1) Advantage Fund ____%, ____% and
____%; (2) Short-Term Bond Fund: 353.3%, 444.9% and ____%; (3) Government Fund:
628.8%, 520.9% and ____%; and (4) Corporate Bond Fund: 557.0%, 665.8% and
____%. [The above listed portfolio turnover rates for the respective Funds
were higher than anticipated substantially because each Fund employed a trading
strategy to preserve the favorable tax treatment available to it under the
Internal Revenue Code of 1986 (the "Code"), as amended.]

As of December 31, 1994, the [List Funds] has acquired securities of
its regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or
their parents in the following amounts:

Regular Broker or Dealer or Parent Issuer Value of Securities
Owned as of December 31, 1994*

*To the nearest thousandth.

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<PAGE> 70

CUSTODIAN

As custodian of each Fund's assets, Firstar Trust Company has custody
of all securities and cash of the Funds, delivers and receives payment for
securities sold, receive and pay for securities purchased, collect income from
investments, and perform other duties, all as directed by the officers of the
Funds. With respect to the Money Fund only, the custodian has entered into a
sub-custodial arrangement with First National Bank of Chicago ("First Chicago")
pursuant to which First Chicago may retain custody of certain Money Fund
foreign securities. The custodian and, if applicable, the sub-custodian are in
no way responsible for any of the investment policies or decisions of the
Funds.

TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT

The Advisor acts as transfer agent and dividend-disbursing agent for
the Funds. The Advisor is compensated based on an annual fee per open account
of $32.50 for the Money Market Funds, and $31.50 for the Advantage, Short-Term
Bond, Government and Corporate Bond Funds, plus out-of-pocket expenses, such as
postage and printing expenses in connection with shareholder communications.
The Advisor also receives an annual fee per closed account of $4.20 from each
Fund. The fees received and the services provided as transfer agent and
dividend disbursing agent are in addition to those received and provided by the
Advisor under the Advisory Agreement. In addition, the Advisor provides
certain printing and mailing services for the Funds, such as printing and
mailing of shareholder account statements, checks, and tax forms.

The following table sets forth certain information concerning amounts
paid by the Funds for transfer agency and dividend disbursing and printing and
mailing services:

<TABLE>
<CAPTION>
Transfer Agency and Dividend Disbursement
Services Charges Incurred
----------------------------------------------------------------------------
Per Printing and Amounts Net Amount
Account Expense Mailing Waived By Paid By
Fund Charges Reimbursements Services Advisor Fund
-------- ------- -------------- -------- ------- -----
<S> <C> <C> <C> <C> <C>
U.S. Treasury Fund
1992 $ 0 $ 9,544 $ 1,134 $ $
1993 0 0 0
1994 _______ _______ _______ _______ ________
Money Fund
1992 $1,535,244 $700,855 $73,041 $ $
1993 1,257,905 486,852 50,097
1994 _______ _______ _______ _______ ________
Advantage Fund
1992 $ 438,374 $140,534 $19,474 $ $
1993 515,380 139,749 19,731
1994 ______ _______ _______ _______ ________
Short-Term Bond Fund
1992 $525,105 $ 38,908 $ 6,071 $ $
1993 1,818,354 503,093 65,804
1994 _______ _______ _______ _______ ________
Government Fund
1992 $184,550 $ 49,701 $ 6,981 $ $
1993 334,277 76,557 10,009 $
1994 _________ _______ _________ _______ ________
Corporate Bond Fund
1992 $409,159 $ 85,929 $ 14,271 $ $
1993 374,189 82,743 11,692 $
1994 _________ _______ ________ _______ _______
</TABLE>

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

From time to time, the Funds, directly or indirectly through
arrangements with the Advisor, may pay amounts to third parties that provide
transfer agent and other administrative services relating to the Funds to
persons who beneficially own interests in the Funds, such as participants in
401k plans. These services may include, among other things, sub-accounting
services, answering inquiries relating to the Funds, transmitting, on behalf of
the Funds, proxy statements, annual reports, updated prospectuses, other
communications regarding the Funds, and related services as the Funds or
beneficial owners may reasonably

- 25 -
<PAGE> 71

request. In such cases, the Funds will not pay fees at a rate that is
greater than the rate the Funds are currently paying the Advisor for providing
these services to Fund shareholders.

TAXES

GENERAL

As indicated under "About the Funds - Distributions and Taxes" in the
Prospectus, each Fund intends to continue to qualify annually as a regulated
investment company ("RIC") under the Internal Revenue Code of 1986, as amended
(the "Code"). This qualification does not involve government supervision of
the Funds' management practices or policies.

In order to qualify for treatment as a RIC under the Code, each Fund
must distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of net investment
income and net short-term capital gain) and must meet several additional
requirements. Among these requirements are the following: (1) a Fund must
derive at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities loans, and gains from the sale or
other disposition of securities or other income (including gains from options
or futures) derived with respect to its business of investing in securities
("Income Requirement"); (2) a Fund must derive less than 30% of its gross
income each taxable year from the sale or other disposition of securities, or
options or futures, that were held for less than three months ("30%
Limitation"); (3) at the close of each quarter of a Fund's taxable year, at
least 50% of the value of its total assets must be represented by cash and cash
items, U.S. government securities, securities of other RICs, and other
securities, with these other securities limited, in respect of any one issuer,
to an amount that does not exceed 5% of the value of the Fund's total assets
and that does not represent more than 10% of the issuer's outstanding voting
securities; and (4) at the close of each quarter of a Fund's taxable year, not
more than 25% of the value of its total assets may be invested in securities
(other than U.S. government securities or the securities of other RICs) of any
one issuer.

If Fund shares are sold at a loss after being held for six months or
less, the loss will be treated as long-term, instead of short-term, capital
loss to the extent of any capital gain distributions received on those shares.

Each Fund will be subject to a nondeductible 4% excise tax ("Excise
Tax") to the extent it fails to distribute by the end of any calendar year
substantially all of its ordinary income for that year and capital gain net
income for the one-year period ending on October 31 of that year, plus certain
other amounts.

FOREIGN TRANSACTIONS

Interest and dividends received by a Fund may be subject to income,
withholding, or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
a Fund's total assets at the close of its taxable year consists of securities
of foreign corporations, it will be eligible to, and may, file an election with
the Internal Revenue Service that will enable its shareholders, in effect, to
receive the benefit of the foreign tax credit with respect to any foreign and
U.S. possessions income taxes paid by it. Pursuant to the election, the Fund
will treat those taxes as dividends paid to it shareholders and each
shareholder will be required to (1) include in gross income, and treat as paid
by him, his proportionate share of those taxes, (2) treat his share of those
taxes and of any dividend paid by the Fund that represents income from foreign
or U.S. possessions sources as his own income from those sources, and (3)
either deduct the taxes deemed paid by him in computing his taxable income or,
alternatively, use the foregoing information in calculating the foreign tax
credit against his federal income tax. A Fund will report to its shareholders
shortly after each taxable year their respective shares of its income from
sources within, and taxes paid to, foreign countries and U.S. possessions if it
makes this election.

Each Fund will maintain its accounts and calculate its income in U.S.
dollars. In general, gain or loss (1) from the disposition of foreign
currencies, (2) from the disposition of foreign-currency-denominated debt
securities that are attributable to fluctuations in exchange rates between the
date the securities are acquired and their disposition date, and (3)
attributable to fluctuations in exchange rates between the time a Fund accrues
interest or other receivables or expenses or other liabilities denominated in a
foreign currency and the time a Fund actually collects those receivables or
pays those liabilities, will be treated as ordinary income or loss. A
foreign-currency-denominated debt security acquired by a Fund may bear interest
at a high normal

- 26 -
<PAGE> 72

rate that takes into account expected decreases in the value of the principal
amount of the security due to anticipated currency devaluations; in that case,
the Fund would be required to include the interest in income as it accrues but
generally would realize a currency loss with respect to the principal only when
the principal was received (through disposition or upon maturity).

Three bills passed by Congress in 1991 and 1992 and vetoed by
President Bush would have substantially modified the taxation of U.S.
shareholders of foreign corporations. The "Tax Simplification and Technical
Corrections Bill of 1993," approved in November 1993 by the House Ways and
Means Committee, contains the same modifications. It is unclear at this time
whether, and in what form, the proposed modifications may be enacted into law.

DERIVATIVE INSTRUMENTS

The use of derivatives strategies, such as purchasing and selling
(writing) options and futures, involves complex rules that will determine for
income tax purposes the character and timing of recognition of the gains and
losses the Funds realize in connection therewith. Income from transactions in
options and futures derived by each Fund with respect to its business of
investing in securities will qualify as permissible income under the Income
Requirement. However, income from the disposition of options and futures will
be subject to the 30% Limitation if they are held for less than three months.

If a Fund satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the Fund satisfies the
30% Limitation. Thus, only the net gain (if any) from the designated hedge
will be included in gross income for purposes of that limitation. The Funds
intend that, when they engage in hedging strategies, the hedging transactions
will qualify for this treatment, but at the present time it is not clear
whether this treatment will be available for all of the Funds' hedging
transactions. To the extent this treatment is not available or is not elected
by a Fund, it may be forced to defer the closing out of certain options or
futures contracts beyond the time when it otherwise would be advantageous to do
so, in order for the Fund to qualify as a RIC.

For federal income tax purposes, each Fund is required to recognize as
income for each taxable year its net unrealized gains and losses on options and
futures contracts that are subject to section 1256 of the Code ("Section 1256
Contracts") and are held by the Fund as of the end of the year, as well as
gains and losses on Section 1256 Contracts actually realized during the year.
Except for Section 1256 Contracts that are part of a "mixed straddle" and with
respect to which the Fund makes a certain election, any gain or loss recognized
with respect to Section 1256 Contracts is considered to be 60% long-term
capital gain or loss and 40% short-term capital gain or loss, without regard to
the holding period of the Section 1256 Contract. Unrealized gains on Section
1256 Contracts that have been held by a Fund for less than three months as of
the end of its taxable year, and that are recognized for federal income tax
purposes as described above, will not be considered gains on investments held
for less than three months for purposes of the 30% Limitation.

ZERO-COUPON, STEP-COUPON, AND PAY-IN-KIND SECURITIES

Certain Funds may acquire zero-coupon, step-coupon, or other
securities issued with original issue discount. As the holder of those
securities, a Fund must include in its income the original issue discount that
accrues on the securities during the taxable year, even if the Fund receives no
corresponding payment on the securities during the year. Similarly, the Fund
must include in its gross income securities it receives as "interest" on
pay-in-kind securities. Because a Fund annually must distribute substantially
all of its investment company taxable income, including any original issue
discount and other non-cash income, to satisfy the Distribution Requirement and
to avoid imposition of the Excise Tax, it may be required in a particular year
to distribute as a dividend an amount that is greater than the total amount of
cash it actually receives. Those distributions may be made from the proceeds
on sales of portfolio securities, if necessary. A Fund may realize capital
gains or losses from those sales, which would increase or decrease its
investment company taxable income or net capital gain, or both. In addition,
any such gains may be realized on the disposition of securities held for less
than three months. Because of the 30% Limitation, any such gains would reduce
the Fund's ability to sell other securities, or options, futures contracts,
held for less that three months that it might wish to sell in the ordinary
course of its portfolio management.

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<PAGE> 73

DETERMINATION OF NET ASSET VALUE

As set forth in the Prospectus under the caption "Shareholder Manual -
Determining Your Share Price," the net asset value of each Fund will be
determined as of the close of trading on each day the New York Stock Exchange
is open for trading. None of the Funds determines its net asset value on days
the New York Stock Exchange is closed and at other times described in the
Prospectus. The New York Stock Exchange is closed on New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Additionally, if any of the
aforementioned holidays falls on a Saturday, the New York Stock Exchange will
not be open for trading on the preceding Friday and when any such holiday falls
on a Sunday, the New York Stock Exchange will not be open for trading on the
succeeding Monday, unless unusual business conditions exist, such as the ending
of a monthly or yearly accounting period.

The Money Market Funds value their securities on the amortized cost
basis and seek to maintain their net asset value at a constant $1.00 per share.
In the event a difference of 1/2 of 1% or more were to occur between the net
asset value calculated by reference to market values and the Money Market
Funds' $1.00 per share net asset value, or if there were any other deviation
which the Board of Directors believed would result in a material dilution to
shareholders or purchasers, the Board of Directors would consider taking any
one or more of the following actions or any other action considered
appropriate: selling portfolio securities to shorten average portfolio
maturity or to realize capital gains or losses, reducing or suspending
shareholder income accruals, redeeming shares in kind, or utilizing a value per
unit based upon available indications of market value. Available indications
of market value may include, among other things, quotations or market value
estimates of securities and/or values based on yield data relating to money
market securities that are published by reputable sources.

SHAREHOLDER SERVICES

As described under "About the Funds - Distributions and Taxes" in the
Prospectus, all income dividends and capital gain distributions will be
invested automatically in additional Fund shares unless the Fund is otherwise
notified in writing.

SYSTEMATIC WITHDRAWAL PLAN

You can set up automatic withdrawals from your account at monthly,
quarterly, or annual intervals. To begin distributions, you must have an
initial balance of at least $5,000 in your account. To establish the
Systematic Withdrawal Plan, call 1-800-368-3863 and request an application. To
establish the Systematic Withdrawal Plan, you deposit your Fund shares with the
Fund and appoint it as your agent to effect redemptions of Fund shares held in
your account for the purpose of making monthly, quarterly, or annual withdrawal
payments of a fixed amount to you out of your account. Your signature should be
guaranteed by an eligible guarantor institution as described under "Shareholder
Manual - Special Situations" in the Prospectus.

The minimum amount of a withdrawal payment is $50. These payments will
be made from the proceeds of periodic redemption of shares in the account at
net asset value. Redemptions will be made on the fifth business day preceding
the last day of each month or, if that day is a holiday, on the next preceding
business day.

Withdrawal payments cannot be considered to be yield or income on the
shareholder's investment since portions of each payment will normally consist
of a return of capital. Depending on the size or the frequency of the
disbursements requested and the fluctuation in the value of a Fund's portfolio,
redemptions for the purpose of making such disbursements may reduce or even
exhaust your account.

You may vary the amount or frequency of withdrawal payments,
temporarily discontinue them, or change the designated payee or payee's address
by notifying the Fund.

AUTOMATIC INVESTMENT PLAN

An Automatic Investment Plan may be established at any time. By
participating in the Automatic Investment Plan, you may automatically make
purchases of shares of a Fund on a regular, convenient basis. You may choose to
make contributions on any day of each month in amounts of $50 or more.

- 28 -
<PAGE> 74

Under the Automatic Investment Plan, your bank or other financial
institution debits preauthorized amounts drawn on your account each month and
applies such amounts to the purchase of shares of a Fund. The Automatic
Investment Plan can be implemented with any financial institution that is a
member of the Automated Clearing House. An Automatic Investment Plan form is
attached to the Prospectus. No service fee is charged by the Funds for
participating in the Automatic Investment Plan.

GENERAL PROCEDURES FOR SHAREHOLDER ACCOUNTS

As set forth under "About the Funds - Organization" in the Prospectus,
certificates for Fund shares are only issued upon written request.

Either an investor or the respective Fund, by written notice to the
other, may terminate the investor's participation in the plans, programs,
privileges, or other services described under "Shareholder Manual - Shareholder
Services" in the Prospectus without penalty at any time, as described in the
Prospectus.

Your account may be terminated by a Fund on not less than 30 days'
notice if, at the time of any transfer or redemption of shares in the account,
the value of the remaining shares in the account at the current offering price
falls below the $500. Upon any such termination, the shares will be redeemed at
the then current net asset value and a check for the proceeds of redemption
sent within seven days of such redemption.

TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGES AND AUTOMATIC EXCHANGE PLAN

A discussion of the Telephone Exchange and Redemption Privileges and
Automatic Exchange Plan is set forth in the Prospectus under the captions
"Shareholder Manual - Shareholder Services."

Shares of a Fund and any other funds sponsored by the Advisor may be
exchanged for each other at relative net asset values. Exchanges will be
effected by redemption of shares of the Fund held and purchase of shares of the
fund for which Fund shares are being exchanged (the "New Fund"). For federal
income tax purposes, any such exchange constitutes a sale upon which a capital
gain or loss will be realized, depending upon whether the value of the shares
being exchanged is more or less than the shareholder's adjusted cost basis. If
you are interested in exercising any of these exchange privileges, you should
obtain prospectuses of other funds sponsored by the Advisor from the Advisor.
Upon a telephone exchange, the transfer agent establishes a new account in the
New Fund with the same registration and dividend and capital gains options as
the redeemed account, unless otherwise specified, and confirms the purchase to
you. In order to establish a Systematic Withdrawal Plan for the new account,
however, an exchanging shareholder must file a specific written request.

The Funds employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. The Funds may not be liable for losses
due to unauthorized or fraudulent instructions. Such procedures include but are
not limited to requiring a form of personal identification prior to acting on
instructions received by telephone, providing written confirmations of such
transactions to the address of record, and tape recording telephone
instructions.

The Telephone Exchange and Redemption Privileges and Automatic
Exchange Plan are available only in states where shares of the New Fund may be
sold, and may be modified or discontinued at any time. Additional information
regarding the Telephone Exchange and Redemption Privileges and Automatic
Exchange Plan is contained in the Funds' Prospectus.

RETIREMENT PLANS

Individual Retirement Account (IRA): Everyone under age 70 1/2 with earned
income may contribute to a tax-deferred IRA. The Strong Funds offer a prototype
plan for you to establish your own IRA. You are allowed to contribute up to the
lesser of $2,000 or 100% of your earned income each year to your IRA. Under
certain circumstances, your contribution will be deductible.

Direct Rollover IRA: To avoid the mandatory 20% federal withholding tax on
distributions, you must transfer the qualified retirement or Code section
403(b) plan distribution directly into an IRA. This tax cannot be avoided if
you receive a distribution and then roll it over into an IRA. The amount of
your Direct Rollover IRA contribution will not be included in your taxable
income for the year.

- 29 -
<PAGE> 75

Simplified Employee Pension Plan (SEP-IRA): A SEP-IRA allows an employer to
make deductible contributions to separate IRA accounts established for each
eligible employee.

Salary Reduction Simplified Employee Pension Plan (SAR SEP-IRA): A SAR SEP-IRA
is a type of SEP-IRA in which an employer may allow employees to defer part of
their salaries and contribute to an IRA account. These deferrals help lower the
employees' taxable income.

Defined Contribution Plan: A defined contribution plan allows self-employed
individuals, partners, or a corporation to provide retirement benefits for
themselves and their employees. There are three plan types: a profit-sharing
plan, a money purchase pension plan, and a paired plan (a combination of a
profit-sharing plan and a money purchase plan).

401(k) Plan: A 401(k) plan is a type of profit-sharing plan that allows
employees to have part of their salary contributed to a retirement plan which
will earn tax-deferred income. A 401(k) plan is funded by employee
contributions, employer contributions, or a combination of both.

403(b)(7) Plan: A tax-sheltered custodial account designed to qualify under
section 403(b)(7) of the Code is available for use by employees of certain
educational, non-profit, hospital, and charitable organizations.

FUND ORGANIZATION

Each Fund is a Wisconsin corporation that is authorized to offer
separate series of shares representing interests in separate portfolios of
securities, each with differing investment objectives. The shares in any one
portfolio may, in turn, be offered in separate classes, each with differing
preferences, limitations or relative rights. However, the Articles of
Incorporation for each of the Funds provides that if additional classes of
shares are issued by a Fund, such new classes of shares may not affect the
preferences, limitations or relative rights of the Fund's outstanding shares.
In addition, the Board of Directors of each Fund is authorized to allocate
assets, liabilities, income and expenses to each series and class. Classes
within a series may have different expense arrangements than other classes of
the same series and, accordingly, the net asset value of shares with a series
may differ. Finally, all holders of shares of a Fund may vote on each matter
presented to shareholders for action except with respect to any matter which
affects only one or more series or class, in which case only the shares of the
affected series or class is entitled to vote. Fractional shares have the same
rights proportionately as do full shares. Shares of the Funds have no
preemptive, conversion, or subscription rights. Each Fund currently has only
one series of common stock outstanding. If a Fund issues additional series, the
assets belonging to each series of shares will be held separately by the
custodian, and in effect each series will be a separate fund.

SHAREHOLDER MEETINGS

Each Fund is a Wisconsin corporation organized on the following dates
and has the following authorized shares of capital stock:

<TABLE>
<CAPTION>
Incorporation Authorized
Fund Date Shares Par Value ($)
---- ------------- ---------- -------------
<S> <C> <C> <C>
Treasury Fund 02/24/89 10,000,000,000 .00001
Money Fund 07/19/85 10,000,000,000 .00001
Advantage Fund 08/31/88 1,000,000,000 .0001
Short-Term Bond Fund 03/20/87 1,000,000,000 .001
Government Fund 08/08/86 100,000,000 .001
Corporate Bond Fund 07/19/85 300,000,000 .001
</TABLE>

The Wisconsin Business Corporation Law permits registered investment
companies, such as the Funds, to operate without an annual meeting of
shareholders under specified circumstances if an annual meeting is not required
by the Investment Company Act. The Funds have adopted the appropriate
provisions in their Bylaws and may, at their discretion, not hold an annual
meeting in any year in which the election of directors is not required to be
acted on by shareholders under the Investment Company Act.

- 30 -
<PAGE> 76

The Funds' Bylaws also contain procedures for the removal of directors
by its shareholders. At any meeting of shareholders, duly called and at which
a quorum is present, the shareholders may, by the affirmative vote of the
holders of a majority of the votes entitled to be cast thereon, remove any
director or directors from office and may elect a successor or successors to
fill any resulting vacancies for the unexpired terms of removed directors.

Upon the written request of the holders of shares entitled to not less
than ten percent (10%) of all the votes entitled to be cast at such meeting,
the Secretary of a Fund shall promptly call a special meeting of shareholders
for the purpose of voting upon the question of removal of any director.
Whenever ten or more shareholders of record who have been such for at least six
months preceding the date of application, and who hold in the aggregate either
shares having a net asset value of at least $25,000 or at least one percent
(1%) of the total outstanding shares, whichever is less, shall apply to the
corporation's Secretary in writing, stating that they wish to communicate with
other shareholders with a view to obtaining signatures to a request for a
meeting as described above and accompanied by a form of communication and
request which they wish to transmit, the Secretary shall within five business
days after such application either: (1) afford to such applicants access to a
list of the names and addresses of all shareholders as recorded on the books of
the Fund; or (2) inform such applicants as to the approximate number of
shareholders of record and the approximate cost of mailing to them the proposed
communication and form of request.

If the Secretary elects to follow the course specified in clause (2)
of the last sentence of the preceding paragraph, the Secretary, upon the
written request of such applicants, accompanied by a tender of the material to
be mailed and of the reasonable expenses of mailing, shall, with reasonable
promptness, mail such material to all shareholders of record at their addresses
as recorded on the books unless within five business days after such tender the
Secretary shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement signed by at
least a majority of the Board of Directors to the effect that in their opinion
either such material contains untrue statements of fact or omits to state facts
necessary to make the statements contained therein not misleading, or would be
in violation of applicable law, and specifying the basis of such opinion.

After opportunity for hearing upon the objections specified in the
written statement so filed, the Commission may, and if demanded by the Board of
Directors or by such applicants shall, enter an order either sustaining one or
more of such objections or refusing to sustain any of them. If the Commission
shall enter an order refusing to sustain any of such objections, or if, after
the entry of an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all objections so
sustained have been met, and shall enter an order so declaring, the Secretary
shall mail copies of such material to all shareholders with reasonable
promptness after the entry of such order and the renewal of such tender.

PERFORMANCE INFORMATION

As described in the "About the Funds - Performance Information"
section of the Funds' prospectus, each Fund's historical performance or return
may be shown in the form of "yield." In addition, the Advantage, Short-Term
Bond, Government, and Corporate Bond Funds' performance may be shown in the
form of "average annual total return," "total return," and "cumulative total
return," and the Money Market Fund's performance may be shown in the form of
effective yield. From time to time, the advisor agrees to waive or reduce its
management fee and to absorb certain operating expenses for the Fund. All
performance and returns noted herein are historical and do not necessarily
represent the future performance of the Fund.

YIELD

The Advantage, Short-Term Bond, Government, and Corporate Bond Funds'
yield is computed in accordance with a standardized method prescribed by rules
of the Commission. Under that method, the current yield quotation for a Fund
is based on a one month or 30-day period. The yield is computed by dividing
the net investment income per share earned during the 30-day or one month
period by the maximum offering price per share on the last day of the period,
according to the following formula:

YIELD = 2[(a-b + 1)6 - 1]
cd

- 31 -
<PAGE> 77

<TABLE>
<S> <C>
Where: a = dividends and interest earned during the period.
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>

For the 30-day period ended December 31, 1994, the Advantage Fund's
yield was _____%, the Short-Term Bond Fund's yield was _____%, the Government
Fund's yield was _____% and the Corporate Bond Fund's yield was _____%. For
this period, the Advisor [absorbed expenses and/or waived management fees] of
_____% for the [name of Fund or Funds]. Without these waivers and/or
absorptions, the [name of Fund or Funds] yield would have been _____%. In
computing yield, the Funds follow certain standardized accounting practice
specified by Commission rules. These practices are not necessarily consistent
with those that the Funds use to prepare annual and interim financial
statements in conformity with generally accepted accounting principles.

CURRENT YIELD

The Money Market Funds' current yield quotation is based on a
seven-day period and is computed as follows. The first calculation is net
investment income per share, which is accrued interest on portfolio securities,
plus or minus amortized premium, less accrued expenses. This number is then
divided by the price per share (expected to remain constant at $1.00) at the
beginning of the period ("base period return"). The result is then divided by
7 and multiplied by 365 and the resulting yield figure is carried to the
nearest one-hundredth of one percent. Realized capital gains or losses and
unrealized appreciation or depreciation of investments are not included in the
calculation. During this period, the Advisor [waived management fees and/or
absorbed expenses] of _____% for the [name the Fund]. Without the waiver
and/or absorption, the [name the Fund] current yield would have been _____%.
For the seven-day period ended December 31, 1994, the Treasury Fund's current
yield was _____% and the Money Fund's current yield was _____%.

EFFECTIVE YIELD

The Money Market Funds' effective yield is determined by taking the base period
return (computed as described above) and calculating the effect of assumed
compounding. The formula for the effective yield is: (base period return +
1)(365/7) - 1. For the seven-day period ended December 31, 1994, the Treasury
Fund's effective yield was _____% and the Money Fund's effective yield was
_____%. [Without the waiver and/or absorption noted above, the [name of Fund]
effective yield would have been _____%.]

DISTRIBUTION RATE

The distribution rate is computed, according to a non-standardized
formula, by dividing the total amount of actual distributions per share paid by
a Fund over a twelve month period by the Fund's net asset value on the last day
of the period. The distribution rate differs from a Fund's yield because the
distribution rate includes distributions to shareholders from sources other
than dividends and interest, such as premium income from option writing and
short-term capital gains. Therefore, a Fund's distribution rate may be
substantially different than its yield. Both a Fund's yield and distribution
rate will fluctuate.

AVERAGE ANNUAL TOTAL RETURN

The Advantage, Short-Term Bond, Government, and Corporate Bond Funds'
average annual total return quotation is computed in accordance with a
standardized method prescribed by rules of the Commission. The average annual
total return for the Fund for a specific period is found by first taking a
hypothetical $10,000 investment ("initial investment") in the Fund's shares on
the first day of the period and computing the "redeemable value" of that
investment at the end of the period. The redeemable value is then divided by
the initial investment, and this quotient is taken to the Nth root (N
representing the number of years in the period) and 1 is subtracted from the
result, which is then expressed as a percentage. The calculation assumes that
all income and capital gains dividends paid by the Fund have been reinvested at
net asset value on the reinvestment dates during the period. Average annual
total return figures for various periods are set forth in the table below.

TOTAL RETURN

- 32 -
<PAGE> 78

Calculation of each Fund's total return is not subject to a
standardized formula. Total return performance for a specific period is
calculated by first taking an investment (assumed below to be $10,000)
("initial investment") in the Fund's shares on the first day of the period and
computing the "ending value" of that investment at the end of the period. The
total return percentage is then determined by subtracting the initial
investment from the ending value and dividing the remainder by the initial
investment and expressing the result as a percentage. The calculation assumes
that all income and capital gains dividends paid by the Fund have been
reinvested at net asset value on the reinvestment dates during the period.
Total return may also be shown as the increased dollar value of the
hypothetical investment over the period. Total return figures for various
periods are set forth in the table below.

CUMULATIVE TOTAL RETURN

Calculation of each Fund's cumulative total return is not subject to a
standardized formula and represents the simple change in value of our
investment over a stated period and may be quoted as a percentage or as a
dollar amount. Total returns and cumulative total returns may be broken down
into their components of income and capital (including capital gains and
changes in share price) in order to illustrate the relationship between these
factors and their contributions to total return.

A Fund's performance figures are based upon historical results and are
not necessarily representative of future performance. Each Fund's shares are
sold at net asset value per share. The Advantage, Short-Term Bond,
Government, and Corporate Bond Fund's returns and net asset value will
fluctuate and shares are redeemable at the then current net asset value of the
Fund, which may be more or less than original cost. The yield for the Money
Market Funds will fluctuate. While the Money Market Funds seek to maintain a
stable net asset value of $1.00, there is no assurance that either Fund will be
able to do so. The Money Fund's yield will fluctuate. While the Money Fund
seeks to maintain a stable net asset value of $1.00, there is no assurance that
it will be able to do so. An investment in the Money Fund is neither insured
nor guaranteed by the U.S. government. Factors affecting a Fund's performance
include general market conditions, operating expenses and investment
management. Any additional fees charged by a dealer or other financial
services firm would reduce the returns described in this section.

The figures below show performance information for various periods
ended December 31, 1994. No adjustment has been made for taxes, if any,
payable on dividends. The periods indicated were ones of fluctuating
securities prices.

ADVANTAGE FUND
<TABLE>
<CAPTION>
Total Average Annual
Return Total Return
------ ------------
Initial Ending Value
$10,000 December 31, Percentage Percentage
Investment 1994 Increase Increase
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Life of Fund(1) $10,000 $______ _____% %
Five Years $10,000 ______ _____ ____
One Year 10,000 ______ _____
-----------------------
</TABLE>

(1) November 25, 1988

SHORT-TERM BOND FUND
<TABLE>
<CAPTION>
Total Average Annual
Return Total Return
------ ------------
Initial Ending Value
$10,000 December 31, Percentage Percentage
Investment 1994 Increase Increase
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Life of Fund(1) $10,000 $_______ _____% %
Five Years 10,000 _______ _____ _____
</TABLE>

- 33 -
<PAGE> 79

(1) August 31, 1987

GOVERNMENT FUND

<TABLE>
<CAPTION>
Total Average Annual
Return Total Return
------ ------------
Initial Ending Value
$10,000 December 31, Percentage Percentage
Investment 1994 Increase Increase
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Life of Fund(1) $10,000 $______ _____% _____%
Five Years 10,000 ______ _____ _____
One Year 10,000 ______ _____ _____
------------------------
</TABLE>

(1) October 29, 1986

CORPORATE BOND FUND

(1) December 12, 1985

The Advantage, Short-Term Bond, Government, and Corporate Bond Funds'
total return for the three months ending March 31, 1995, were ____%, ____%,
____% and ____%, respectively.

COMPARISONS

(1) U.S. TREASURY BILLS, NOTES, OR BONDS
Investors may want to compare the performance of a Fund to that of
U.S. Treasury bills, notes or bonds, which are issued by the U.S. government.
Treasury obligations are issued in selected denominations. Rates of Treasury
obligations are fixed at the time of issuance and payment of principal and
interest is backed by the full faith and credit of the United States Treasury.
The market value of such instruments will generally fluctuate inversely with
interest rates prior to maturity and will equal par value at maturity.
Generally, the values of obligations with shorter maturities will fluctuate
less than those with longer maturities.

(2) CERTIFICATES OF DEPOSIT
Investors may want to compare a Fund's performance to that of
certificates of deposit offered by banks and other depository institutions.
Certificates of deposit may offer fixed or variable interest rates and
principal is guaranteed and may be insured. Withdrawal of the deposits prior to
maturity normally will be subject to a penalty. Rates offered by banks and
other depository institutions are subject to change at any time specified by
the issuing institution.

(3) MONEY MARKET FUNDS
Investors may also want to compare performance of a Fund to that of
money market funds. Money market fund yields will fluctuate and shares are not
insured, but share values usually remain stable.

- 34 -
<PAGE> 80
(4) LIPPER ANALYTICAL SERVICES, INC. ("LIPPER") AND OTHER INDEPENDENT
RANKING ORGANIZATIONS
From time to time, in marketing and other fund literature, a Fund's
performance may be compared to the performance of other mutual funds in general
or to the performance of particular types of mutual funds, with similar
investment goals, as tracked by independent organizations. Among these
organizations, Lipper, a widely used independent research firm which ranks
mutual funds by overall performance, investment objectives, and assets, may be
cited. Lipper performance figures are based on changes in net asset value,
with all income and capital gain dividends reinvested. Such calculations do
not include the effect of any sales charges imposed by other funds. A Fund
will be compared to Lipper's appropriate fund category, that is, by fund
objective and portfolio holdings. A Fund's performance may also be compared to
the average performance of its Lipper category.

(5) MORNINGSTAR, INC.
A Fund's performance may also be compared to the performance of other
mutual funds by Morningstar, Inc. which ranks funds on the basis of historical
risk and total return. Morningstar's rankings range from five stars (highest)
to one star (lowest) and represent Morningstar's assessment of the historical
risk level and total return of a fund as a weighted average for 3, 5, and 10
year periods. Rankings are not absolute or necessarily predictive of future
performance.

(6) INDEPENDENT SOURCES
Evaluations of Fund performance made by independent sources may also
be used in advertisements concerning a Fund, including reprints of, or
selections from, editorials or articles about a Fund, especially those with
similar objectives. Sources for Fund performance information and articles
about a Fund may include publications such as Money, Forbes, Kiplinger's,
Morningstar, Inc., Financial World, Business Week, U.S. News and World Report,
The Wall Street Journal, Barron's, and a variety of investment newsletters.

(7) VARIOUS BANK PRODUCTS
Each Fund's performance also may be compared on a before or after-tax
basis to various bank products, including the average rate of bank and thrift
institution money market deposit accounts, Super N.O.W. accounts and
certificates of deposit of various maturities as reported in the Bank Rate
Monitor, National Index of 100 leading banks, and thrift institutions as
published by the Bank Rate Monitor, Miami Beach, Florida. The rates published
by the Bank Rate Monitor National Index are averages of the personal account
rates offered on the Wednesday prior to the date of publication by 100 large
banks and thrifts in the top ten Consolidated Standard Metropolitan Statistical
Areas. The rates provided for the bank accounts assume no compounding and are
for the lowest minimum deposit required to open an account. Higher rates may
be available for larger deposits.

With respect to money market deposit accounts and Super N.O.W.
accounts, account minimums range upward from $2,000 in each institution and
compounding methods vary. Super N.O.W. accounts generally offer unlimited
check writing while money market deposit accounts generally restrict the number
of checks that may be written. If more than one rate is offered, the lowest
rate is used. Rates are determined by the financial institution and are
subject to change at any time specified by the institution. Generally, the
rates offered for these products take market conditions and competitive product
yields into consideration when set. Bank products represent a taxable
alternative income producing product. Bank and thrift institution deposit
accounts may be insured. Shareholder accounts in the Fund are not insured.
Bank passbook savings accounts compete with money market mutual fund products
with respect to certain liquidity features but may not offer all of the
features available from a money market mutual fund, such as check writing.
Bank passbook savings accounts normally offer a fixed rate of interest while
the yield of the Fund fluctuates. Bank checking accounts normally do not pay
interest but compete with money market mutual fund products with respect to
certain liquidity features (e.g., the ability to write checks against the
account). Bank certificates of deposit may offer fixed or variable rates for a
set term. (Normally, a variety of terms are available.) Withdrawal of these
deposits prior to maturity will normally be subject to a penalty. In contrast,
shares of each Fund are redeemable at the net asset value (normally, $1.00 per
share) next determined after a request is received, without charge.

(8) INDICES
The Funds may compare their performance to a wide variety of indices
including the following:

(a) The Consumer Price Index, generally considered to be a measure
of inflation.

(b) The CDA U.S. Treasury Bill Index, an unmanaged index based on
the average monthly yield of U.S. Treasury Bill maturing in 30
days.

- 35 -
<PAGE> 81

(d) The Salomon Brothers 1-3 Year Treasury/Government-Sponsored/
Corporate Bond Index

(e) IBC/Donoghue's Taxable Money Fund AverageTM

(f) IBC/Donoghue's Government Money Fund AverageTM

(g) Salomon Brothers 3-Month Treasury Bill Index

(h) Salomon Brothers 1-Year Treasury Benchmark-on-the-Run Index

(i) Salomon Brothers Broad Investment-Grade Bond Index

(j) Lehman Brothers Aggregate Bond Index

(k) Lehman Brothers Government/Corporate Index and the
Intermediate Bond Index

(l) Bank Rate Monitor National IndexTM, an unmanaged index based
on the average interest rates for certificates of deposit in
the ten largest metropolitan areas in the U.S.

There are differences and similarities between the investments which a
Fund may purchase and the investments measured by the indices which are noted
herein. The market prices and yields of taxable and tax-exempt bonds will
fluctuate. There are important differences among the various investments
included in the indices that should be considered in reviewing this
information.

(9) STRONG FAMILY OF FUNDS
The Strong Family of Funds offers a comprehensive range of
conservative to aggressive investment options. A Fund may from time to time be
compared to the other funds in the Strong Family of Funds based on a
risk/reward spectrum. The following graph illustrates the risk/return spectrum
for the Strong Family of Funds and each Fund's place on that spectrum.

THE U.S. TREASURY
MONEY FUND

LOWER RISK AND HIGHER RISK AND
RETURN POTENTIAL RETURN POTENTIAL
__
----------| |---------------------------------------------------------
|MONEY | | | INCOME | GROWTH FUNDS |
|MARKET | | | FUNDS | |
|FUNDS | | | | |
----------|__|---------------------------------------------------------

THE MONEY MARKET FUND

LOWER RISK AND HIGHER RISK AND
RETURN POTENTIAL RETURN POTENTIAL
__
--------------------| |-----------------------------------------------
| MONEY MARKET || | INCOME | GROWTH FUNDS |
| FUNDS || | FUNDS | |
--------------------|__|-----------------------------------------------

THE STRONG ADVANTAGE FUND

- 36 -
<PAGE> 82

LOWER RISK AND HIGHER RISK AND
RETURN POTENTIAL RETURN POTENTIAL
___
------------------| |----------------------------------------------
| MONEY MARKET | | | INCOME | GROWTH FUNDS |
| FUNDS | | | FUNDS | |
------------------|___|----------------------------------------------

THE STRONG SHORT-TERM BOND FUND

LOWER RISK AND HIGHER RISK AND
RETURN POTENTIAL RETURN POTENTIAL
___
----------------------------| |------------------------------------
| MONEY MARKET | | | INCOME | GROWTH FUNDS |
| FUNDS | | | FUNDS | |
----------------------------|___|------------------------------------

THE STRONG GOVERNMENT
SECURITIES FUND

LOWER RISK AND HIGHER RISK AND
RETURN POTENTIAL RETURN POTENTIAL
___
------------------------------------| |----------------------------
| MONEY MARKET | INCOME | | | GROWTH FUNDS |
| FUNDS | FUNDS | | | |
------------------------------------|___|----------------------------

THE STRONG CORPORATE BOND FUND

- 37 -
<PAGE> 83

The Funds are members of the Strong Family of Funds. All of the
members of the Strong Family and their investment objectives are listed below.

<TABLE>
<CAPTION>
FUND NAME INVESTMENT OBJECTIVE
- --------- --------------------
<S> <C>
Strong U.S. Treasury Money Fund Current income, a stable share price and daily liquidity.
Strong Money Market Fund Current income, a stable share price and daily liquidity.
Strong Advantage Fund Current income with a very low degree of share-price fluctuation.
Strong Short-Term Bond Fund Total return by investing for a high level of current income with a low degree of
share-price fluctuation.
Strong Short-Term Global Bond Total return by investing for a high level of income with a low degree of share-price
Fund fluctuation.
Strong Government Securities Total return by investing for a high level of current income with a moderate degree of
Fund share-price fluctuation.
Strong Corporate Bond Fund Total return by investing for a high level of current income with a moderate degree of
share-price fluctuation.
Strong International Bond Fund A high total return by investing for both income and capital appreciation.
Strong Asset Allocation Fund A high total return consistent with reasonable risk over the long term.
Strong Total Return Fund A high total return by investing for capital growth and income.
Strong American Utilities Fund Total return by investing for both income and capital growth.
Strong Opportunity Fund Capital growth.
Strong Growth Fund Capital growth.
Strong Common Stock Fund* Capital growth.
Strong Discovery Fund Capital growth.
Strong International Stock Fund Capital growth.
Strong Asia Pacific Fund Capital growth.
Strong Municipal Money Market Federally tax-exempt current income, a stable share-price and daily liquidity.
Fund
Strong Short-Intermediate Total return by investing for a high level of federally tax-exempt current income with
Municipal Bond Fund a low degree of share-price fluctuation.
Strong Insured Municipal Bond Total return by investing for a high level of federally tax-exempt current income with a
Fund moderate degree of share-price fluctuation.
Strong Municipal Bond Fund Total return by investing for a high level of federally tax-exempt current income with
a moderate degree of share-price fluctuation.
Strong High-Yield Municipal Bond Total return by investing for a high level of federally tax-exempt current income.
Fund
Strong Special Fund II** Capital growth.
Strong Discovery Fund II** Capital growth.

</TABLE>

* The Strong Common Stock Fund is currently closed to new investors.
** The Fund is an investment vehicle that funds variable annuity accounts.

Financial goals vary from person to person. You may choose one or
more of the Strong Funds to help you reach your financial goals. To help you
better understand the Strong Income Funds and determine which Fund or
combination of Funds best meets your personal investment objectives, they are
described in the same Prospectus. Though they appear in the same Prospectus,
each of the Income Funds is a separately incorporated investment company.
Because the Funds share a Prospectus, there may be the possibility of cross
liability between the Funds.

- 38 -
<PAGE> 84

GENERAL INFORMATION

SERVICE ORIENTATION

The Advisor is an independent, Midwestern-based investment advisor,
unaffiliated with any bank, securities brokerage, or insurance company. The
Advisor strives for excellence both in investment management and in the service
provided to investors. This commitment affects many aspects of the business,
including professional staffing, product development, investment management,
and service delivery. Through its commitment to excellence, the Advisor
intends to benefit investors and to encourage them to think of Strong Funds as
their mutual fund family.

INVESTMENT ENVIRONMENT

Discussions of economic, social, and political conditions and their
impact on the Funds may be used in advertisements and sales materials. Such
factors that may impact the Funds include, but are not limited to, changes in
interest rates, political developments, the competitive environment, consumer
behavior, industry trends, technological advances, macroeconomic trends, and
the supply and demand of various financial instruments. In addition, marketing
materials may cite the portfolio management's views or interpretations of such
factors.

PORTFOLIO MANAGEMENT

The Advisor believes that actively managing each Fund's portfolio and
adjusting the average portfolio maturity according to the Advisor's interest
rate outlook is the best way to achieve the Fund's objectives. This policy is
based on a fundamental belief that economic and financial conditions create
favorable and unfavorable investment periods (or seasons) and that these
different seasons require different investment approaches. Through its active
management approach, the Advisor seeks to avoid or reduce any negative change
in the Fund's net asset value per share during the periods of falling bond
prices and provide consistently positive annual returns throughout the seasons
of investment.

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P., 411 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, are the independent accountants for the Funds, providing audit
services and assistance and consultation with respect to the preparation of
filings with the Securities and Exchange Commission.

FINANCIAL STATEMENTS

The Annual Report that is attached hereto contains the following
financial information for each Fund:

(a) Schedules of Investments in Securities.
(b) Statements of Operations.
(c) Statements of Assets and Liabilities.
(d) Statements of Changes in Net Assets.
(e) Notes to Financial Statements.
(f) Financial Highlights.
(g) Report of Independent Accountants.

- 39 -
<PAGE> 85

APPENDIX

BOND RATINGS

STANDARD & POOR'S DEBT RATINGS

A Standard & Poor's corporate or municipal debt rating is a current
assessment of the creditworthiness of an obligor with respect to a specific
obligation. This assessment may take into consideration obligors such as
guarantors, insurers, or lessees.

The debt rating is not a recommendation to purchase, sell, or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.

The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable. S&P does not
perform an audit in connection with any rating and may, on occasion, rely on
unaudited financial information. The ratings may be changed, suspended, or
withdrawn as a result of changes in, or unavailability of, such information, or
for other circumstances.

The ratings are based, in varying degrees, on the following
considerations:

1. Likelihood of default -- capacity and willingness of the
obligor as to the timely payment of interest and repayment
of principal in accordance with the terms of the
obligation.

2. Nature of and provisions of the obligation.

3. Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization, or
other arrangement under the laws of bankruptcy and other
laws affecting creditors' rights.

INVESTMENT GRADE
AAA Debt rated 'AAA' has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.

AA Debt rated 'AA' has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in small degree.

A Debt rated 'A' has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.

BBB Debt rated 'BBB' is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

SPECULATIVE GRADE
Debt rated 'BB', 'B', 'CCC', 'CC' and 'C' is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. 'BB' indicates the least degree of speculation
and 'C' the highest. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.

BB Debt rated 'BB' has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The 'BB' rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied 'BBB-' rating.

B Debt rated 'B' has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest

A-1
<PAGE> 86

and repay principal. The 'B' rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating.

CCC Debt rated 'CCC' has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal. In
the event of adverse business, financial, or economic conditions, it is not
likely to have the capacity to pay interest and repay principal. The 'CCC'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'B' or 'B-' rating.

CC Debt rated 'CC' typically is applied to debt subordinated to senior
debt that is assigned an actual or implied 'CCC' rating.

C Debt rated 'C' typically is applied to debt subordinated to senior
debt which is assigned an actual or implied 'CCC-' debt rating. The 'C' rating
may be used to cover a situation where a bankruptcy petition has been filed,
but debt service payments are continued.

CI The rating 'CI' is reserved for income bonds on which no interest
is being paid.

D Debt rated 'D' is in payment default. The 'D' rating category is
used when interest payments or principal payments are not made on the date due
even if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grade period. The 'D' rating also will
be used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

MOODY'S LONG-TERM DEBT RATINGS

Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edged". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than in Aaa
securities.

A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment some time in the
future.

Baa - Bonds which are rated Baa are considered as medium-grade
obligations (i.e., they are neither highly protected nor poorly secured).
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such Bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.

Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes Bonds in this class.

B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

Caa - Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.

A-2
<PAGE> 87

Ca - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

FITCH INVESTORS SERVICE, INC. BOND RATINGS

Fitch investment grade bond ratings provide a guide to investors in
determining the credit risk associated with a particular security. The ratings
represent Fitch's assessment of the issuer's ability to meet the obligations of
a specific debt issue or class of debt in a timely manner.

The rating takes into consideration special features of the issue, its
relationship to other obligations of the issuer, the current and prospective
financial condition and operating performance of the issuer and any guarantor,
as well as the economic and political environment that might affect the
issuer's future financial strength and credit quality.

Fitch ratings do not reflect any credit enhancement that may be
provided by insurance policies or financial guaranties unless otherwise
indicated.

Bonds that have the same rating are of similar but not necessarily
identical credit quality since the rating categories do not fully reflect small
differences in the degrees of credit risk.

Fitch ratings are not recommendations to buy, sell, or hold any
security. Ratings do not comment on the adequacy of market price, the
suitability of any security for a particular investor, or the tax-exempt nature
or taxability of payments made in respect of any security.

Fitch ratings are based on information obtained from issuers, other
obligors, underwriters, their experts, and other sources Fitch believes to be
reliable. Fitch does not audit or verify the truth or accuracy of such
information. Ratings may be changed, suspended, or withdrawn as a result of
changes in, or the unavailability of, information or for other reasons.

<TABLE>
<S> <C>
AAA Bonds considered to be investment grade and of the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable
events.

AA Bonds considered to be investment grade and of very high credit quality. The obligor's ability to pay interest
and repay principal is very strong, although not quite as strong as bonds rated 'AAA'. Because bonds rated in
the 'AAA' and 'AA' categories are not significantly vulnerable to foreseeable future developments, short-term debt
of the issuers is generally rated 'F-1+'.

A Bonds considered to be investment grade and of high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.

BBB Bonds considered to be investment grade and of satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds, and therefore impair timely
payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for bonds
with higher ratings.
</TABLE>

Fitch speculative grade bond ratings provide a guide to investors in
determining the credit risk associated with a particular security. The ratings
('BB' to 'C') represent Fitch's assessment of the likelihood of timely payment
of principal and interest in accordance with the terms of obligation for bond
issues not in default. For defaulted bonds, the rating ('DDD' to 'D') is an
assessment of the ultimate recovery value through reorganization or
liquidation.

A-3
<PAGE> 88

Bonds that have the same rating are of similar but not necessarily
identical credit quality since the rating categories cannot fully reflect the
differences in the degrees of credit risk. Moreover, the character of the risk
factor varies from industry to industry and between corporate, health care and
municipal obligations.

<TABLE>
<S> <C>
BB Bonds are considered speculative. The obligor's ability to pay interest and repay principal may be affected over
time by adverse economic changes. However, business and financial alternatives can be identified which could
assist the obligor in satisfying its debt service requirements.

B Bonds are considered highly speculative. While bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic activity throughout the life of the
issue.

CCC Bonds have certain identifiable characteristics which, if not remedied, may lead to default. The ability to meet
obligations requires an advantageous business and economic environment.

CC Bonds are minimally protected. Default in payment of interest and/or principal seems probable over time.

C Bonds are in imminent default in payment of interest or principal.

DDD, and
DD, D Bonds are in default on interest and/or principal payments. Such bonds are extremely speculative and should be
valued on the basis of their ultimate recovery value in liquidation or reorganization of the obligor. 'DDD'
represents the highest potential for recovery of these bonds, and 'D' represents the lowest potential for recovery.

</TABLE>

DUFF & PHELPS, INC. LONG-TERM DEBT RATINGS

These ratings represent a summary opinion of the issuer's long-term
fundamental quality. Rating determination is based on qualitative and
quantitative factors which may vary according to the basic economic and
financial characteristics of each industry and each issuer. Important
considerations are vulnerability to economic cycles as well as risks related to
such factors as competition, government action, regulation, technological
obsolescence, demand shifts, cost structure, and management depth and
expertise. The projected viability of the obligor at the trough of the cycle
is a critical determination.

Each rating also takes into account the legal form of the security,
(e.g., first mortgage bonds, subordinated debt, preferred stock, etc.). The
extent of rating dispersion among the various classes of securities is
determined by several factors including relative weightings of the different
security classes in the capital structure, the overall credit strength of the
issuer, and the nature of covenant protection. Review of indenture
restrictions is important to the analysis of a company's operating and
financial constraints.

The Credit Rating Committee formally reviews all ratings once per
quarter (more frequently, if necessary). Ratings of 'BBB-' and higher fall
within the definition of investment grade securities, as defined by bank and
insurance supervisory authorities.

<TABLE>
<CAPTION>
RATING SCALE DEFINITION
<S> <C>

</TABLE>

A-4
<PAGE> 89

<TABLE>
<S> <C>
AAA Highest credit quality. The risk factors are negligible, being only slightly more
than for risk-free U.S. Treasury debt.
- -------------------------------------------------------------------------------------------------------------
AA+ High credit quality. Protection factors are strong. Risk is modest, but may
AA vary slightly from time to time because of economic conditions.
AA-
- -------------------------------------------------------------------------------------------------------------
A+ Protection factors are average but adequate. However, risk factors are more
A variable and greater in periods of economic stress.
A-
- -------------------------------------------------------------------------------------------------------------
BBB+ Below average protection factors but still considered sufficient for prudent
BBB investment. Considerable variability in risk during economic cycles.
BBB-
- -------------------------------------------------------------------------------------------------------------
BB+ Below investment grade but deemed likely to meet obligations when due.
BB Present or prospective financial protection factors fluctuate according to
BB- industry conditions or company fortunes. Overall quality may move up or
down frequently within this category.
- -------------------------------------------------------------------------------------------------------------
B+ Below investment grade and possessing risk that obligations will not be met
B when due. Financial protection factors will fluctuate widely according to
B- economic cycles, industry conditions and/or company fortunes. Potential
exists for frequent changes in the rating within this category or into a higher
or lower rating grade.
- -------------------------------------------------------------------------------------------------------------
CCC Well below investment grade securities. Considerable uncertainty exists as to
timely payment of principal, interest or preferred dividends.
Protection factors are narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable company developments.
- -------------------------------------------------------------------------------------------------------------
DD Defaulted debt obligations. Issuer failed to meet scheduled principal and/or
interest payments.
DP Preferred stock with dividend arrearages.
- -------------------------------------------------------------------------------------------------------------
</TABLE>

SHORT-TERM RATINGS

STANDARD & POOR'S COMMERCIAL PAPER RATINGS

A Standard & Poor's commercial paper rating is a current assessment of
the likelihood of timely payment of debt considered short-term in the relevant
market.

Ratings graded into several categories, ranging from 'A-1' for the
highest quality obligations to 'D' for the lowest. These categories are as
follows:

A-1 This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.

A-5
<PAGE> 90

A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated 'A-1'.

A-3 Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of changes
in circumstances than obligations carrying the higher designations.

B Issues rated 'B' are regarded as having only speculative capacity
for timely payment.

C This rating is assigned to short-term debt obligations with doubtful
capacity for payment.

D Debt rated 'D' is in payment default. The 'D' rating category is
used when interest payments or principal payments are not made on the date due,
even if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period.

STANDARD & POOR'S NOTE RATINGS

A S&P note rating reflects the liquidity factors and market-access
risks unique to notes. Notes maturing in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating.

The following criteria will be used in making the assessment:

Amortization schedule - the larger the final maturity relative
to other maturities, the more likely the issue is to be
treated as a note.

Source of payment - the more the issue depends on the market
for its refinancing, the more likely it is to be considered a
note.

The note rating symbols and definitions are as follows:

SP-1 Strong capacity to pay principal and interest. Issues determined
to possess very strong characteristics are given a plus (+) designation.

SP-2 Satisfactory capacity to pay interest and principal, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3 Speculative capacity to pay principal and interest.

MOODY'S COMMERCIAL PAPER RATINGS

The term "commercial paper" as used by Moody's means promissory
obligations not having an original maturity in excess of nine months. Moody's
makes no representation as to whether such commercial paper is by any other
definition "commercial paper" or is exempt from registration under the
Securities Act of 1933, as amended.
Moody's commercial paper ratings are opinions of the ability of
issuers to repay punctually promissory obligations not having an original
maturity in excess of nine months. Moody's makes no representation that such
obligations are exempt from registration under the Securities Act of 1933, nor
does it represent that any specific note is a valid obligation of a rated
issuer or issued in conformity with any applicable law. Moody's employs the
following three designations, all judged to be investment grade, to indicate
the relative repayment capacity of rated issuers:

Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
(i) leading

A-6
<PAGE> 91

market positions in well established industries, (ii) high rates of return on
funds employed, (iii) conservative capitalization structures with moderate
reliance on debt and ample asset protection, (iv) broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and (v)
well established access to a range of financial markets and assured sources of
alternate liquidity.

Issuers rated PRIME-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.

Issuers rated PRIME-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.

Issuers rated NOT PRIME do not fall within any of the Prime rating
categories.

MOODY'S NOTE RATINGS

MIG 1/VMIG 1 This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support or
demonstrated broad based access to the market for refinancing.

MIG 2/VMIG 2 This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.

MIG 3/VMIG 3 This designation denotes favorable quality. All
security elements are accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well established.

MIG 4/VMIG 4 This designation denotes adequate quality. Protection
commonly regarded as required of an investment security is present and although
not distinctly or predominantly speculative, there is specific risk.

SG This designation denotes speculative quality. Debt instruments in
this category lack margins of protection.

FITCH INVESTORS SERVICE, INC. SHORT-TERM RATINGS

Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal and
investment notes.

The short-term rating places greater emphasis than a long-term rating
on the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

<TABLE>
<S> <C>
F-1+ (Exceptionally Strong Credit Quality) Issues assigned this rating are regarded as having the strongest degree of
assurance for timely payment.

F-1 (Very Strong Credit Quality) Issues assigned this rating reflect an assurance of timely payment only slightly less
in degree than issues rated 'F-1+'.

F-2 (Good Credit Quality) Issues assigned this rating have a satisfactory degree of assurance for timely payment but
the margin of safety is not as great as for issues assigned 'F-1+' and 'F-1' ratings.
</TABLE>

A-7
<PAGE> 92

<TABLE>
<S> <C>
F-3 (Fair Credit Quality) Issues assigned this rating have characteristics suggesting that the degree of assurance for
timely payment is adequate, however, near-term adverse changes could cause these securities to be rated below
investment grade.

F-S (Weak Credit Quality) Issues assigned this rating have characteristics suggesting a minimal degree of assurance
for timely payment and are vulnerable to near-term adverse changes in financial and economic conditions.

D (Default) Issues assigned this rating are in actual or imminent payment default.

LOC The symbol LOC indicates that the rating is based on a letter of credit issued by a commercial bank.
</TABLE>

DUFF & PHELPS, INC. SHORT-TERM DEBT RATINGS

Duff & Phelps' short-term ratings are consistent with the rating
criteria utilized by money market participants. The ratings apply to all
obligations with maturities of under one year, including commercial paper, the
uninsured portion of certificates of deposit, unsecured bank loans, master
notes, bankers acceptances, irrevocable letters of credit, and current
maturities of long-term debt. Asset-backed commercial paper is also rated
according to this scale.

Emphasis is placed on liquidity which as defined as not only cash from
operations, but also access to alternative sources of funds including trade
credit, bank lines, and the capital markets. An important consideration is the
level of an obligor's reliance on short-term funds on an ongoing basis.

A-8
<PAGE> 93

<TABLE>
<CAPTION>
Rating Scale: Definition
------------ ----------

<S> <C>
Duff 1+ Highest certainty of timely payment. Short-term liquidity, including internal operating factors and/or
access to alternative sources of funds, is outstanding, and safety is just below risk-free U.S. Treasury
short-term obligations.

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

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

Good Grade
----------

Duff 2 Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although
ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk
factors are small.

Satisfactory Grade
------------------

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

Non-investment Grade
--------------------

Duff 4 Speculative investment characteristics. Liquidity is not sufficient to insure against disruption in debt
service. Operating factors and market access may be subject to a high degree of variation.

Default
-------

Duff 5 Issuer failed to meet scheduled principal and/or interest payments.
</TABLE>

A-9

<PAGE> 5

STRONG GOVERNMENT SECURITIES FUND, INC.

PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

Inapplicable

(b) Exhibits

(1) Articles of Incorporation

(2) Restated By-Laws

(3) Inapplicable

(4) Specimen Stock Certificate

(5) Investment Advisory Agreement

(6) Distribution Agreement

(7) Inapplicable

(8) Custody Agreement

(8.1) Amendment to the Custody Agreement

(9) Shareholder Servicing Agent Agreement

(10) Inapplicable

(11) Inapplicable

(12) Inapplicable

(13) Inapplicable

(14.1) Amended Prototype Defined Contribution Retirement
Plan with Standardized Adoption Agreements

(14.2) Amended Individual Retirement Custodial Account

(14.3) Amended Section 403(b)(7) Retirement Plan

(15) Inapplicable

(16) Computation of Performance Figures

(17) Power of Attorney

C-1
<PAGE> 6

Item 25. Persons Controlled by or under Common Control with Registrant

Registrant neither controls any person nor is under common control with
any other person.

Item 26. Number of Holders of Securities

<TABLE>
<CAPTION>
Number of Record Holders
Title of Class as of January 31, 1995
-------------- ----------------------------
<S> <C>
Common Stock, $.001 par value 10,473
</TABLE>

Item 27. Indemnification

Officers and directors are insured under a joint errors and omissions
insurance policy underwritten by American International Surplus Lines Insurance
Company and First State Insurance Company in the aggregate amount of
$10,000,000, subject to certain deductions. Pursuant to the authority of the
Wisconsin Business Corporation Law, Article VII of Registrant's By-Laws
provides as follows:

ARTICLE VII. INDEMNIFICATION OF OFFICERS AND DIRECTORS

7.01. Mandatory Indemnification. The corporation shall
indemnify, to the full extent permitted by the Wisconsin Business
Corporation Law, as in effect from time to time, the persons described in
Sections 180.0850 through 180.0859 (or any successor provisions) of the
Wisconsin Business Corporation Law or other provisions of the law of the
State of Wisconsin relating to indemnification of directors and officers,
as in effect from time to time. The indemnification afforded such persons
by this section shall not be exclusive of other rights to which they may
be entitled as a matter of law.

7.02. Permissive Supplementary Benefits. The corporation may,
but shall not be required to, supplement the right of indemnification
under Section 7.01 by (a) the purchase of insurance on behalf of any one
or more of such persons, whether or not the corporation would be obligated
to indemnify such person under Section 7.01; (b) individual or group
indemnification agreements with any one or more of such persons; and (c)
advances for related expenses of such a person.

7.03. Amendment. This Article VII may be amended or repealed
only by a vote of the shareholders and not by a vote of the Board of
Directors.

7.04. Investment Company Act. In no event shall the corporation
indemnify any person hereunder in contravention of any provision of the
Investment Company Act of 1940.

Item 28. Business and Other Connections of Investment Advisor

The information contained under "About the Funds - Management" in the
Prospectus and under "Directors and Officers of the Fund" and "Investment
Advisor and Distributor" in the Statement of Additional Information is hereby
incorporated by reference pursuant to Rule 411 under the Securities Act of
1933.

Item 29. Principal Underwriters

(a) Strong Funds Distributors, Inc., principal underwriter for Registrant,
also serves as principal underwriter for Strong Advantage Fund, Inc.; Strong
American Utilities Fund, Inc.; Strong Asia Pacific Fund, Inc.; Strong Asset
Allocation Fund, Inc.; Strong Common Stock Fund, Inc.; Strong Discovery Fund
II, Inc.; Strong Discovery Fund, Inc.; Strong Growth Fund, Inc.; Strong
High-Yield Municipal Bond Fund, Inc.; Strong Income Fund, Inc.; Strong Insured
Municipal Bond Fund, Inc.; Strong International Bond Fund, Inc.; Strong
International Stock Fund, Inc.; Strong Money Market Fund, Inc.; Strong
Municipal Bond Fund, Inc.; Strong Municipal Money Market Fund, Inc.; Strong
Opportunity Fund, Inc.; Strong Short-Term Bond Fund, Inc.; Strong Short-Term
Global Bond Fund, Inc.; Strong Short-Term Municipal Bond Fund, Inc.; Strong
Special Fund II, Inc.; Strong Total Return Fund, Inc.; and Strong U.S. Treasury
Money Fund, Inc.

C-2
<PAGE> 7

(b) The information contained under "About the Funds - Management" in the
Prospectus and under "Directors and Officers of the Fund" and "Investment
Advisor and Distributor" in the Statement of Additional Information is hereby
incorporated by reference pursuant to Rule 411 under the Securities Act of
1933.

Item 30. Location of Accounts and Records

All accounts, books, or other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are in the physical possession of Registrant's Treasurer, Thomas M.
Zoeller, at Registrant's corporate offices, 100 Heritage Reserve, Menomonee
Falls, Wisconsin 53051.

Item 31. Management Services

All management-related service contracts entered into by Registrant are
discussed in Parts A and B of this Registration Statement.

Item 32. Undertakings

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

C-3
<PAGE> 8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 9 to the Registration Statement on Form N-1A to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
Village of Menomonee Falls, and State of Wisconsin on the 23rd day of February,
1995.

STRONG GOVERNMENT SECURITIES FUND, INC.
(Registrant)

BY: /s/ John Dragisic
--------------------------------------
John Dragisic, Vice Chairman

Each person whose signature appears below constitutes and appoints John
Dragisic, Thomas P. Lemke, Lawrence A. Totsky, and Ann E. Oglanian, and each
of them, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all post-effective amendments to this
Registration Statement on Form N-1A and to file the same, with all exhibits
thereto, and any other documents in connection therewith, with the Securities
and Exchange Commission and any other regulatory body on or before May 30,
1996, granting unto said attorney-in-fact and agent, full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as fully to all intents and purposes, as he might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent, or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 9 to the Registration Statement on Form N-1A has
been signed below by the following persons in the capacities and on the date
indicated.

<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
Vice Chairman of the Board (Principal
/s/ John Dragisic Executive Officer) February 23, 1995
- ----------------------------------------
John Dragisic

Treasurer (Principal Financial and
/s/ Thomas M. Zoeller Accounting Officer) February 23, 1995
- ----------------------------------------
Thomas M. Zoeller

/s/ Richard S. Strong Chairman of the Board and a Director February 23, 1995
- ----------------------------------------
Richard S. Strong

/s/ Marvin E. Nevins Director February 23, 1995
- ----------------------------------------
Marvin E. Nevins

/s/ Willie D. Davis Director February 23, 1995
- ----------------------------------------
Willie D. Davis
</TABLE>

<PAGE> 9

EXHIBIT INDEX

<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit No. Exhibit Page No.
- ----------- ------- -----------
<S> <C> <C>
(1) Articles of Incorporation(1)

(2) Restated By-Laws(4)

(3) Inapplicable

(4) Specimen Stock Certificate(2)

(5) Investment Advisory Agreement(2)

(6) Distribution Agreement(2)

(7) Inapplicable

(8) Custody Agreement(2)

(8.1) Amendment to Custody Agreement(3)

(9) Shareholder Servicing Agent Agreement(3)

(10) Inapplicable

(11) Inapplicable

(12) Inapplicable

(13) Inapplicable

(14.1) Amended Prototype Defined Contribution Retirement Plan with Standardized
Adoption Agreements(5)

(14.2) Amended Individual Retirement Custodial Account(5)

(14.3) Amended Section 403(b)(7) Retirement Plan(5)

(15) Inapplicable

(16) Computation of Performance Figures

(17) Power of Attorney (See Signature Page)
</TABLE>
_________________________
(1) Incorporated herein by reference to the Registration Statement on Form
N-1A of Registrant.

(2) Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of Registrant.
<PAGE> 10

(3) Incorporated herein by reference to Amendment No. 3 to the Registration
Statement on Form N-1A of Registrant. The Shareholder Servicing Agent
Agreement is incorporated by reference to Exhibit 9.1 to Amendment No. 3.

(4) Incorporated herein by reference to Amendment No. 5 to the Registration
Statement of Form N-1A of Registrant.

(5) Incorporated herein by reference to Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A of Registrant filed on or about April
28, 1994.

<PAGE> 1

EXHIBIT 16

Strong Government Securities Fund, Inc.

SCHEDULE OF COMPUTATION OF
PERFORMANCE QUOTATIONS

I. CURRENT ANNUALIZED YIELD: 30 days ended December 30, 1994

A. Formula

a-b
YIELD = 2[(---------- + 1)6 - 1]
cd

Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of shares outstanding
during the period.
d = the maximum offering price per share on the last
day of the period.

B. Calculation

1,839,853.72 - 200,165.22
YIELD = 2[(------------------------------ + 1)6 - 1]
27,997,518.902 x 9.63

YIELD = 7.41%

II. AVERAGE ANNUAL TOTAL RETURN

A. Formula _____
P (1 + T)n = ERV or T = \n/ERV/P - 1

Where: P = a hypothetical initial payment of $10,000

T = average annual total return

n = number of years

ERV = ending redeemable value of a hypothetical $10,000
payment made at the beginning of the stated periods
at the end of the stated periods.

<PAGE> 2

B. Calculation
_____
T = \n/ERV/P - 1

1. One-year period 12-31-93 through 12-31-94
_____________
-3.39% = \1/9,661/10,000 - 1

2. Five-year period 12-31-89 through 12-31-94
_____________
8.57% = \5/15,086/10,000 - 1

3. Since inception 10-29-86 through 12-31-94
_______
8.42% = \8.173/19,364/10,000 - 1

III. TOTAL RETURN

A. Formula

EV-IV
------
IV = TR

Where: EV = Value at the end of the periods, including
reinvestment of all dividends and capital gains
distributions

IV = Initial value of a hypothetical investment at the net
asset value

TR = Total Return

B. Calculation

EV-IV
------
IV = TR

One-year period ended December 31, 1994

9,661 - 10,000
--------------
10,000 = -3.39%