MONEY MARKET OBLIGATIONS TRUST /NEW/, 485BPOS, 1999-10-29

MONEY MARKET OBLIGATIONS TRUST /NEW/
485BPOS, 1999-10-29

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1933 Act File No. 33-31602
1940 Act File No. 811-5950

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
-----

Pre-Effective Amendment No. ...............................

Post-Effective Amendment No. 36 ............................... X
-------- -----

and/or

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

Amendment No. 37 ............................................. X
-------- -----

MONEY MARKET OBLIGATIONS TRUST
(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
X on October 31, 1999 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(i) on _________________
pursuant to paragraph (a)(i) 75 days after filing pursuant to paragraph
(a)(ii) on _________________ pursuant to paragraph (a)(ii) 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.

Copies to: Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, DC 20037

PROSPECTUS
Money Market Obligations Trust

Government Obligations Fund

Government Obligations Tax-Managed Fund

Municipal Obligations Fund

Prime Obligations Fund

Prime Cash Obligations Fund

Prime Value Obligations Fund

Tax-Free Obligations Fund

Treasury Obligations Fund

INSTITUTIONAL SHARES

As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.

OCTOBER 31, 1999

CONTENTS

Risk/Return Summary 1

What are Each Fund's Fees and Expenses? 11

What are Each Fund's Investment Strategies? 14

What are the Principal Securities in Which the

Funds Invest? 15

What are the Specific Risks of Investing in the Funds? 18

What Do Shares Cost? 19

How are the Funds Sold? 19

How to Purchase Shares 19

How to Redeem Shares 21

Account and Share Information 23

Who Manages the Funds? 24

Financial Information 25

Risk/Return Summary

WHAT IS EACH FUND'S INVESTMENT OBJECTIVE?

Each Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per Share.

<TABLE>
<CAPTION>
FUND Objective
<S> <C>
Government Obligations Fund
(Government Fund) To provide current income consistent with
stability of principal.
Government Obligations
Tax-Managed Fund
(Government
Tax-Managed Fund) To provide current income consistent with
stability of principal and liquidity.
Municipal Obligations Fund
(Municipal Fund) To provide current income exempt from all
federal regular income tax consistent with
stability of principal.
Prime Obligations Fund
(Prime Fund) To provide current income consistent with
stability of principal.
Prime Cash Obligations Fund
(Prime Cash Fund) To provide current income consistent
with stability of principal and liquidity.
Prime Value Obligations Fund
(Prime Value Fund) To provide current income consistent
with stability of principal and liquidity.
Tax-Free Obligations Fund
(Tax-Free Fund) To provide dividend income exempt from
federal regular income tax consistent with
stability of principal.
Treasury Obligations Fund
(Treasury Fund) To provide current income consistent with
stability of principal.
</TABLE>

While there is no assurance that a Fund will achieve its investment objective,
it endeavors to do so by following the strategies and policies described in this
prospectus.

The investment objective of the Municipal Fund, the Prime Cash Fund and the
Prime Value Fund may be changed by the Funds' Trustees without shareholder
approval.

WHAT ARE EACH FUND'S MAIN INVESTMENT STRATEGIES?

Each of the Funds invests in a portfolio of securities maturing in 397 days or
less. The portfolio of each Fund will have a dollar-weighted maturity of 90 days
or less.

GOVERNMENT FUND

The Government Fund invests primarily in U.S. Treasury and agency
securities, including repurchase agreements collateralized fully by
U.S. Treasury and agency securities.

GOVERNMENT TAX-MANAGED FUND

The Government Tax-Managed Fund invests primarily in U.S. Treasury and agency
securities that pay interest exempt from state personal income tax.

MUNICIPAL FUND

The Municipal Fund invests primarily in high quality tax exempt securities.
Under normal market conditions, the Municipal Fund will invest at least 80% of
its total assets in tax exempt securities. At least 80% of the Municipal Fund's
annual interest income will be exempt from federal regular income tax. Interest
from the Municipal Fund's investments may be subject to the federal alternative
minimum tax for individuals and corporations (AMT).

PRIME FUND

The Prime Fund invests primarily in high quality fixed income securities issued
by banks, corporations and the U.S. government.

PRIME CASH FUND

The Prime Cash Fund invests primarily in high quality fixed income securities
issued by banks, corporations and the U.S. government.

PRIME VALUE FUND

The Prime Value Fund invests primarily in high quality fixed income securities
issued by banks, corporations and the U.S. government.

TAX-FREE FUND

The Tax-Free Fund invests primarily in high quality tax exempt securities. At
least 80% of the Tax-Free Fund's annual interest income will be exempt from
federal regular income tax. Interest from the Tax-Free Fund's investments may be
subject to AMT.

TREASURY FUND

The Treasury Fund invests primarily in U.S. Treasury securities, including
repurchase agreements collateralized fully by U.S. Treasury securities.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUNDS?

All mutual funds take investment risks. Therefore, even though the Funds are
money market funds that seek to maintain a stable net asset value, it is
possible to lose money by investing in a Fund. The Shares offered by this
prospectus are not deposits or obligations of any bank, are not endorsed or
guaranteed by any bank and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Shares
total returns on a calendar year-end basis.

The Fund's Institutional Shares are not sold subject to a sales charge (load).
The total returns displayed above are based upon net asset value.

The Fund's Institutional Shares total return for the nine-month period from
January 1, 1999 to September 30, 1999 was 3.67%.

Within the periods shown in the Chart, the Fund's Institutional Shares highest
quarterly return was 1.68% (quarter ended March 31, 1991). Its lowest quarterly
return was 0.76% (quarter ended June 30, 1993).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Shares Average Annual
Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.45%
5 Years 5.29%
Start of Performance 1 5.21%

1 The Fund's Institutional Shares start of performance date was March 30, 1990.

The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1998 was
4.91%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
returns.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Shares
total returns on a calendar year-end basis.

The Fund's Institutional Shares are not sold subject to a sales charge (load).
The total returns displayed above are based upon net asset value.

The Fund's Institutional Shares total return for the nine-month period from
January 1, 1999 to September 30, 1999 was 3.65%.

Within the periods shown in the Chart, the Fund's Institutional Shares highest
quarterly return was 1.36% (quarter ended December 31, 1997). Its lowest
quarterly return was 1.26% (quarter ended December 31, 1998).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Shares Average Annual
Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.37%
Start of Performance 1 5.44%

1 The Fund's Institutional Shares start of performance date was June 2, 1995.

The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1998 was
4.94%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Shares of Municipal Obligations Fund (the "Former Fund") prior
to its reorganization into the Municipal Obligations Fund, which is a newly
created portfolio of Money Market Obligations Trust. On the date of the
reorganization, November 1, 1999, the Former Fund will be dissolved and its net
assets (inclusive of liabilities recorded on the Former Fund's records) will be
transferred to the Municipal Obligations Fund.

[Graphic]

Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's
Institutional Shares total returns on a calendar year-end basis.

The Former Fund's Institutional Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Shares total return for the nine-month period
from January 1, 1999 to September 30, 1999 was 2.44%.

Within the periods shown in the Chart, the Former Fund's Institutional Shares
highest quarterly return was 1.04% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.60% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Former Fund's Institutional Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 3.56%
5 Years 3.55%
Start of Performance 1 3.39%

1 The Former Fund's Institutional Shares start of performance date was February
8, 1993.

The Former Fund's Institutional Shares 7-Day Net Yield as of December 31, 1998
was 3.77%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Shares
total returns on a calendar year-end basis.

The Fund's Institutional Shares are not sold subject to a sales charge (load).
The total returns displayed above are based upon net asset value.

The Fund's Institutional Shares total return for the nine-month period from
January 1, 1999 to September 30, 1999 was 3.73%.

Within the periods shown in the Chart, the Fund's Institutional Shares highest
quarterly return was 1.74% (quarter ended March 31, 1991). Its lowest quarterly
return was 0.77% (quarter ended June 30, 1993).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Shares Average Annual
Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.52%
5 Years 5.34%
Start of Performance 1 5.27%

1 The Fund's Institutional Shares start of performance date was March 26, 1990.

The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1998 was
5.07%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Shares of Prime Cash Obligations Fund (the "Former Fund")
prior to its reorganization into the Prime Cash Obligations Fund, which is a
newly created portfolio of Money Market Obligations Trust. On the date of the
reorganization, November 1, 1999, the Former Fund will be dissolved and its net
assets (inclusive of liabilities recorded on the Former Fund's records) will be
transferred to the Prime Cash Obligations Fund.

[Graphic]

The Former Fund's Institutional Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Shares total return for the nine-month period
from January 1, 1999 to September 30, 1999 was 3.74%.

Within the periods shown in the Chart, the Former Fund's Institutional Shares
highest quarterly return was 1.53% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.81% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Former Fund's Institutional Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.56%
5 Years 5.38%
Start of Performance 1 5.05%

1 The Former Fund's Institutional Shares start of performance date was February
8, 1993.

The Former Fund's Institutional Shares 7-Day Net Yield as of December 31, 1998
was 5.10%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Shares of Prime Value Obligations Fund (the "Former Fund")
prior to its reorganization into the Prime Value Obligations Fund, which is a
newly created portfolio of Money Market Obligations Trust. On the date of the
reorganization, November 1, 1999, the Former Fund will be dissolved and its net
assets (inclusive of liabilities recorded on the Former Fund's records) will be
transferred to the Prime Value Obligations Fund.

[Graphic]

The Former Fund's Institutional Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Shares total return for the nine-month period
from January 1, 1999 to September 30, 1999 was 3.76%.

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Former Fund's Institutional Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.58%
5 Years 5.41%
Start of Performance 1 5.08%

1 The Former Fund's Institutional Shares start of performance date was February
8, 1993.

The Former Fund's Institutional Shares 7-Day Net Yield as of December 31, 1998
was 5.15%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Shares
total returns on a calendar year-end basis.

The Fund's Institutional Shares are not sold subject to a sales charge (load).
The total returns displayed above are based upon net asset value.

The Fund's Institutional Shares total return for the nine-month period from
January 1, 1999 to September 30, 1999 was 2.28%.

Within the periods shown in the Chart, the Fund's Institutional Shares highest
quarterly return was 1.48% (quarter ended December 31, 1990). Its lowest
quarterly return was 0.55% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Shares Average Annual
Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD Fund
1 Year 3.38%
5 Years 3.40%
Start of Performance 1 3.66%

1 The Fund's Institutional Shares start of performance date was December 12,
1989.

The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1998 was
3.58%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Shares
total returns on a calendar year-end basis.

The Fund's Institutional Shares are not sold subject to a sales charge (load).
The total returns displayed above are based upon net asset value.

The Fund's Institutional Shares total return for the nine-month period from
January 1, 1999 to September 30, 1999 was 3.57%.

Within the periods shown in the Chart, the Fund's Institutional Shares highest
quarterly return was 2.02% (quarter ended September 30, 1990). Its lowest
quarterly return was 0.75% (quarter ended June 30, 1993).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Shares Average Annual
Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.37%
5 Years 5.23%
Start of Performance 1 5.23%

1 The Fund's Institutional Shares start of performance date was December 12,
1989.

The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1998 was
4.75%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

What are Each Fund's Fees and Expenses?

MONEY MARKET OBLIGATIONS TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Shares of the Government Obligations Fund and the Government
Obligations Tax-Managed Fund.

<TABLE>
<CAPTION>
Government
Government Obligations
Obligations Tax-Managed
SHAREHOLDER FEES Fund Fund
<S> <C> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of offering price) None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds, as
applicable) None None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions)
(as a percentage of
offering price). None None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None None
Exchange Fee None None

1 Although not contractually obligated to do so, the adviser and shareholder
services provider waived certain amounts. These are shown below along with the
net expenses the Funds actually paid for the fiscal year ended July 31, 1999.

Total Waiver of Fund
Expenses 0.34% 0.35%
Total Actual Annual
Fund
Operating Expenses
(after
waivers) 0.20% 0.20%

2 The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fee paid by
Government Obligations Fund and Government Obligations Tax-Managed Fund (after
the voluntary waiver) was 0.11% and 0.10%, respectively, for the fiscal year
ended July 31, 1999.

3 The shareholder services provider voluntarily waived the shareholder services
fee. The shareholder services provider can terminate this voluntary waiver at
any time. The shareholder services fee paid by the Funds' Institutional Shares
(after the voluntary waiver) was 0.00% for the fiscal year ended July 31, 1999.
</TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Funds'
Institutional Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Funds' Institutional Shares
for the time periods indicated and then redeem all of your Shares at the end of
those periods. The Example also assumes that your investment has a 5% return
each year and that the Funds' Institutional Shares operating expenses are BEFORE
WAIVERS as shown in the table and remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs would be:

FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Government Obligations Fund $55 $173 $302 $677
Government Obligations Tax-Managed Fund $56 $176 $307 $689

MONEY MARKET OBLIGATIONS TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Shares of the Prime Obligations Fund, Tax-Free Obligations Fund
and Treasury Obligations Fund and the Government Obligations Tax-Managed Fund.

<TABLE>
<CAPTION>
PRIME TAX-FREE TREASURY
OBLIGATIONS OBLIGATIONS OBLIGATIONS
SHAREHOLDER FEES FUND FUND FUND
<S> <C> <C> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases
(as a percentage of
offering price) None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds, as
applicable) None None None
Maximum Sales
Charge
(Load) Imposed
on
Reinvested Dividends
(and
other Distributions) (as
a
percentage of
offering
price). None None None
Redemption Fee (as
a
percentage of
amount
redeemed, if applicable) None None None
Exchange Fee None None None

Total Waiver of
Fund
Expenses 0.35% 0.35% 0.34%

Total Actual Annual Fund
Operating Expenses (after
waivers) 0.20% 0.20% 0.20%

2 The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fee paid by
Prime Obligations Fund, Tax-Free Obligations Fund and Treasury Obligations Fund
(after the voluntary waiver) was 0.10%, 0.10% and 0.11%, respectively, for the
fiscal year ended July 31, 1999.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Funds'
Institutional Shares with the cost of investing in other mutual funds.

FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Prime Obligations Fund $56 $176 $307 $689
Tax-Free Obligations Fund $56 $176 $307 $689
Treasury Obligations Fund $55 $173 $302 $677

MONEY MARKET OBLIGATIONS TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Shares of the Municipal Obligations Fund, Prime Cash Obligations
Fund and Prime Value Obligations Fund.

<TABLE>
<CAPTION>
MUNICIPAL PRIME CASH PRIME VALUE
OBLIGATIONS OBLIGATIONS OBLIGATIONS
SHAREHOLDER FEES FUND FUND FUND
<S> <C> <C> <C>
Fees Paid Directly
From
Your
Investment
Maximum Sales
Charge
(Load) Imposed
on
Purchases (as a
percentage
of offering price) None None None
Maximum Deferred
Sales
Charge (Load) (as
a
percentage of
original
purchase price
or
redemption proceeds,
as
applicable) None None None
Maximum Sales
Charge
(Load) Imposed
on
Reinvested Dividends
(and
other Distributions) (as
a
percentage of
offering
price). None None None
Redemption Fee (as
a
percentage of
amount
redeemed, if applicable) None None None
Exchange Fee None None None

1 Although not contractually obligated to do so, the adviser and shareholder
services provider expect to waive certain amounts. These are shown below along
with the net expenses the Funds expect to pay for the fiscal year ending July
31,2000.

Total Waiver of
Fund
Expenses 0.43% 0.38% 0.40%
Total Actual Annual
Fund
Operating Expenses
(after
waivers) 0.18% 0.18% 0.16%

2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by Municipal Obligations Fund, Prime Cash Obligations Fund
and Prime Value Obligations Fund (after the anticipated voluntary waiver) is
expected to be 0.02%, 0.07% and 0.05%, respectively, for the fiscal year ending
July 31, 2000.

3 The shareholder services provider has no present intention of paying or
accruing the shareholder services fee during the fiscal year ending July 31,
2000. 4 For the fiscal year ended July 31, 1999, prior to the reorganization of
Municipal Obligations Fund, Prime Cash Obligations Fund and Prime Value
Obligations Fund, the Former Funds, as portfolios of Money Market Obligations
Trust, had Total Annual Fund Operating Expenses and Total Actual Annual Fund
Operating Expenses (after waivers) of 0.61% and 0.18%, 0.56% and 0.18% and 0.56%
and 0.16%, respectively. </TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Funds'
Institutional Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Funds' Institutional Shares
for the time periods indicated and then redeem all of your Shares at the end of
those periods. The Example also assumes that your investment has a 5% return
each year and that the Funds' Institutional Shares operating expenses are BEFORE
WAIVERS as estimated in the table and remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:

FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Municipal Obligations Fund $62 $195 $340 $762
Prime Cash Obligations Fund $57 $179 $313 $701
Prime Value Obligations Fund $57 $179 $313 $701

What are Each Fund's Investment Strategies?

Each Fund's investment strategy is described earlier under "What are Each Fund's
Main Investment Strategies?" Following is additional information on the
investment strategies for the Funds.

The Adviser for each of the Funds targets a dollar-weighted average portfolio
maturity range based upon its interest rate outlook. The Adviser formulates its
interest rate outlook by analyzing a variety of factors, such as:

* current U.S. economic activity and the economic outlook;

* current short-term interest rates;

* the Federal Reserve Board's policies regarding short-term interest
rates; and

* the potential effects of foreign economic activity on U.S. short-term
interest rates.

The Adviser generally shortens the portfolio's dollar-weighted average maturity
when it expects interest rates to rise and extends the maturity when it expects
interest rates to fall. The Adviser selects securities used to shorten or extend
the portfolio's dollar-weighted average maturity by comparing the returns
currently offered by different investments to their historical and expected
returns.

MUNICIPAL FUND, PRIME FUND, PRIME CASH FUND, PRIME VALUE FUND AND TAX-FREE
FUND

The Adviser performs a fundamental credit analysis to develop an approved list
of issuers and securities that meet the Adviser's standard for minimal credit
risk. The Adviser monitors the credit risks of all portfolio securities on an
ongoing basis by reviewing periodic financial data and ratings of nationally
recognized statistical rating organizations (NRSROs).

MUNICIPAL FUND AND TAX-FREE FUND

In targeting a dollar-weighted average portfolio maturity range, the Adviser
also will consider the tax exempt securities available. In addition, the Adviser
may invest in securities subject to AMT in an attempt to enhance yield and
provide diversification.

INDUSTRY CONCENTRATION

The Prime Fund may invest 25% or more of its assets in commercial paper issued
by finance companies. The Prime Value Fund may invest 25% or more of its assets
in obligations of issuers in the banking industry or in obligations, such as
repurchase agreements, secured by such obligations.

TEMPORARY DEFENSIVE INVESTMENTS

The Municipal Fund and the Tax-Free Fund may temporarily depart from their
principal investment strategies by investing their assets in securities subject
to federal income tax. They may do this to minimize potential losses and
maintain liquidity to meet shareholder redemptions during adverse market
conditions. This may cause the Funds to receive and distribute taxable income to
investors.

What are the Principal Securities in Which the Funds Invest?

GOVERNMENT FUND

The Government Fund invests primarily in fixed income securities, including U.S.
Treasury securities, agency securities and repurchase agreements.

GOVERNMENT TAX-MANAGED FUND

The Government Tax-Managed Fund invests primarily in fixed income securities,
including U.S. Treasury securities and agency securities.

MUNICIPAL FUND

The Municipal Fund invests primarily in tax exempt securities, a type of fixed
income security, including variable rate demand instruments and municipal notes.
Certain of these tax exempt securities may be subject to credit enhancement.

PRIME FUND

The Prime Fund invests primarily in fixed income securities, including corporate
debt securities, commercial paper, demand instruments, bank instruments, asset
backed securities and repurchase agreements. Certain of these fixed income
securities may be subject to credit enhancement.

PRIME CASH FUND

The Prime Cash Fund invests primarily in fixed income securities, including
corporate debt securities, commercial paper, demand instruments, bank
instruments, asset backed securities and repurchase agreements. Certain of these
fixed income securities may be subject to credit enhancement.

PRIME VALUE FUND

The Prime Value Fund invests primarily in fixed income securities, including
corporate debt securities, commercial paper, demand instruments, bank
instruments, asset backed securities and repurchase agreements. Certain of these
fixed income securities may be subject to credit enhancement.

TAX-FREE FUND

The Tax-Free Fund invests primarily in tax exempt securities, a type of fixed
income security, including variable rate demand instruments and municipal notes.
Certain of these tax exempt securities may be subject to credit enhancement.

TREASURY FUND

The Treasury Fund invests primarily in fixed income securities, including U.S.
Treasury securities and repurchase agreements.

FIXED INCOME SECURITIES

Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time.

U.S. TREASURY SECURITIES

U.S. Treasury securities are direct obligations of the federal government
of the United States.

AGENCY SECURITIES

Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities.

CORPORATE DEBT SECURITIES

Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Prime Fund, the Prime Cash Fund and the Prime
Value Fund may also purchase interests in bank loans to companies. The credit
risks of corporate debt securities vary widely among issuers.

COMMERCIAL PAPER

Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.

DEMAND INSTRUMENTS

Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Funds
treats demand instruments as short-term securities, even though their stated
maturity may extend beyond one year.

BANK INSTRUMENTS

Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in
U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-
U.S. branches of U.S. or foreign banks.

ASSET BACKED SECURITIES

Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes or pass through certificates.

TAX EXEMPT SECURITIES

Tax exempt securities are fixed income securities that pay interest that is not
subject to federal regular income taxes. Typically, states, counties, cities and
other political subdivisions and authorities issue tax exempt securities. The
market categorizes tax exempt securities by their source of repayment.

VARIABLE RATE DEMAND INSTRUMENTS

Variable rate demand instruments are tax exempt securities that require the
issuer or a third party, such as a dealer or bank, to repurchase the security
for its face value upon demand. The securities also pay interest at a variable
rate intended to cause the securities to trade at their face value. The Funds
treat demand instruments as short-term securities, because their variable
interest rate adjusts in response to changes in market rates, even though their
stated maturity may extend beyond 13 months.

MUNICIPAL NOTES

Municipal notes are short-term tax exempt securities. Many municipalities issue
such notes to fund their current operations before collecting taxes or other
municipal revenues. Municipalities may also issue notes to fund capital projects
prior to issuing long-term bonds. The issuers typically repay the notes at the
end of their fiscal year, either with taxes, other revenues or proceeds from
newly issued notes or bonds.

CREDIT ENHANCEMENT

Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed income security if the issuer defaults. In some cases the
company providing credit enhancement makes all payments directly to the security
holders and receives reimbursement from the issuer. Normally, the credit
enhancer has greater financial resources and liquidity than the issuer. For this
reason, the Adviser usually evaluates the credit risk of a fixed income security
based solely upon its credit enhancement.

Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to the
security's holders. Either form of credit enhancement reduces credit risks by
providing another source of payment for a fixed income security.

REPURCHASE AGREEMENTS

Repurchase agreements are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. A Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.

Repurchase agreements are subject to credit risks.

INVESTMENT RATINGS

The money market instruments in which the Prime Fund, the Prime Cash Fund and
the Tax-Free Fund invest must be rated in the highest short-term rating category
by one or more NRSROs or be of comparable quality to securities having such
ratings. The securities in which the Municipal Fund and the Prime Value Fund
invest must be rated in one of the two highest short-term rating categories by
one or more NRSROs or be of comparable quality to securities having such
ratings.

What are the Specific Risks of Investing in the Funds?

Each of the Funds is subject to interest rate risks. In addition, each of the
Funds (except the Government Tax-Managed Fund) is subject to credit risks.
Finally, the Municipal Fund, the Prime Fund, the Prime Cash Fund, the Prime
Value Fund and the Tax-Free Fund are subject to sector risks.

INTERESTS RATE RISKS

Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as demand
for particular fixed income securities, may cause the price of certain fixed
income securities to fall while the prices of other securities rise or remain
unchanged.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISKS

MUNICIPAL FUND, PRIME FUND, PRIME CASH FUND, PRIME VALUE FUND AND
TAX-FREE FUND

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, a Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities.

Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investors Service. These services assign ratings
to securities by assessing the likelihood of issuer default. Lower credit
ratings correspond to higher credit risk. If a security has not received a
rating, a Fund must rely entirely on the Adviser's credit assessment.

GOVERNMENT FUND, PRIME FUND, PRIME CASH FUND, PRIME VALUE FUND AND
TREASURY FUND

Credit risk includes the possibility that a party to a transaction involving a
Fund will fail to meet its obligations. This could cause a Fund to lose the
benefit of the transaction or prevent a Fund from selling or buying other
securities to implement its investment strategy.

SECTOR RISKS

A substantial part of the portfolios of the Prime Fund and the Prime Value Fund
may be comprised of securities issued by finance companies or the banking
industry, respectively, or companies with similar characteristics. In addition,
a substantial part of the portfolios of the Municipal Fund, the Prime Fund, the
Prime Cash Fund, the Prime Value Fund and the Tax-Free Fund may be comprised of
securities credit enhanced by banks or companies with similar characteristics.
As a result, the Municipal Fund, the Prime Fund, the Prime Cash Fund, the Prime
Value Fund and the Tax-Free Fund will be more susceptible to any economic,
business, political or other developments which generally affect these entities.

What Do Shares Cost?

You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Funds attempt to stabilize the net asset value (NAV) of their Shares
at $1.00 by valuing the portfolio securities using the amortized cost method. A
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Funds do not charge a front-end sales charge. The NAV of the Municipal Fund, the
Prime Cash Fund, the Prime Value Fund and the Tax-Free Fund is determined at
12:00 noon and 3:00 p.m. (Eastern time) and as of the end of regular trading
(normally 4:00 p.m. Eastern time) each day the NYSE is open. The NAV of the
Government Tax- Managed Fund is determined at 1:00 p.m. (Eastern time) and as of
the end of regular trading (normally 4:00 p.m. Eastern time) each day the NYSE
is open. The NAV of the Government Fund, the Prime Fund and the Treasury Fund is
determined at 5:00 p.m. (Eastern time) each day the NYSE is open.

The required minimum initial investment for each Fund is $1,000,000. There is no
required minimum subsequent investment amount.

An account may be opened with a smaller amount as long as the $1,000,000 minimum
is reached within one year. An institutional investor's minimum investment is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.

How are the Funds Sold?

The Funds offer three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Shares.
Each share class has different expenses, which affect their performance. Contact
your investment professional or call 1- 800-341-7400 for more information
concerning the other classes.

The Funds' Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to entities holding Shares in an agency or fiduciary
capacity, financial institutions, financial intermediaries and institutional
investors, or to individuals, directly or through investment professionals. The
Municipal Fund and the Tax-Free Fund may not be a suitable investment for
retirement plans because they invest in municipal securities.

The Distributor and its affiliates may pay out of their assets other
amounts (including items of material value) to investment professionals
for marketing and servicing Shares. The Distributor is a subsidiary of
Federated Investors, Inc. (Federated).

How to Purchase Shares

You may purchase Shares through an investment professional or directly from the
Funds. The Funds reserve the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

* Establish an account with the investment professional; and

* Submit your purchase order for Shares of the Government Tax-Managed Fund to
the investment professional before 2:00 p.m. (Eastern time). You will receive
that day's dividend if the investment professional forwards the order to the
Fund and the Fund receives payment by 2:00 p.m. (Eastern time). You will become
the owner of Shares and receive dividends when the Fund receives your payment.

* Submit your purchase order for Shares of the Municipal Fund, the Prime Cash
Fund, the Prime Value Fund and the Tax-Free Fund to the investment professional
before 3:00 p.m. (Eastern time). You will receive that day's dividend if the
investment professional forwards the order to the Fund and the Fund receives
payment by 3:00 p.m. (Eastern time). You will become the owner of Shares and
receive dividends when the Fund receives your payment.

* Submit your purchase order for Shares of the Government Fund, the Prime Fund
and the Treasury Fund to the investment professional before 5:00 p.m. (Eastern
time). You will receive that day's dividend if the investment professional
forwards the order to the Fund and the Fund receives payment by 5:00 p.m.
(Eastern time). You will become the owner of Shares and receive dividends when
the Fund receives your payment.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUNDS

* Establish your account with a Fund by submitting a completed New Account
Form; and

* Send your payment to the Fund by Federal Reserve wire or check.

You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees incurred by the Fund of Federated
Shareholder Services Company, the Fund's transfer agent.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

BY WIRE

Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

Payment should be made in U.S. dollars and drawn on a U.S. bank. The Funds will
not accept third-party checks (checks originally payable to someone other than
you or The Federated Funds). Orders by mail are considered received when payment
by check is converted into federal funds (normally the business day after the
check is received) and Shares begin earning dividends the next day.

BY INVEST-BY-PHONE

Once you establish an account, you may use the Funds' Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House (ACH) member. To apply, call the Funds for an
authorization form. You may use Invest-By-Phone to purchase Shares approximately
two weeks from the date you file the form with Federated Shareholder Services
Company.

BY AUTOMATED CLEARING HOUSE

Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.

How to Redeem Shares

You should redeem Shares:

* through an investment professional if you purchased Shares through an
investment professional; or

* directly from a Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.

DIRECTLY FROM THE FUNDS

BY TELEPHONE

You may redeem Shares by calling a Fund at

1-800-341-7400 once you have completed the appropriate authorization form for
telephone transactions. If you call before 12:00 noon (Eastern time) with
respect to the Municipal Fund and the Tax-Free Fund, 2:00 p.m. (Eastern time)
with respect to the Government Tax-Managed Fund, 3:00 p.m. (Eastern time) with
respect to the Prime Cash Fund and the Prime Value Fund and 5:00 p.m. (Eastern
time) with respect to the Government Fund, the Prime Fund and the Treasury Fund,
your redemption will be wired to you the same day. You will not receive that
day's dividend.

If you call after 12:00 noon (Eastern time) with respect to the Municipal Fund
and the Tax-Free Fund, 2:00 p.m. (Eastern time) with respect to the Government
Tax-Managed Fund, 3:00 p.m. (Eastern time) with respect to the Prime Cash Fund
and the Prime Value Fund and 5:00 p.m. (Eastern time) with respect to the
Government Fund, the Prime Fund and the Treasury Fund, your redemption will be
wired to you the following business day. You will receive that day's dividend.
With respect to the Tax-Free Fund and the Government Tax-Managed Fund, under
limited circumstances, arrangements may be made with the Distributor for
same-day payment of redemption proceeds, without that day's dividend, for
redemption requests received before 12:00 noon (Eastern time) and 2:00 p.m.
(Eastern time), respectively.

BY MAIL

You may redeem Shares by mailing a written request to a Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed. Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

* Fund Name and Share Class, account number and account registration;

* amount to be redeemed; and

* signatures of all shareholders exactly as registered.

Call your investment professional or the Funds if you need special instructions.

SIGNATURE GUARANTEES

Signatures must be guaranteed if:

* your redemption will be sent to an address other than the address of
record;

* your redemption will be sent to an address of record that was changed
within the last 30 days; or

* a redemption is payable to someone other than the shareholder(s) of
record.

A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.

PAYMENT METHODS FOR REDEMPTIONS

Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:

* an electronic transfer to your account at a financial institution that is
an ACH member; or

* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

REDEMPTION IN KIND

Although each Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

* to allow your purchase to clear;

* during periods of market volatility; or

* when a shareholder's trade activity or amount adversely impacts a Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from a Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Funds will record your telephone instructions. If a Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

The Funds no longer issue share certificates. If you are redeeming Shares
represented by certificates previously issued by a Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.

Account and Share Information

ACCOUNT ACTIVITY

You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

The Funds declare any dividends daily and pay them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after a Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.

The Funds do not expect to realize any capital gains or losses. If capital gains
or losses were to occur, they could result in an increase or decrease in
dividends. The Funds will pay any capital gains at least annually. Your
dividends and capital gains distributions will be automatically reinvested in
additional Shares without a sales charge, unless you elect cash payments.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, accounts may be
closed if redemptions cause the account balance to fall below the minimum
initial investment amount. Before an account is closed, you will be notified and
allowed 30 days to purchase additional Shares to meet the minimum.

TAX INFORMATION

The Funds send an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Funds. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time a Fund holds
its assets.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.

The Municipal Fund and the Tax-Free Fund send an annual statement of your
account activity to assist you in completing your federal, state and local tax
returns. It is anticipated that distributions from the Municipal Fund and the
Tax-Free Fund will be primarily dividends that are exempt from federal income
tax, although a portion of each Fund's dividends may not be exempt. Dividends
may be subject to state and local taxes. Capital gains and non-exempt dividends
are taxable whether paid in cash or reinvested in the Funds. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.

Who Manages the Funds?

The Board of Trustees governs the Funds. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Funds'
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

The Adviser and other subsidiaries of Federated advise approximately 175 mutual
funds and separate accounts, which totaled approximately $111 billion in assets
as of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.

ADVISORY FEES

The Adviser receives an annual investment advisory fee of 0.20% of each Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Funds for certain operating expenses.

YEAR 2000 READINESS

The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or may experience other date-related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses,
such as the Funds, that rely on computers.

While it is impossible to determine in advance all of the risks to the Funds,
the Funds could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.

The Funds' service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.

Year 2000 problems would also increase the risks of the Funds' investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Funds
may purchase. However, this may be difficult with certain issuers. For example,
funds dealing with foreign service providers or investing in foreign securities
will have difficulty determining the Year 2000 readiness of those entities. The
financial impact of these issues for the Funds is still being determined. There
can be no assurance that potential Year 2000 problems would not have a material
adverse effect on the Funds.

Financial Information

FINANCIAL HIGHLIGHTS

The Financial Highlights will help you understand each Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the Fund is shorter. Some of the information is presented on a per share basis.
Total returns represent the rate an investor would have earned (or lost) on an
investment in a Fund, assuming reinvestment of any dividends and capital gains.

This information has been audited by Arthur Andersen LLP and Ernst & Young
LLP, whose reports, along with each Fund's audited financial statements,
are included in the Annual Reports.

Financial Highlights-Government Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997 1996
1995
<S> <C> <C> <C> <C>
<C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05
0.05
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05)
(0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
TOTAL RETURN 1 5.04% 5.59% 5.43% 5.55%
5.57%

RATIOS TO AVERAGE NET ASSETS:
Expenses 2 0.54% 0.55% 0.55% 0.56%
0.60%
Net investment income 2 4.58% 5.10% 4.97% 5.05%
5.18%
Expenses (after waiver) 0.20% 0.20% 0.20% 0.20%
0.20%
Net investments income (after waiver) 4.92% 5.45% 5.32% 5.41%
5.58%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $4,498,581 $3,707,106 $3,293,392 $2,182,999
$1,926,516
</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 During the period, certain fees were voluntarily waived. If such voluntarily
waivers had not occurred, the ratios would have been as indicated.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Government Obligations Tax-Managed Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997
1996 1995 1
<S> <C> <C> <C>
<C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05
0.05 0.01
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05)
(0.05) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
TOTAL RETURN 2 5.00% 5.49% 5.35%
5.50% 0.94%

RATIOS TO AVERAGE NET ASSETS:
Expenses 3 0.55% 0.57% 0.58%
0.61% 0.85% 4
Net investment income 3 4.53% 4.98% 4.88%
4.84% 5.13% 4
Expenses (after waivers) 0.20% 0.20% 0.20%
0.17% 0.20% 4
Net investment income (after waivers) 4.88% 5.35% 5.26%
5.28% 5.78% 4 SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $1,066,412 $953,268 $510,683
$199,243 $3,070
</TABLE>

1 Reflects operations for the period from June 2, 1995 (date of initial public
investment) to July 31, 1995.

2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

3 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

4 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Municipal Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED JANUARY
31,
1999 1 1999 1998 1997 2
1996 1995
<S> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02 0.03 0.04 0.04
0.04 0.03
LESS DISTRIBUTIONS:
Distributions from net investment income (0.02) (0.03) (0.04) (0.04)
(0.04 ) (0.03)
Distributions from net realized gains on investments - - - -
(0.00) 3 -
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
TOTAL RETURN 4 1.59% 3.53% 3.68% 3.56%
4.03% 3.04%

RATIOS TO AVERAGE NET ASSETS:
Expenses 5 0.36% 6 0.59% 0.41% 0.38%
0.30% 0.31%
Net investment income 5 2.99% 6 3.00% 3.34% 3.28%
3.83% 2.70%
Expenses (after waivers) 0.18% 6 0.18% 0.18% 0.18%
0.18% 0.15%
Net investment income (after waivers) 3.17% 6 3.41% 3.57% 3.48%
3.95% 2.86%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $354,034 $303,899 $217,838 $159,561
$135,120 $93,595
</TABLE>

1 The Fund has changed its fiscal year-end from January 31 to July 31.

2 Federated Investment Management Company, formerly Federated Management, became
the Fund's investment adviser on November 15, 1996. Prior to November 15, 1996,
Lehman Brothers Global Asset Management served as the
Fund's investment adviser.

3 Amount represents less than ($0.01) per share.

4 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

5 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

6 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Prime Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997 1996
1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05
0.06
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05)
(0.06)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
TOTAL RETURN 1 5.14% 5.64% 5.45% 5.58%
5.65%

RATIOS TO AVERAGE NET ASSETS:
Expenses 2 0.55% 0.55% 0.56% 0.56%
0.58%
Net Investment income 2 4.64% 5.16% 4.99% 5.07%
5.22%
Expenses (after waivers) 0.20% 0.20% 0.20% 0.20%
0.20%
Net investment income (after waivers) 4.99% 5.51% 5.35% 5.43%
5.60%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $5,185,448 $3,980,339 $3,588,082 $3,032,602
$2,457,797
</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Prime Cash Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED JANUARY 31,
1999 1 1999 1998 1997 2
1996 1995
<S> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02 0.05 0.06 0.05
0.06 0.04
LESS DISTRIBUTIONS:
Distributions from net
investment income (0.02) (0.05) (0.06) (0.05)
(0.06) (0.04)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
TOTAL RETURN 3 2.42% 5.50% 5.61% 5.38%
6.08% 4.52%

RATIOS TO AVERAGE NET ASSETS:
Expenses 4 0.31% 5 0.55% 0.30% 0.32%
0.25% 0.25%
Net Investment income 4 4.68% 5 4.92% 5.32% 5.11%
5.82% 4.17%
Expenses (after waivers) 0.18% 5 0.18% 0.18% 0.18%
0.17% 0.12%
Net investment income
(after waivers) 4.81% 5 5.29% 5.44% 5.25%
5.90% 4.30%
SUPPLEMENTAL DATA:
Net assets, end of period
(000 omitted) $1,929,887 $1,825,266 $1,100,620 $1,572,912
$3,919,186 $1,538,802
</TABLE>

1 The Fund has changed its fiscal year-end from January 31 to July 31.

3 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

4 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

5 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Prime Value Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED JANUARY 31,
1999 1 1999 1998 1997 2
1996 1995
<S> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02 0.05 0.06 0.05
0.06 0.04
LESS DISTRIBUTIONS:
Distributions from net investment income (0.02) (0.05) (0.06) (0.05)
(0.06) (0.04)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
TOTAL RETURN 3 2.44% 5.53% 5.68% 5.41%
6.10% 4.51%

RATIOS TO AVERAGE NET ASSETS:
Expenses 4 0.31% 5 0.56% 0.32% 0.31%
0.25% 0.25%
Net investment income 4 4.72% 5 4.97% 5.41% 5.14%
5.85% 4.04%
Expenses (after waivers) 0.16% 5 0.16% 0.14% 0.16%
0.17% 0.09%
Net investment income (after waivers) 4.87% 5 5.37% 5.59% 5.29%
5.93% 4.20%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $1,147,717 $1,474,123 $865,742 $387,994
$2,754,390 $1,470,317
</TABLE>

1 The Fund has changed its fiscal year-end from January 31 to July 31.

3 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

4 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

5 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Tax-Free Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.03 0.03 0.03 0.03 0.04
LESS DISTRIBUTIONS:
Distributions from net investment income (0.03) (0.03) (0.03) (0.03) (0.04)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 3.14% 3.50% 3.49% 3.55% 3.64%

RATIOS TO AVERAGE NET ASSETS:
Expenses 2 0.55% 0.55% 0.55% 0.56% 0.59%
Net investment income 2 2.73% 3.10% 3.08% 3.10% 3.23%
Expenses (after waivers) 0.20% 0.20% 0.20% 0.20% 0.20%
Net investment income (after waivers) 3.08% 3.45% 3.43% 3.46% 3.62%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $2,461,697 $2,279,770 $1,474,180 1,514,979 $1,295,458
</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Treasury Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.05
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 4.91% 5.54% 5.36% 5.53% 5.50%

RATIOS TO AVERAGE NET ASSETS:
Expenses 2 0.54% 0.55% 0.55% 0.56% 0.56%
Net investment income 2 4.45% 5.05% 4.89% 5.01% 5.06%
Expenses (after waivers) 0.20% 0.20% 0.20% 0.20% 0.20%
Net investment income (after waivers) 4.79% 5.40% 5.24% 5.37% 5.42%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $5,477,028 $5,289,871 $4,814,583 $4,649,870 $3,441,068
</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

[Graphic]
Federated
World-Class Investment Manager

Money Market Obligations Trust

Government Obligations Fund

Government Obligations Tax-Managed Fund

Municipal Obligations Fund

Prime Obligations Fund

Prime Cash Obligations Fund

Prime Value Obligations Fund

Tax-Free Obligations Fund

Treasury Obligations Fund

INSTITUTIONAL SHARES

PROSPECTUS

OCTOBER 31, 1999

A Statement of Additional Information (SAI) dated October 31, 1999, is
incorporated by reference into this prospectus. Additional information about the
Funds and their investments is contained in the Funds' SAI, Annual and
Semi-Annual Reports to shareholders as they become available. The Annual Reports
discuss market conditions and investment strategies that significantly affected
the Funds' performance during their last fiscal year. To obtain the SAI, the
Annual Report, the Semi-Annual Report and other information without charge, and
make inquiries, call your investment professional or the Funds at
1-800-341-7400.

You can obtain information about the Funds (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access Fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, DC 20549-0102. Call 1-202-942- 8090 for
information on the Public Reference Room's operations and copying fees.
[Graphic] Federated Money Market Obligations Trust Federated Investors Funds
5800 Corporate Drive Pittsburgh, PA 15237-7000 1-800-341-7400
WWW.FEDERATEDINVESTORS.COM Federated Securities Corp., Distributor

Investment Company Act File No. 811-5950

Cusip 60934N104

Cusip 60934N856

Cusip 60934N658

Cusip 60934N203

Cusip 60934N625

Cusip 60934N583

Cusip 60934N401

Cusip 60934N500

G02705-01 (10/99)

[Graphic]

STATEMENT OF ADDITIONAL INFORMATION

Money Market Obligations Trust

Government Obligations Fund (Government Fund)

Government Obligations Tax-Managed Fund (Government Tax-Managed Fund)

Municipal Obligations Fund (Municipal Fund)

Prime Obligations Fund (Prime Fund)

Prime Cash Obligations Fund (Prime Cash Fund)

Prime Value Obligations Fund (Prime Value Fund)

Tax-Free Obligations Fund (Tax-Free Fund)

Treasury Obligations Fund (Treasury Fund)

INSTITUTIONAL SHARES

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Institutional Shares of the Funds,
dated October 31, 1999. This SAI incorporates by reference the Funds' Annual
Reports. Obtain the prospectus or the Annual Reports without charge by calling
1-800-341-7400.

OCTOBER 31, 1999

[Graphic]
Federated
World-Class Investment Manager
Money Market Obligations Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor

G02705-03 (10/99)

[Graphic]

CONTENTS

How are the Funds Organized? 1
Securities in Which the Funds Invest 1
What Do Shares Cost? 5
How are the Funds Sold? 5
Subaccounting Services 6
Redemption in Kind 6
Massachusetts Partnership Law 6
Account and Share Information 7
Tax Information 7
Who Manages and Provides Services to the Funds? 7
How Do the Funds Measure Performance? 11
Who is Federated Investors, Inc.? 14
Financial Information 16
Investment Ratings 16
Addresses 17

How are the Funds Organized?

Each Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on October 3, 1988. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Municipal Fund and the Prime Value Fund, which
were established on February 5, 1993, and the Prime Cash Fund, which was
established on November 16, 1992, will be reorganized as portfolios of the Trust
on November 1, 1999.

The Board of Trustees (the Board) has established three classes of shares of the
Funds, known as Institutional Shares, Institutional Service Shares and
Institutional Capital Shares. This SAI relates to Institutional Shares (Shares).
The Funds' investment adviser is Federated Investment Management Company
(Adviser). Effective March 31, 1999, Federated Management, former adviser to the
Funds (except the Government Tax-Managed Fund) and Federated Administrative
Services, former adviser to the Government Tax-Managed Fund, became Federated
Investment Management Company (formerly, Federated Advisers).

Securities in Which the Funds Invest

SECURITIES DESCRIPTIONS AND TECHNIQUES

The Funds' principal securities are described in the prospectus. In pursuing
their investment strategies, the Funds may invest in such securities, or the
securities described below, for any purpose that is consistent with their
investment objectives.

ZERO COUPON SECURITIES

Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred to
as a coupon payment). Investors buy zero coupon securities at a price below the
amount payable at maturity. The difference between the purchase price and the
amount paid at maturity represents interest on the zero coupon security.
Investors must wait until maturity to receive interest and principal, which
increases the interest rate and credit risks of a zero coupon security.

SPECIAL TRANSACTIONS

DELAYED DELIVERY TRANSACTIONS

Delayed delivery transactions, including when-issued transactions, are
arrangements in which a Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by a Fund to the issuer and
no interest accrues to a Fund. A Fund records the transaction when it agrees to
buy the securities and reflects their value in determining the price of its
shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for a Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.

SECURITIES LENDING

A Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, a Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay a
Fund the equivalent of any dividends or interest received on the loaned
securities. A Fund will reinvest cash collateral in securities that qualify as
an acceptable investment for a Fund. However, a Fund must pay interest to the
borrower for the use of cash collateral. Loans are subject to termination at the
option of a Fund or the borrower. A Fund will not have the right to vote on
securities while they are on loan, but it will terminate a loan in anticipation
of any important vote. A Fund may pay administrative and custodial fees in
connection with a loan and may pay a negotiated portion of the interest earned
on the cash collateral to a securities lending agent or broker.

The Prime Fund has no present intention to engage in securities lending.

ASSET COVERAGE

In order to secure its obligations in connection with special transactions, a
Fund will either own the underlying assets or set aside readily marketable
securities with a value that equals or exceeds the Fund's obligations. Unless a
Fund has other readily marketable assets to set aside, it cannot trade assets
used to secure such obligations without terminating a special transaction. This
may cause a Fund to miss favorable trading opportunities or to realize losses on
special transactions.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Funds may invest their assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out its investment policies and managing its uninvested cash.

In addition, a Fund may invest in the securities described below.

PRIME FUND, PRIME CASH FUND AND PRIME VALUE FUND

MUNICIPAL SECURITIES

Municipal securities are issued by states, counties, cities and other political
subdivisions and authorities. Although many municipal securities are exempt from
federal income tax, the Funds may invest in taxable municipal securities.

INSURANCE CONTRACTS

Insurance contracts include guaranteed investment contracts, funding
agreements and annuities. The Funds treat these contracts as fixed income
securities.

FOREIGN SECURITIES

Foreign securities are securities of issuers based outside the United
States. The Funds consider an issuer to be based outside the United States
if:

* it is organized under the laws of, or has a principal office located in,
another country;

* the principal trading market for its securities is in another country; or

* it (or its subsidiaries) derived in its most current fiscal year at least 50%
of its total assets, capitalization, gross revenue or profit from goods
produced, services performed, or sales made in another country.

Along with the risks normally associated with domestic securities of the same
type, foreign securities are subject to risks of foreign investing.

The Prime Fund, the Prime Cash Fund and the Prime Value Fund also may invest in
U.S. Treasury securities and agency securities, which are described in the
prospectus.

MUNICIPAL FUND AND TAX-FREE FUND

GENERAL OBLIGATION BONDS

General obligation bonds are supported by the issuer's power to exact property
or other taxes. The issuer must impose and collect taxes sufficient to pay
principal and interest on the bonds. However, the issuer's authority to impose
additional taxes may be limited by its charter or state law.

SPECIAL REVENUE BONDS

Special revenue bonds are payable solely from specific revenues received by the
issuer such as specific taxes, assessments, tolls, or fees. Bondholders may not
collect from the municipality's general taxes or revenues. For example, a
municipality may issue bonds to build a toll road, and pledge the tolls to repay
the bonds. Therefore, a shortfall in the tolls normally would result in a
default on the bonds.

PRIVATE ACTIVITY BONDS

Private activity bonds are special revenue bonds used to finance private
entities. For example, a municipality may issue bonds to finance a new factory
to improve its local economy. The municipality would lend the proceeds from its
bonds to the company using the factory, and the company would agree to make loan
payments sufficient to repay the bonds. The bonds would be payable solely from
the company's loan payments, not from any other revenues of the municipality.
Therefore, any default on the loan normally would result in a default on the
bonds.

The interest on many types of private activity bonds is subject to the
federal alternative minimum tax (AMT). The Funds may invest in bonds
subject to AMT.

MUNICIPAL LEASES

Municipalities may enter into leases for equipment or facilities. In order to
comply with state public financing laws, these leases are typically subject to
annual appropriation. In other words, a municipality may end a lease, without
penalty, by not providing for the lease payments in its annual budget. After the
lease ends, the lessor can resell the equipment or facility but may lose money
on the sale.

The Funds may invest in securities supported by individual leases or pools of
municipal leases.

TEMPORARY DEFENSIVE INVESTMENTS

The Municipal Fund and the Tax-Free Fund may make temporary defensive
investments in the following taxable securities, which are described in the
prospectus or herein: U.S. Treasury securities, agency securities, bank
instruments, corporate debt securities, commercial paper, repurchase agreements
and reverse repurchase agreements.

GOVERNMENT FUND, GOVERNMENT TAX-MANAGED FUND, MUNICIPAL FUND, PRIME
FUND, PRIME CASH FUND, PRIME VALUE FUND AND TAX-FREE FUND

REVERSE REPURCHASE AGREEMENTS

Reverse repurchase agreements are repurchase agreements in which a Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by a Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because a Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.

INVESTMENT RATINGS

The ratings categories of a nationally recognized statistical rating
organization (NRSRO) are determined without regard for sub-categories and
gradations. For example, securities rated SP-1 or SP-2 by Standard & Poor's
(S&P), MIG-1 or MIG-2 by Moody's Investors Service (Moody's), or F-1+, F-1 or
F-2 by Fitch IBCA, Inc. (Fitch) are all considered rated in one of the two
highest short-term rating categories. The Funds will follow applicable
regulations in determining whether a security rated by more than one rating
service can be treated as being in the highest or one of the two highest
short-term rating categories. See "Regulatory Compliance."

INVESTMENT RISKS

There are many factors which may affect an investment in the Funds. The Funds'
principal risks are described in the prospectus. Additional risk factors are
outlined below.

GOVERNMENT TAX-MANAGED FUND

CREDIT RISKS

Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.

MUNICIPAL FUND AND TAX-FREE FUND

CREDIT RISKS

Credit risk includes the possibility that a party to a transaction involving the
Funds will fail to meet its obligations. This could cause the Funds to lose the
benefit of the transaction or prevent a Fund from selling or buying other
securities to implement its investment strategy.

TAX RISKS

In order to be tax exempt, municipal securities must meet certain legal
requirements. Failure to meet such requirements may cause the interest received
and distributed by the Funds to shareholders to be taxable.

Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.

PRIME FUND, PRIME CASH FUND AND PRIME VALUE FUND

RISKS OF FOREIGN INVESTING

Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable than those of the U.S. Securities in foreign
markets may also be subject to taxation policies that reduce returns for U.S.
investors.

PREPAYMENT RISKS

Unlike traditional fixed income securities, which pay a fixed rate of interest
until maturity (when the entire principal amount is due), payments on asset
backed securities include both interest and a partial payment of principal.
Partial payment of principal may be comprised of scheduled principal payments as
well as unscheduled payments from voluntary prepayment, refinancing, or
foreclosure of the underlying loans. If a Fund receives unscheduled prepayments,
it may have to reinvest the proceeds in other fixed income securities with lower
interest rates, higher credit risks, or other less favorable characteristics.

GOVERNMENT FUND, GOVERNMENT TAX-MANAGED FUND, MUNICIPAL FUND, PRIME
FUND, PRIME CASH FUND, PRIME VALUE FUND AND TAX-FREE FUND

LEVERAGE RISKS

Leverage risk is created when an investment exposes the Funds to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Fund's risk of loss and potential for gain.

FUNDAMENTAL INVESTMENT OBJECTIVES AND POLICIES

<TABLE>
<CAPTION>
FUND OBJECTIVE
<S> <C>
Government Fund To provide current income consistent with
stability of principal.
Government Tax-Managed Fund To provide current income
consistent with stability of principal and
liquidity.
Prime Fund To provide current income consistent with
stability of principal.
Tax-Free Fund To provide dividend income exempt from
federal regular income tax consistent with
stability of principal.
Treasury Fund To provide current income consistent with
stability of principal.
</TABLE>

The investment objective of each Fund may not be changed by the Fund's Trustees
without shareholder approval.

As a matter of investment policy which cannot be changed without shareholder
approval, at least 80% of the Municipal Fund's and the Tax-Free Fund's annual
interest income will be exempt from federal regular income tax.

INVESTMENT LIMITATIONS

DIVERSIFICATION OF INVESTMENTS

With respect to securities comprising 75% of the value of its total assets, a
Fund will not purchase securities of any one issuer (other than cash; cash
items; securities issued or guaranteed by the government of the U.S. or its
agencies or instrumentalities and repurchase agreements collateralized by such
U.S. government securities; and securities of other investment companies) if, as
a result, more than 5% of the value of its total assets would be invested in
securities of that issuer, or the Fund would own more than 10% of the
outstanding voting securities of that issuer.

ISSUING SENIOR SECURITIES AND BORROWING MONEY

A Fund may borrow money, directly or indirectly, and issue senior securities to
the maximum extent permitted under the 1940 Act.

INVESTING IN REAL ESTATE

A Fund may not purchase or sell real estate, provided that this restriction does
not prevent the Fund from investing in issuers which invest, deal, or otherwise
engage in transactions in real estate or interests therein, or investing in
securities that are secured by real estate or interests therein. A Fund may
exercise its rights under agreements relating to such securities, including the
right to enforce security interests and to hold real estate acquired by reason
of such enforcement until that real estate can be liquidated in an orderly
manner.

INVESTING IN COMMODITIES

A Fund may not purchase or sell physical commodities, provided that the Fund may
purchase securities of companies that deal in commodities.

UNDERWRITING

A Fund may not underwrite the securities of other issuers, except that the Fund
may engage in transactions involving the acquisition, disposition or resale of
its portfolio securities, under circumstances where it may be considered to be
an underwriter under the Securities Act of 1933.

LENDING CASH OR SECURITIES

A Fund may not make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering into repurchase agreements,
lending its assets to broker/dealers or institutional investors and investing in
loans, including assignments and participation interests.

CONCENTRATION OF INVESTMENTS

A Fund (with the exception of the Prime Fund and the Prime Value Fund) will not
make investments that will result in the concentration of its investments in the
securities of issuers primarily engaged in the same industry. Government
securities, municipal securities and bank instruments will not be deemed to
constitute an industry.

The Prime Fund will not make investments that will result in the concentration
of its investments in the securities of issuers primarily engaged in the same
industry, except that the Prime Fund may invest 25% or more of the value of its
total assets in the commercial paper issued by finance companies. Government
securities, municipal securities and bank instruments will not be deemed to
constitute an industry.

The Prime Value Fund will not make investments that will result in the
concentration of its investments in the securities of issuers primarily engaged
in the same industry, except that the Prime Value Fund may invest 25% or more of
the value of its total assets in obligations of issuers in the banking industry
or in obligations, such as repurchase agreements, secured by such obligations.
Government securities, municipal securities and bank instruments will not be
deemed to constitute an industry.

THE ABOVE LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE BOARD AND BY
THE "VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING SECURITIES," AS DEFINED BY THE
INVESTMENT COMPANY ACT OF 1940. THE FOLLOWING LIMITATIONS, HOWEVER, MAY BE
CHANGED BY THE BOARD WITHOUT SHAREHOLDER APPROVAL. SHAREHOLDERS WILL BE NOTIFIED
BEFORE ANY MATERIAL CHANGE IN THESE LIMITATIONS BECOMES EFFECTIVE.

PLEDGING ASSETS

A Fund will not mortgage, pledge, or hypothecate any of its assets, provided
that this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.

BUYING ON MARGIN

A Fund will not purchase securities on margin, provided that a Fund may obtain
short-term credits necessary for the clearance of purchases and sales of
securities.

INVESTING IN ILLIQUID SECURITIES

A Fund will not purchase securities for which there is no readily available
market, or enter into repurchase agreements or purchase time deposits maturing
in more than seven days, if immediately after and as a result, the value of such
securities would exceed, in the aggregate, 10% of a Fund's net assets.

INVESTING IN RESTRICTED SECURITIES

The Municipal Fund, the Prime Fund, the Prime Cash Fund, the Prime Value Fund
and the Tax-Free Fund may invest in securities subject to restriction on resale
under the federal securities laws.

Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
limitation.

For purposes of the diversification limitation, the Funds consider certificates
of deposit and demand and time deposits issued by a U.S. branch of a domestic
bank or savings association having capital, surplus, and undivided profits in
excess of $100,000,000 at the time of investment to be "cash items."

To conform to the current view of the Securities and Exchange Commission (SEC)
that only domestic bank instruments may be excluded from industry concentration
limitations, as a matter of non-fundamental policy, the Funds will not exclude
foreign bank instruments from industry concentration limits as long as the
policy of the SEC remains in effect. As a non-fundamental operating policy, the
Funds will consider concentration to be the investment of more than 25% of the
value of its total assets in any one industry.

For purposes of the concentration limitation (with the exception of the Prime
Fund and the Prime Value Fund): (a) utility companies will be divided according
to their services, for example, gas, gas transmission, electric and telephone
will each be considered a separate industry; (b) financial service companies
will be classified according to the end users of their services, for example,
automobile finance, bank finance and diversified finance will each be considered
a separate industry; and (c) asset-backed securities will be classified
according to the underlying assets securing such securities.

REGULATORY COMPLIANCE

The Funds may follow non-fundamental operational policies that are more
restrictive than their fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Funds will comply
with the various requirements of Rule 2a-7 (the Rule), which regulates money
market mutual funds. The Funds will determine the effective maturity of their
investments according to the Rule. The Funds may change these operational
policies to reflect changes in the laws and regulations without the approval of
their shareholders.

DETERMINING MARKET VALUE OF SECURITIES

The Board has decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on Shares of the
Funds computed by dividing the annualized daily income on the Fund's portfolio
by the net asset value computed as above may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the opposite may be true.

The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in the Rule. Under the Rule,
the Board must establish procedures reasonably designed to stabilize the net
asset value per Share, as computed for purposes of distribution and redemption,
at $1.00 per Share, taking into account current market conditions and each
Fund's investment objective. The procedures include monitoring the relationship
between the amortized cost value per Share and the net asset value per Share
based upon available indications of market value. The Board will decide what, if
any, steps should be taken if there is a difference of more than 0.5 of 1%
between the two values. The Board will take any steps they consider appropriate
(such as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from differences
between the two methods of determining net asset value.

What Do Shares Cost?

The NAV for each class of Shares may differ due to the variance in daily net
income realized by each class. Such variance will reflect only accrued net
income to which the shareholders of a particular class are entitled.

How are the Funds Sold?

Under the Distributor's Contract with the Funds, the Distributor
(Federated Securities Corp.) offers Shares on a continuous, best-efforts
basis.

SHAREHOLDER SERVICES

The Funds may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.

SUPPLEMENTAL PAYMENTS

Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of a Fund's assets).
The Distributor and/or Federated Shareholder Services Company may be reimbursed
by the Adviser or its affiliates.

Investment professionals receive such fees for providing

distribution-related or shareholder services such as sponsoring sales, providing
sales literature, conducting training seminars for employees, and engineering
sales-related computer software programs and systems. Also, investment
professionals may be paid cash or promotional incentives, such as reimbursement
of certain expenses relating to attendance at informational meetings about the
Funds or other special events at recreational-type facilities, or items of
material value. These payments will be based upon the amount of Shares the
investment professional sells or may sell and/or upon the type and nature of
sales or marketing support furnished by the investment professional.

Subaccounting Services

Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.

Redemption in Kind

Although the Funds intend to pay Share redemptions in cash, they reserve the
right, as described below, to pay the redemption price in whole or in part by a
distribution of a Fund's portfolio securities.

Because the Funds have elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Funds are obligated to pay Share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.

Any Share redemption payment greater than this amount will also be in cash
unless the Funds' Board determines that payment should be in kind. In such a
case, the Funds will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Funds determine their NAV.
The portfolio securities will be selected in a manner that the Funds' Board
deems fair and equitable and, to the extent available, such securities will be
readily marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.

Massachusetts Partnership Law

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.

In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.

Account and Share Information

VOTING RIGHTS

Each Share of a Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All Shares of the Trust have
equal voting rights, except that in matters affecting only a particular Fund or
class, only Shares of that Fund or class are entitled to vote.

Trustees may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of a Trust's outstanding Share of
all series entitled to vote.

As of October 7, 1999, the following shareholders owned of record, beneficially,
or both, 5% or more of outstanding Institutional Shares of the Funds: Tritel
PCS, Inc., Jackson, Mississippi, 10.47%, Var & Co., St. Paul, Minnesota, 5.33%
and Fleet Securities Corp., Rochester, New York, 5.29% of the Government Fund;
Scaup & Co., Boston, Massachusetts, 13.27%, Panabco, Newark, Ohio, 10.98%,
Loring, Wolcott & Coolidge, Boston, Massachusetts, 7.10%, Santa Monica Bank,
Santa Monica, California, 6.30%, Turtle & Co., Boston, Massachusetts, 5.74% and
BDG & Co., Boston, Massachusetts, 5.37% of the Government Tax-Managed Fund;
Synopsys, Inc., Mountain View, California, 12.86%, Sinclair Oil Corp., Salt Lake
City, Utah, 8.01%, Evergreen Florida c/o State Street Bank & Trust, North
Quincy, Massachusetts, 6.85%, Evergreen Select International Tax-Exempt Bond
Fund, Charlotte, North Carolina, 5.63% and Dress Barn, Inc., Suffern, New York,
5.323% of the Municipal Fund; America Online, Inc., Dulles, Virginia, 7.04% of
the Prime Fund; Frost National Bank, San Antonio, Texas, 9.92% of the Prime Cash
Fund; Harron Management Co., LLC, Frazier, Pennsylvania, 16.76%, Federated
Investors Management Co., Pittsburgh, Pennsylvania, 9.36%, Comcast Corporate
Funding, Wilmington, Delaware, 8.26% of the Prime Value Fund; The Chase
Manhattan Bank, N.A., New York, New York, 13.80%, Wachovia Bank, Winston-Salem,
North Carolina, 11.80%, Fleet Securities Corp., Rochester, New York, 6.67%,
Maril & Co., Milwaukee, Wisconsin, 6.51% and Var & Co., St. Paul, Minnesota,
5.05% of the Tax-Free Fund; Turtle & Co., Boston, Massachusetts, 15.66%, Fleet
Securities Corp., Rochester, New York, 8.29% and Var & Co., St. Paul, Minnesota,
5.41% of the Treasury Fund.

Tax Information

FEDERAL INCOME TAX

Each Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.

Each Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.

Who Manages and Provides Services to the Funds?

BOARD OF TRUSTEES

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 21
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Funds' Adviser.

As of October 7, 1999, the Trust's Board and Officers as a group owned less than
1% of the Trust's outstanding Shares.

<TABLE>
<CAPTION>
NAME
BIRTH DATE AGGREGATE TOTAL COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND COMPLEX
<S> <C> <C> <C>
JOHN F. DONAHUE*#+ Chief Executive Officer $0 $0 for the Trust and
Birth Date: July 28, 1924 and Director or Trustee of 54 other investment
Federated Investors Tower the Federated Fund companies in the
1001 Liberty Avenue Complex; Chairman and Fund Complex
Pittsburgh, PA Director, Federated
CHAIRMAN AND TRUSTEE Investors, Inc.; Chairman
and Trustee, Federated Investment
Management Company; Chairman and
Director, Federated Investment
Counseling and Federated Global
Investment Management Corp.; Chairman,
Passport Research, Ltd.
THOMAS G. BIGLEY Director or Trustee of $22,998.69 $113,860.22 for the Trust
Birth Date: February 3, 1934 the Federated Fund and 54 other investment
15 Old Timber Trail Complex; Director, Member companies in the
Pittsburgh, PA of Executive Committee, Fund Complex
TRUSTEE Children's Hospital of
Pittsburgh; Director,
Robroy Industries, Inc.
(coated steel conduits/
computer storage
equipment); formerly:
Senior Partner, Ernst &
Young LLP; Director, MED
3000 Group, Inc.
(physician practice
management); Director,
Member of Executive
Committee, University of
Pittsburgh.

<CAPTION>
NAME
BIRTH DATE AGGREGATE TOTAL COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND COMPLEX
<S> <C> <C> <C>
JOHN T. CONROY, JR. Director or Trustee of the $25,312.12 $125,264.48 for the Trust
Birth Date: June 23, 1937 Federated Fund Complex; and 54 other investment
Wood/Commercial Dept. President, Investment companies in the
John R. Wood Associates, Inc. Realtors Properties Corporation; Fund Complex
3255 Tamiami Trail North Senior Vice President,
Naples, FL John R. Wood and
TRUSTEE Associates, Inc.,
Realtors; Partner or
Trustee in private real
estate ventures in
Southwest Florida;
formerly: President,
Naples Property
Management, Inc. and
Northgate Village
Development Corporation.
NICHOLAS CONSTANTAKIS++ Director or Trustee of the $3,686.46 $47,958.02 for the Trust
Birth Date: September 3, 1939 Federated Fund Complex and 29 other investment
175 Woodshire Drive formerly: Partner, companies in the
Pittsburgh, PA Andersen Worldwide SC. Fund Complex
TRUSTEE
JOHN F. CUNNINGHAM++ Director or Trustee of some $12,056.51 $0 for the Trust and
Birth Date: March 5, 1943 of the Federated Fund 46 other investment
353 El Brillo Way Complex; Chairman, companies in the
Palm Beach, FL President and Chief Fund Complex
TRUSTEE Executive Officer,
Cunningham & Co., Inc.
(strategic business
consulting); Trustee
Associate, Boston College;
Director, Iperia Corp.
(communications/software);
formerly: Director,
Redgate Communications and
EMC Corporation (computer
storage systems).
Previous Positions:
Chairman of the Board and
Chief Executive Officer,
Computer Consoles, Inc.;
President and Chief
Operating Officer, Wang
Laboratories; Director,
First National Bank of
Boston; Director, Apollo
Computer, Inc.
J. CHRISTOPHER DONAHUE+ President or Executive $0 $0 for the Trust and
Birth Date: April 11, 1949 Vice President of the 16 other investment
Federated Investors Tower Federated Fund Complex; companies in the
1001 Liberty Avenue Director or Trustee of some Fund Complex
Pittsburgh, PA of the Funds in the
PRESIDENT AND TRUSTEE Federated Fund Complex;
President, Chief Executive Officer and
Director, Federated Investors, Inc.;
President and Trustee, Federated
Investment Management Company;
President and Trustee, Federated
Investment Counseling, President and
Director, Federated Global Investment
Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director,
Federated Services Company.
LAWRENCE D. ELLIS, M.D.* Director or Trustee of the $22,998.69 $113,860.22 for the Trust
Birth Date: October 11, 1932 Federated Fund Complex; and 54 other investment
3471 Fifth Avenue Professor of Medicine, companies in the
Suite 1111 University of Pittsburgh; Fund Complex
Pittsburgh, PA Medical Director,
TRUSTEE University of Pittsburgh
Medical Center-Downtown; Hematologist,
Oncologist, and Internist, University
of Pittsburgh Medical Center; Member,
National Board of Trustees, Leukemia
Society of America.
PETER E. MADDEN Director or Trustee of the $20,158.88 $113,860.22 for the Trust
Birth Date: March 16, 1942 Federated Fund Complex; and 54 other investment
One Royal Palm Way formerly: Representative, companies in the
100 Royal Palm Way Commonwealth of Fund Complex
Palm Beach, FL Massachusetts General
TRUSTEE Court; President, State
Street Bank and Trust
Company and State
Street Corporation.
Previous Positions:
Director, VISA USA and VISA
International; Chairman
and Director,
Massachusetts Bankers
Association; Director,
Depository Trust
Corporation; Director, The
Boston Stock Exchange.
CHARLES F. MANSFIELD, JR. ++ Director or Trustee of some $12,056.51 $0 for the Trust and
Birth Date: April 10, 1945 of the Federated Fund 50 other investment
80 South Road Complex; companies in the
Westhampton Beach, NY Management Consultant. Fund Complex
TRUSTEE Previous Positions: Chief
Executive Officer, PBTC International
Bank; Partner, Arthur Young & Company
(now Ernst & Young LLP); Chief
Financial Officer of Retail Banking
Sector, Chase Manhattan Bank; Senior
Vice President, Marine Midland Bank;
Vice President, Citibank; Assistant
Professor of Banking and Finance, Frank
G. Zarb School of Business, Hofstra
University.
JOHN E. MURRAY, JR., J.D., S.J.D.# Director or Trustee of $24,201.52 $113,860.22 for the Trust
Birth Date: December 20, 1932 the Federated Fund and54 other investment
President, Duquesne University Complex; President, Law companies in the
Pittsburgh, PA Professor, Duquesne Fund Complex
TRUSTEE University; Consulting
Partner, Mollica & Murray;
Director, Michael Baker
Corp. (engineering,
construction, operations,
and technical services).
Previous Positions: Dean
and Professor of Law,
University of Pittsburgh
School of Law; Dean and
Professor of Law, Villanova
University School of Law.
MARJORIE P. SMUTS Director or Trustee of the $22,998.69 $113,860.22 for the Trust
Birth Date: June 21, 1935 Federated Fund Complex; and 54 other investment
4905 Bayard Street Public Relations/ companies in the
Pittsburgh, PA Marketing/Conference Fund Complex
TRUSTEE Planning.
Previous Positions:
National Spokesperson,
Aluminum Company of
America; television
producer; business owner.

<CAPTION>
NAME
BIRTH DATE AGGREGATE TOTAL COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND COMPLEX
<S> <C> <C> <C>
JOHN S. WALSH++ Director or Trustee of some $12,056.51 $0 for the Trust and
Birth Date: November 28, 1957 of the Federated Fund 48 other investment
2007 Sherwood Drive Complex; President and companies in the
Valparaiso, IN Director, Heat Wagon, Inc. Fund Complex
TRUSTEE (manufacturer of
construction temporary
heaters); President and
Director, Manufacturers
Products, Inc.
(distributor of portable
construction heaters);
President, Portable Heater
Parts, a division of
Manufacturers Products,
Inc.; Director, Walsh &
Kelly, Inc. (heavy highway
contractor); formerly:
Vice President, Walsh &
Kelly, Inc.
EDWARD C. GONZALES Trustee or Director of some $0 $0 for the Trust and
Birth Date: October 22, 1930 of the Funds in the 1 other investment
Federated Investors Tower Federated Fund Complex; company in the
1001 Liberty Avenue President, Executive Vice Fund Complex
Pittsburgh, PA President and Treasurer of
EXECUTIVE VICE PRESIDENT some of the Funds in the
Federated Fund Complex; Vice Chairman,
Federated Investors, Inc.; Vice
President, Federated Investment
Management Company and Federated
Investment Counseling, Federated Global
Investment Management Corp. and
Passport Research, Ltd.; Executive Vice
President and Director, Federated
Securities Corp.; Trustee, Federated
Shareholder Services Company.
JOHN W. MCGONIGLE Executive Vice President $0 $0 for the Trust and
Birth Date: October 26, 1938 and Secretary of the 54 other investment
Federated Investors Tower Federated Fund Complex; companies in the
1001 Liberty Avenue Executive Vice President, Fund Complex
Pittsburgh, PA Secretary and Director,
EXECUTIVE VICE PRESIDENT Federated Investors, Inc.;
and SECRETARY Trustee, Federated
Investment Management Company and
Federated Investment Counseling;
Director, Federated Global Investment
Management Corp., Federated Services
Company and Federated Securities Corp.
RICHARD J. THOMAS Treasurer of the Federated $0 $0 for the Trust and
Birth Date: June 17, 1954 Fund Complex; Vice 54 other investment
Federated Investors Tower President - Funds companies in the
1001 Liberty Avenue Financial Services Fund Complex
Pittsburgh, PA Division, Federated
TREASURER Investors, Inc.; formerly:
various management
positions within Funds
Financial Services
Division of Federated
Investors, Inc.
RICHARD B. FISHER President or Vice $0 $0 for the Trust and
Birth Date: May 17, 1923 President of some of the 6 other investment
Federated Investors Tower Funds in the Federated Fund companies in the
1001 Liberty Avenue Complex; Director or Fund Complex
Pittsburgh, PA Trustee of some of the
VICE PRESIDENT Funds in the Federated Fund
Complex; Executive Vice
President, Federated
Investors, Inc.; Chairman
and Director, Federated
Securities Corp.
WILLIAM D. DAWSON, III Chief Investment Officer $0 $0 for the Trust and
Birth Date: March 3, 1949 of this Fund and various 41 other investment
Federated Investors Tower other Funds in the companies in the
1001 Liberty Avenue Federated Fund Complex; Fund Complex
Pittsburgh, PA Executive Vice President,
CHIEF INVESTMENT OFFICER Federated Investment
Counseling, Federated Global Investment
Management Corp., Federated Investment
Management Company and Passport
Research, Ltd.; Registered
Representative, Federated Securities
Corp.; Portfolio Manager, Federated
Administrative Services; Vice
President, Federated Investors, Inc.;
formerly: Executive Vice President and
Senior Vice President, Federated
Investment Counseling Institutional
Portfolio Management Services Division;
Senior Vice President, Federated
Investment Management Company and
Passport Research, Ltd.
DEBORAH A. CUNNINGHAM Deborah A. Cunningham is $0 $0 for the Trust and
Birth Date: September 15, 1959 Vice President of the 6 other investment
Federated Investors Tower Trust. Ms. Cunningham companies in the
1001 Liberty Avenue joined Federated in 1981 Fund Complex
Pittsburgh, PA and has been a Senior
VICE PRESIDENT Portfolio Manager and a
Senior Vice President of
the Funds' Adviser since
1997. Ms. Cunningham
served as a Portfolio
Manager and a Vice
President of the Adviser
from 1993 until 1996.
Ms. Cunningham is a
Chartered Financial
Analyst and received her
M.B.A. in Finance from
Robert Morris College.
Mary Jo Ochson Mary Jo Ochson is Vice $0 $0 for the Trust and
Birth Date: September 12, 1953 President of the Trust. 7 other investment
Federated Investors Tower Ms. Ochson joined companies in the
1001 Liberty Avenue Federated in 1982 and has Fund Complex
Pittsburgh, PA been a Senior Portfolio
VICE PRESIDENT Manager and a Senior Vice
President of the Funds'
Adviser since 1996. From
1988 through 1995,
Ms. Ochson served as a
Portfolio Manager and a
Vice President of the
Funds' Adviser. Ms. Ochson
is a Chartered Financial
Analyst and received her
M.B.A. in Finance from the
University of Pittsburgh.
</TABLE>

* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.

++ Messrs. Cunningham, Mansfield and Walsh became members of the Board on
January 1, 1999. Mr. Constantakis became a member of the Board on
October 1, 1999. Messrs. Cunningham, Mansfield and Walsh did not earn any
fees for serving the Federated Fund Complex since these fees are reported
as of the end of the last calendar year.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for the
Funds.

The Adviser is a wholly owned subsidiary of Federated.

The Adviser shall not be liable to the Trust or any Fund shareholder for any
losses that may be sustained in the purchase, holding, or sale of any security
or for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Trust.

OTHER RELATED SERVICES

Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.

BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have sold or
are selling Shares of the Funds and other funds distributed by the Distributor
and its affiliates. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Funds' Board.

Investment decisions for the Funds are made independently from those of other
accounts managed by the Adviser. When a Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Funds and the account(s) in
a manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Funds, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Funds.

ADMINISTRATOR

Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Funds. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:

MAXIMUM AVERAGE AGGREGATE DAILY ADMINISTRATIVE FEE NET ASSETS OF THE FEDERATED
FUNDS 0.150 of 1% on the first $250 million 0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million 0.075 of 1% on assets in excess of $750
million

The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Services Company may voluntarily waive a portion of its fee and may
reimburse the Funds for expenses.

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Funds' portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Funds. Foreign instruments purchased by the Funds are
held by foreign banks participating in a network coordinated by State Street
Bank.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Funds pay the transfer agent a fee based on the size, type and
number of accounts and transactions made by
shareholders.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants for the Government Fund, the Government
Tax-Managed Fund, the Prime Fund, the Tax-Free Fund and the Treasury Fund,
Arthur Andersen LLP, plans and performs its audit so that it may provide an
opinion as to whether the Funds' financial statements and financial highlights
are free of material misstatement.

INDEPENDENT AUDITORS

The independent auditors for the Municipal Fund, the Prime Cash Fund and the
Prime Value Fund, Ernst & Young LLP, plans and performs its audit so that it may
provide an opinion as to whether the Funds' financial statements and financial
highlights are free of material misstatement.

FEES PAID BY THE FUNDS FOR SERVICES

<TABLE>
<CAPTION>
ADVISORY
FEE SHAREHOLDER
ADVISORY FEE REDUCTION ADMINISTRATIVE
FEE SERVICES FEE
FOR THE YEAR ENDED
JULY 31 1999 1998 1997 1999 1998
1997 1999
<S> <C> <C> <C> <C> <C>
<C> <C>
Government Fund $ 12,594,895 $ 9,364,290 $ 6,777,523 $ 4,748,275 $ 3,531,785 $
2,559,413 $0
5,748,147 4,778,285
3,522,148
Government Tax-
Managed Fund 4,442,958 2,869,299 1,452,990 1,674,995 1,082,093
548,677 0
2,187,791 1,725,248
923,964
Prime Fund 18,192,962 14,305,445 10,030,131 6,858,747 5,395,419
3,787,706 0
9,378,326 7,090,763
5,562,429
Tax-Free Fund 7,008,989 5,174,140 4,284,365 2,642,389 1,951,404
1,617,952 0
3,652,002 2,661,895
2,116,877
Treasury Fund 22,626,298 19,318,524 13,886,919 8,530,115 7,285,996
5,244,250 0
9,896,725 9,537,113
6,879,101

<CAPTION>
ADVISORY
FEE SHAREHOLDER
ADVISORY FEE REDUCTION ADMINISTRATIVE
FEE SERVICES FEE
FOR THE YEAR ENDED
JANUARY 31 1999 1998 1997 1999 1998
1997 1999
<S> <C> <C> <C> <C> <C>
<C> <C>
Municipal Fund $ 803,037 $ 447,960 $ 76,352 $ 302,822 $ 190,864 $
19,609 $0
636,478 447,960
76,352
Prime Cash Fund 4,676,382 3,485,448 911,504 1,762,996 1,315,415
30,284 $0
2,853,923 2,107,753
505,519
Prime Value Fund 3,264,534 1,821,778 202,835 1,230,729 687,478
78,894 $0
2,420,288 1,553,105
166,441

<CAPTION>
ADVISORY
FEE SHAREHOLDER
ADVISORY FEE REDUCTION ADMINISTRATIVE
FEE SERVICES FEE
FOR THE PERIOD ENDED
JULY 31 1999 1999 2 1999
2
<S> <C>
<C> <C>
Municipal Fund $ 516,311 $
194,649 $0

446,031
Prime Cash Fund 3,622,592
1,365,717 0

2,260,468
Prime Value Fund 2,380,186
897,330 0

1,769,715
</TABLE>

1 Federated Investment Management Company, formerly Federated Management, became
the Fund's investment adviser on November 15, 1996. Prior to November 15, 1996,
Lehman Brothers Global Asset Management served as the
Fund's investment adviser.

2 The Fund has changed its fiscal year-end from January 31 to July 31.

For the fiscal years ended January 31, 1999, 1998 and 1997, fees paid by the
Municipal Fund, the Prime Cash Fund and the Prime Value Fund for services are
prior to the Funds' reorganization as portfolios of the Trust on November 1,
1999.

Fees are allocated among classes based on their pro rata share of Fund assets,
except for shareholder services fees, which are borne only by the applicable
class of Shares.

How Do the Funds Measure Performance?

The Funds may advertise Share performance by using the SEC standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non-standard
performance information.

The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Funds' or any class of Shares'
expenses; and various other factors.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns are given for the one-year, five-year or Start of Performance
periods ended July 31, 1999.

Yield, Effective Yield and Tax-Equivalent Yield are given for the 7-day period
ended July 31, 1999.

Performance of the Municipal Fund, the Prime Cash Fund and the Prime Value Fund
shown are prior to the Funds' reorganization as portfolios of the Trust on
November 1, 1999.

<TABLE>
<CAPTION>
START OF PERFORMANCE
GOVERNMENT FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON MARCH 30, 1990
<S> <C> <C> <C> <C>
Total Return - 5.04% 5.44% 5.19%
Yield 4.92% - - -
Effective Yield 5.04% - - -

<CAPTION>
START OF PERFORMANCE
GOVERNMENT TAX-MANAGED FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON JUNE 2, 1995
<S> <C> <C> <C> <C>
Total Return - 5.00% - 5.36%
Yield 4.85% - - -
Effective Yield 4.97% - - -

<CAPTION>
START OF PERFORMANCE
MUNICIPAL FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON FEBRUARY 8, 1993
<S> <C> <C> <C> <C>
Total Return - 3.35% 3.63% 3.38%
Yield 3.22% - - -
Effective Yield 3.28% - - -
Tax-Equivalent Yield 5.33% - - -

<CAPTION>
START OF PERFORMANCE
PRIME FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON MARCH 26, 1990
<S> <C> <C> <C> <C>
Total Return - 5.14% 5.49% 5.25%
Yield 5.01% - - -
Effective Yield 5.13% - - -

<CAPTION>
START OF PERFORMANCE
PRIME CASH FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON FEBRUARY 8, 1993
<S> <C> <C> <C> <C>
Total Return - 5.15% 5.52% 5.04%
Yield 4.96% - - -
Effective Yield 5.09% - - -

<CAPTION>
START OF PERFORMANCE
PRIME VALUE FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON FEBRUARY 8, 1993
<S> <C> <C> <C> <C>
Total Return - 5.19% 5.56% 5.08%
Yield 4.99% - - -
Effective Yield 5.12% - - -

<CAPTION>
START OF PERFORMANCE
TAX-FREE FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON DECEMBER 12, 1989
<S> <C> <C> <C> <C>
Total Return - 3.14% 3.47% 3.62%
Yield 3.00% - - -
Effective Yield 3.05% - - -
Tax-Equivalent Yield 4.97% - - -

<CAPTION>
START OF PERFORMANCE
TREASURY FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON DECEMBER 12, 1989
<S> <C> <C> <C> <C>
Total Return - 4.91% 5.37% 5.20%
Yield 4.79% - - -
Effective Yield 4.91% - - -
</TABLE>

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.

The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.

YIELD, EFFECTIVE YIELD AND TAX-EQUIVALENT YIELD

The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
Share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional Shares purchased with
dividends earned from the original one Share and all dividends declared on the
original and any purchased Shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base-period return; and multiplying the base-period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result. The tax-equivalent yield
of Shares is calculated similarly to the yield, but is adjusted to reflect the
taxable yield that Shares would have had to earn to equal the actual yield,
assuming a specific tax rate.

To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.

TAX EQUIVALENCY TABLE

With regard to the Municipal Fund and the Tax-Free Fund, set forth below is a
sample of a tax-equivalency table that may be used in advertising and sales
literature. This table is for illustrative purposes only and is not
representative of past or future performance of the Municipal Fund or the
Tax-Free Fund. The interest earned by the municipal securities owned by the
Municipal Fund or the Tax-Free Fund generally remains free from federal regular
income tax and is often free from state and local taxes as well. However, some
of the Municipal Fund's and the Tax-Free Fund's income may be subject to the
federal alternative minimum tax and state and/or local taxes.

TAX EQUIVALENCY TABLE

<TABLE>
<CAPTION>
TAXABLE YIELD
EQUIVALENT
FOR 1999
MULTISTATE
MUNICIPAL
FUND
FEDERAL INCOME
TAX
BRACKET: 15.00% 28.00% 31.00% 36.00%
39.60%
<S> <C> <C> <C> <C>
<C>
Joint Return $1-43,050 $43,051-104,050 $104,051-158,550 $158,551-283,150
OVER $283,150
Single Return $1-25,750 $25,751-62,450 $62,451-130,250 $130,251-283,150
OVER $283,150
TAX-EXEMPT YIELD: TAXABLE YIELD EQUIVALENT:
1.00% 1.18% 1.39% 1.45% 1.56%
1.66%
1.50% 1.76% 2.08% 2.17% 2.34%
2.48%
2.00% 2.35% 2.78% 2.90% 3.13%
3.31%
2.50% 2.94% 3.47% 3.62% 3.91%
4.14%
3.00% 3.53% 4.17% 4.35% 4.69%
4.97%
3.50% 4.12% 4.86% 5.07% 5.47%
5.79%
4.00% 4.71% 5.56% 5.80% 6.25%
6.62%
4.50% 5.29% 6.25% 6.52% 7.03%
7.45%
5.00% 5.88% 6.94% 7.25% 7.81%
8.28%
5.50% 6.47% 7.64% 7.97% 8.59%
9.11%
6.00% 7.06% 8.33% 8.70% 9.38%
9.93%
6.50% 7.65% 9.03% 9.42% 10.16%
10.76%
7.00% 8.24% 9.72% 10.14% 10.94%
11.59%
7.50% 8.82% 10.42% 10.87% 11.72%
12.42%
8.00% 9.41% 11.11% 11.59% 12.50%
13.25%
</TABLE>

Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

* charts, graphs and illustrations using the Funds' returns, or returns in
general, that demonstrate investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment;

* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Funds; and

* information about the mutual fund industry from sources such as the Investment
Company Institute.

The Funds may compare their performance, or performance for the types of
securities in which they invest, to a variety of other investments, including
federally insured bank products such as bank savings accounts, certificates of
deposit, and Treasury bills.

The Funds may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Funds use in advertising may include:

LIPPER ANALYTICAL SERVICES, INC.

Lipper Analytical Services, Inc., ranks funds in various fund categories based
on total return, which assumes the reinvestment of all income dividends and
capital gains distributions, if any.

IBC/DONOGHUE'S MONEY FUND REPORT

IBC/Donoghue's Money Fund Report, publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.

MONEY

Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.

SALOMON 30-DAY CD INDEX

Salomon 30-Day CD Index compares rate levels of 30-day certificates of deposit
from the top 10 prime representative banks.

SALOMON 30-DAY TREASURY BILL INDEX

Salomon 30-Day Treasury Bill Index is a weekly quote of the most representative
yields for selected securities, issued by the U.S. Treasury, maturing in 30
days.

DISCOUNT CORPORATION OF NEW YORK 30-DAY FEDERAL AGENCIES

Discount Corporationof New York 30-Day Federal Agencies is a weekly quote of the
average daily offering price for selected federal agency issues maturing in 30
days.

BANK RATE MONITOR(C) NATIONAL INDEX

Bank Rate Monitor(C) National Index, published weekly, is an average of the
interest rates of personal money market deposit accounts at ten of the largest
banks and thrifts in each of the five largest Standard Metropolitan Statistical
Areas. If more than one rate is offered, the lowest rate is used. Account
minimums and compounding methods may vary.

Who is Federated Investors, Inc.?

Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.

Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state- of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.

FEDERATED FUNDS OVERVIEW

MUNICIPAL FUNDS

In the municipal sector, as of December 31, 1998, Federated managed 10 bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.

EQUITY FUNDS

In the equity sector, Federated has more than 28 years' experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value- oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.

CORPORATE BOND FUNDS

In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making-based on
intensive, diligent credit analysis-is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.

GOVERNMENT FUNDS

In the government sector, as of December 31, 1998, Federated managed 9 mortgage
backed, 5 government/agency and 19 government money market mutual funds, with
assets approximating $5.3 billion, $1.8 billion and $41.6 billion, respectively.
Federated trades approximately $425 million in U.S. government and mortgage
backed securities daily and places approximately $25 billion in repurchase
agreements each day. Federated introduced the first U.S. government fund to
invest in U.S. government bond securities in 1969. Federated has been a major
force in the short- and intermediate-term government markets since 1982 and
currently manages approximately $43.2 billion in government funds within these
maturity ranges.

MONEY MARKET FUNDS

In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $76.7 billion in assets across 52 money market
funds, including 19 government, 9 prime and 23 municipal with assets
approximating $41.6 billion, $22.8 billion and $12.5 billion, respectively.

The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield-
J. Thomas Madden; U.S. fixed income-William D. Dawson, III; and global
equities and fixed income-Henry A. Frantzen. The Chief Investment Officers
are Executive Vice Presidents of the Federated advisory companies.

MUTUAL FUND MARKET

Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.

FEDERATED CLIENTS OVERVIEW

Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

INSTITUTIONAL CLIENTS

Federated meets the needs of approximately 900 institutional clients nationwide
by managing and servicing separate accounts and mutual funds for a variety of
purposes, including defined benefit and defined contribution programs, cash
management, and asset/liability management. Institutional clients include
corporations, pension funds, tax exempt entities, foundations/endowments,
insurance companies, and investment and financial advisers. The marketing effort
to these institutional clients is headed by John B. Fisher, President,
Institutional Sales Division, Federated Securities Corp.

BANK MARKETING

Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.

BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES

Federated Funds are available to consumers through major brokerage firms
nationwide-we have over 2,200 broker/dealer and bank broker/dealer relationships
across the country-supported by more wholesalers than any other mutual fund
distributor. Federated's service to financial professionals and institutions has
earned it high ratings in several surveys performed by DALBAR, Inc. DALBAR is
recognized as the industry benchmark for service quality measurement. The
marketing effort to these firms is headed by James F. Getz, President,
Broker/Dealer Sales Division, Federated Securities Corp.

Financial Information

The Financial Statements for the Funds for the fiscal year ended July 31, 1999
are incorporated herein by reference to the Annual Reports to Shareholders of
the Funds dated July 31, 1999.

Investment Ratings

STANDARD & POOR'S SHORT-TERM MUNICIPAL OBLIGATION RATINGS

An S&P note rating reflects the liquidity concerns and market access risks
unique to notes.

SP-1-Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
sign (+) designation.

SP-2-Satisfactory capacity to pay principal and interest.

VARIABLE RATE DEMAND NOTES AND TENDER OPTION BONDS RATINGS

S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)

COMMERCIAL PAPER RATINGS

An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.

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-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.

LONG-TERM DEBT RATINGS

Aaa-Debt rated AAA has the highest rating assigned by S&P. 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.

MOODY'S INVESTORS SERVICE SHORT-TERM MUNICIPAL OBLIGATION RATINGS

Moody's short-term ratings are designated Moody's Investment Grade (MIG or
VMIG). (See below.) The purpose of the MIG or VMIG ratings is to provide
investors with a simple system by which the relative investment qualities of
short-term obligations may be evaluated.

MIG1-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.

MIG2-This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.

VARIABLE RATE DEMAND NOTES AND TENDER OPTION BONDS RATINGS

Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity. In this case, two ratings are usually assigned, (for example,
Aaa/VMIG-1); the first representing an evaluation of the degree of risk
associated with scheduled principal and interest payments, and the second
representing an evaluation of the degree of risk associated with the demand
feature. The VMIG rating can be assigned a 1 or 2 designation using the same
definitions described above for the MIG rating.

COMMERCIAL PAPER RATINGS

P-1-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: leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earning coverage of fixed financial
charges and high internal cash generation, well-established access to a range of
financial markets and assured sources of alternate liquidity.

P-2-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.

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 risks 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 sometime in the future.

NR-Indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.

NR(1)-The underlying issuer/obligor/guarantor has other outstanding debt rated
AAA by S&P or Aaa by Moody's.

NR(2)-The underlying issuer/obligor/guarantor has other outstanding debt rated
AA by S&P or Aa by Moody's.

NR(3)-The underlying issuer/obligor/guarantor has other outstanding debt rated A
by S&P or Moody's.

FITCH IBCA, INC. SHORT-TERM DEBT RATING DEFINITIONS

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
for timely payment, only slightly less in degree than issues rated F-1+.

F-2-Good Credit Quality. Issues carrying 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.

Addresses

MONEY MARKET OBLIGATIONS TRUST

Government Obligations Fund

Government Obligations Tax-Managed Fund

Municipal Obligations Fund

Prime Obligations Fund

Prime Cash Obligations Fund

Prime Value Obligations Fund

Tax-Free Obligations Fund

Treasury Obligations Fund

Institutional Shares

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

DISTRIBUTOR

Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP
225 Franklin Street
Boston, MA 02110-2812

INDEPENDENT AUDITORS

Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

PROSPECTUS
Money Market Obligations Trust
Government Obligations Fund
Government Obligations Tax-Managed Fund

Municipal Obligations Fund

Prime Obligations Fund

Prime Cash Obligations Fund
Prime Value Obligations Fund

Tax-Free Obligations Fund
Treasury Obligations Fund

INSTITUTIONAL SERVICE SHARES

OCTOBER 31, 1999

CONTENTS

Risk/Return Summary 1

What are Each Fund's Fees and Expenses? 11

What are Each Fund's Investment Strategies? 15

What are the Principal Securities

in Which the Funds Invest? 16

What are the Specific Risks of Investing in the Funds? 19

What Do Shares Cost? 20

How are the Funds Sold? 20

How to Purchase Shares 21

How to Redeem Shares 22

Account and Share Information 24

Who Manages the Funds? 25

Financial Information 26

Risk/Return Summary

WHAT IS EACH FUND'S INVESTMENT OBJECTIVE?

Each Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per Share.

<TABLE>

FUND OBJECTIVE
<S> <C>
Government Obligations Fund
(Government Fund) To provide current income consistent with
stability of principal.
Government Obligations
Tax-Managed Fund
(Government
Tax-Managed Fund) To provide current income consistent with
stability of principal and liquidity.
Municipal Obligations Fund
(Municipal Fund) To provide current income exempt from all
federal regular income tax consistent with
stability of principal.
Prime Obligations Fund
(Prime Fund) To provide current income consistent with
stability of principal.
Prime Cash Obligations Fund
(Prime Cash Fund) To provide current income consistent
with stability of principal and liquidity.
Prime Value Obligations Fund
(Prime Value Fund) To provide current income consistent
with stability of principal and liquidity.
Tax-Free Obligations Fund
(Tax-Free Fund) To provide dividend income exempt from
federal regular income tax consistent with
stability of principal.
Treasury Obligations Fund
(Treasury Fund) To provide current income consistent with
stability of principal.
</TABLE>

While there is no assurance that a Fund will achieve its investment objective,
it endeavors to do so by following the strategies and policies described in this
prospectus.

The investment objective of the Municipal Fund, the Prime Cash Fund and the
Prime Value Fund may be changed by the Funds' Trustees without shareholder
approval.

WHAT ARE EACH FUND'S MAIN INVESTMENT STRATEGIES?

Each of the Funds invests in a portfolio of securities maturing in 397 days or
less. The portfolio of each Fund will have a dollar-weighted maturity of 90 days
or less.

GOVERNMENT FUND

The Government Fund invests primarily in U.S. Treasury and agency securities,
including repurchase agreements collateralized fully by U.S. Treasury and agency
securities.

GOVERNMENT TAX-MANAGED FUND

The Government Tax-Managed Fund invests primarily in U.S. Treasury and agency
securities that pay interest exempt from state personal income tax.

MUNICIPAL FUND

PRIME FUND

The Prime Fund invests primarily in high quality fixed income securities issued
by banks, corporations and the U.S. government.

PRIME CASH FUND

The Prime Cash Fund invests primarily in high quality fixed income securities
issued by banks, corporations and the U.S. government.

PRIME VALUE FUND

The Prime Value Fund invests primarily in high quality fixed income securities
issued by banks, corporations and the U.S. government.

TAX-FREE FUND

The Tax-Free Fund invests primarily in high quality, tax exempt securities. At
least 80% of the Tax-Free Fund's annual interest income will be exempt from
federal regular income tax. Interest from the Tax- Free Fund's investments may
be subject to AMT.

TREASURY FUND

The Treasury Fund invests primarily in U.S. Treasury securities, including
repurchase agreements collateralized fully by U.S. Treasury securities.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUNDS?

RISK/RETURN BAR CHART AND TABLE

[Graphic]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Service
Shares total returns on a calendar year-end basis.

The Fund's Institutional Service Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.

The Fund's Institutional Service Shares total return for the nine-month period
from January 1, 1999 to September 30, 1999 was 3.48%.

Within the periods shown in the Chart, the Fund's Institutional Service Shares
highest quarterly return was 1.43% (quarter ended June 30, 1995). Its lowest
quarterly return was 1.19% (quarter ended December 31, 1998).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Service Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.19%
Start of Performance 1 5.23%

1 The Fund's Institutional Service Shares start of performance date was July 5,
1994.

The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1998
was 4.66%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

The Fund's Institutional Service Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.

The Fund's Institutional Service Shares total return for the nine-month period
from January 1, 1999 to September 30, 1999 was 3.45%.

Within the periods shown in the Chart, the Fund's Institutional Service Shares
highest quarterly return was 1.30% (quarter ended December 31, 1997). Its lowest
quarterly return was 1.19% (quarter ended December 31, 1998).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Service Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.11%
Start of Performance 1 5.18%

1 The Fund's Institutional Service Shares start of performance date was May 30,
1995.

The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1998
was 4.69%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Service Shares of Municipal Obligations Fund (the "Former
Fund") prior to its reorganization into the Municipal Obligations Fund, which is
a newly created portfolio of Money Market Obligations Trust. On the date of the
reorganization, November 1, 1999, the Former Fund will be dissolved and its net
assets (inclusive of liabilities recorded on the Former Fund's records) will be
transferred to the Municipal Obligations Fund.

[Graphic]

Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's
Institutional Service Shares total returns on a calendar year-end basis.

The Former Fund's Institutional Service Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Service Shares total return for the nine-month
period from January 1, 1999 to September 30, 1999 was 2.25%.

Within the periods shown in the Chart, the Former Fund's Institutional Service
Shares highest quarterly return was 0.98% (quarter ended June 30, 1995). Its
lowest quarterly return was 0.53% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Former Fund's Institutional Service
Shares Average Annual Total Returns for the calendar periods ended
December 31, 1998.

CALENDAR PERIOD FUND
1 Year 3.30%
5 Years 3.29%
Start of Performance 1 3.14%

1 The Former Fund's Institutional Service Shares start of performance date was
February 8, 1993.

The Former Fund's Institutional Service Shares 7-Day Net Yield as of December
31, 1998 was 3.52%. Investors may call the Fund at 1-800-341-7400 to acquire the
current 7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

The Fund's Institutional Service Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.

The Fund's Institutional Service Shares total return for the nine-month period
from January 1, 1999 to September 30, 1999 was 3.54%.

Within the periods shown in the Chart, the Fund's Institutional Service Shares
highest quarterly return was 1.44% (quarter ended June 30, 1995). Its lowest
quarterly return was 1.24% (quarter ended December 31, 1998).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Service Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.26%
Start of Performance 1 5.28%

1 The Fund's Institutional Service Shares start of performance date was July 5,
1994.

The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1998
was 4.82%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Service Shares of Prime Cash Obligations Fund (the "Former
Fund") prior to its reorganization into the Prime Cash Obligations Fund, which
is a newly created portfolio of Money Market Obligations Trust. On the date of
the reorganization, November 1, 1999, the Former Fund will be dissolved and its
net assets (inclusive of liabilities recorded on the Former Fund's records) will
be transferred to the Prime Cash Obligations Fund.

[Graphic]

The Former Fund's Institutional Service Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Service Shares total return for the nine-month
period from January 1, 1999 to September 30, 1999 was 3.55%.

Within the periods shown in the Chart, the Former Fund's Institutional Service
Shares highest quarterly return was 1.46% (quarter ended June 30, 1995). Its
lowest quarterly return was 0.75% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Former Fund's Institutional Service
Shares Average Annual Total Returns for the calendar periods ended
December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.29%
5 Years 5.12%
Start of Performance 1 4.98%

1 The Former Fund's Institutional Service Shares start of performance date was
September 2, 1993.

The Former Fund's Institutional Service Shares 7-Day Net Yield as of December
31, 1998 was 4.85%. Investors may call the Fund at 1-800-341-7400 to acquire the
current 7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Service Shares of Prime Value Obligations Fund (the "Former
Fund") prior to its reorganization into the Prime Value Obligations Fund, which
is a newly created portfolio of Money Market Obligations Trust. On the date of
the reorganization, November 1, 1999, the Former Fund will be dissolved and its
net assets (inclusive of liabilities recorded on the Former Fund's records) will
be transferred to the Prime Value Obligations Fund.

[Graphic]

The Former Fund's Institutional Service Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Service Shares total return for the nine-month
period from January 1, 1999 to September 30, 1999 was 3.57%.

Within the periods shown in the Chart, the Former Fund's Institutional Service
Shares highest quarterly return was 1.47% (quarter ended June 30, 1995). Its
lowest quarterly return was 0.76% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Former Fund's Institutional Service
Shares Average Annual Total Returns for the calendar periods ended
December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.32%
5 Years 5.15%
Start of Performance 1 5.02%

1 The Former Fund's Institutional Service Shares start of performance date was
September 1, 1993.

The Former Fund's Institutional Service Shares 7-Day Net Yield as of December
31, 1998 was 4.90%. Investors may call the Fund at 1-800-341-7400 to acquire the
current 7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

The Fund's Institutional Service Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.

The Fund's Institutional Service Shares total return for the nine-month period
from January 1, 1999 to September 30, 1999 was 2.09%.

Within the periods shown in the Chart, the Fund's Institutional Service Shares
highest quarterly return was 0.94% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.73% (quarter ended March 31, 1997).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Service Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 3.12%
Start of Performance 1 3.25%

1 The Fund's Institutional Service Shares start of performance date was July 5,
1994.

The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1998
was 3.33%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

The Fund's Institutional Service Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.

The Fund's Institutional Service Shares total return for the nine-month period
from January 1, 1999 to September 30, 1999 was 3.37%.

Within the periods shown in the Chart, the Fund's Institutional Service Shares
highest quarterly return was 1.42% (quarter ended June 30, 1995). Its lowest
quarterly return was 1.15% (quarter ended December 31, 1998).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Service Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 5.11%
Start of Performance 1 5.17%

1 The Fund's Institutional Service Shares start of performance date was July 5,
1994.

The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1998
was 4.50%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

What are Each Fund's Fees and Expenses?

MONEY MARKET OBLIGATIONS TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Service Shares of Government Obligations Fund and
Government Obligations Tax-Managed Fund.

<TABLE>
<CAPTION>
GOVERNMENT
GOVERNMENT OBLIGATIONS
OBLIGATIONS TAX-MANAGED
SHAREHOLDER FEES FUND FUND
<S> <C> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of offering price) None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds,
as applicable) None None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions)
(as a percentage of
offering price) None None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None None
Exchange Fee None None

ANNUAL FUND OPERATING EXPENSES (Before Waivers) 1 Expenses That are Deducted
From Fund Assets (as a percentage of average net assets)
Management Fee 2 0.20% 0.20%
Distribution (12b-1) Fee None None
Shareholder Services Fee 0.25% 0.25%
Other Expenses 0.09% 0.10%
Total Annual Fund
Operating Expenses 0.54% 0.55%
1 Although not contractually obligated to do so, the adviser waived
certain amounts. These amounts are shown below along with the net
expenses the Funds actually paid for the fiscal year ended July 31, 1999.
Total Waiver of Fund
Expenses 0.09% 0.10%
Total Actual Annual Fund
Operating Expenses (after
waivers) 0.45% 0.45% 2 The adviser voluntarily waived a portion of the
management fee. The adviser can terminate this voluntary waiver at any time. The
management fee paid by Government Obligations Fund and Government Obligations
Tax-Managed Fund (after the voluntary waiver) was 0.11% and 0.10%, respectively,
for the fiscal year ended July 31, 1999.

</TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Funds'
Institutional Service Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Funds' Institutional Service
Shares for the time periods indicated and then redeem all of your Shares at the
end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Funds' Institutional Service Shares operating
expenses are BEFORE WAIVERS as shown in the table and remain the same. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Government Obligations Fund $55 $173 $302 $677
Government Obligations Tax-Managed Fund $56 $176 $307 $689

MONEY MARKET OBLIGATIONS TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Service Shares of Prime Obligations Fund, Tax-Free
Obligations Fund and Treasury Obligations Fund.

<TABLE>
<CAPTION>
PRIME TAX-FREE TREASURY
OBLIGATIONS OBLIGATIONS OBLIGATIONS
SHAREHOLDER FEES FUND FUND FUND
<S> <C> <C> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of
offering price) None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase
price or redemption
proceeds, as applicable) None None None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions) (as a
percentage of offering
price) None None None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None None None
Exchange Fee None None None

EXAMPLE

This Example is intended to help you compare the cost of investing in the Funds'
Institutional Service Shares with the cost of investing in other mutual funds.

FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Prime Obligations Fund $56 $176 $307 $689
Tax-Free Obligations Fund $56 $176 $307 $689
Treasury Obligations Fund $55 $173 $302 $677

MONEY MARKET OBLIGATIONS TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Service Shares of Municipal Obligations Fund, Prime Cash
Obligations Fund and Prime Value Obligations Fund.

<TABLE>
<CAPTION>
PRIME PRIME
MUNICIPAL CASH VALUE
OBLIGATIONS OBLIGATIONS OBLIGATIONS
SHAREHOLDER FEES FUND FUND FUND
<S> <C> <C> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage
of offering price) None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase
price or redemption
proceeds, as applicable) None None None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions) (as a
percentage of offering
price) None None None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None None None
Exchange Fee None None None

ANNUAL FUND OPERATING
EXPENSES (Before Waivers)
1
Expenses That are Deducted
From Fund Assets (as a
percentage of average net
assets)
Management Fee 2 0.20% 0.20% 0.20%
Distribution (12b-1) Fee None None None
Shareholder Services Fee 0.25% 0.25% 0.25%
Other Expenses 0.16% 0.11% 0.11%
Total Annual Fund
Operating Expenses 3 0.61% 0.56% 0.56%
1 Although not contractually obligated to do so, the adviser expects to
waive certain amounts. These are shown below along with the net expenses the
Funds expect to pay for the fiscal year ending July 31, 2000.
Total Waiver of Fund
Expenses 0.18% 0.13% 0.15%
Total Actual Annual Fund
Operating Expenses (after
waivers) 0.43% 0.43% 0.41% 2 The adviser expects to voluntarily waive a portion
of the management fee. The adviser can terminate this anticipated voluntary
waiver at any time. The management fee paid by Municipal Obligations Fund, Prime
Cash Obligations Fund and Prime Value Obligations Fund (after the anticipated
voluntary waiver) is expected to be 0.02%, 0.07%, and 0.05%, respectively, for
the fiscal year ending July 31, 2000. 3 For the fiscal year ended January 31,
1999, prior to the reorganization of Municipal Obligations Fund, Prime Cash
Obligations Fund and Prime Value Obligations Fund, the Former Funds, as
portfolios of Money Market Obligations Trust, had Total Annual Fund Operating
Expenses and Total Actual Annual Fund Operating Expenses (after waivers) of
0.61% and 0.43%, 0.56% and 0.43% and 0.56% and 0.41%, respectively. </TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Funds'
Institutional Service Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Funds' Institutional Service
Shares for the time periods indicated and then redeem all of your Shares at the
end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Funds' Institutional Service Shares operating
expenses are BEFORE WAIVERS as estimated above in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Municipal Obligations Fund $62 $195 $340 $762
Prime Cash Obligations Fund $57 $179 $313 $701
Prime Value Obligations Fund $57 $179 $313 $701

What are Each Fund's Investment Strategies?

Each Fund's investment strategy is described earlier under "What are Each Fund's
Main Investment Strategies?" Following is additional information on the
investment strategies for the Funds.

* current U.S. economic activity and the economic outlook;

* current short-term interest rates;

* the Federal Reserve Board's policies regarding short-term interest
rates; and

* the potential effects of foreign economic activity on U.S. short-term
interest rates.

MUNICIPAL FUND, PRIME FUND, PRIME CASH FUND, PRIME VALUE FUND AND TAX-FREE
FUND

MUNICIPAL FUND AND TAX-FREE FUND

INDUSTRY CONCENTRATION

TEMPORARY DEFENSIVE INVESTMENTS

What are the Principal Securities in Which the Funds Invest?

GOVERNMENT FUND

The Government Fund invests primarily in fixed income securities, including U.S.
Treasury securities, agency securities and repurchase agreements.

GOVERNMENT TAX-MANAGED FUND

The Government Tax-Managed Fund invests primarily in fixed income securities,
including U.S. Treasury securities and agency securities.

MUNICIPAL FUND

PRIME FUND

PRIME CASH FUND

PRIME VALUE FUND

TAX-FREE FUND

TREASURY FUND

The Treasury Fund invests primarily in fixed income securities, including U.S.
Treasury securities and repurchase agreements.

FIXED INCOME SECURITIES

U.S. TREASURY SECURITIES

U.S. Treasury securities are direct obligations of the federal government
of the United States.

AGENCY SECURITIES

CORPORATE DEBT SECURITIES

COMMERCIAL PAPER

DEMAND INSTRUMENTS

BANK INSTRUMENTS

ASSET BACKED SECURITIES

Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than 10 years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes or pass through certificates.

TAX EXEMPT SECURITIES

VARIABLE RATE DEMAND INSTRUMENTS

MUNICIPAL NOTES

CREDIT ENHANCEMENT

REPURCHASE AGREEMENTS

Repurchase agreements are subject to credit risks.

INVESTMENT RATINGS

What are the Specific Risks of Investing in the Funds?

INTERESTS RATE RISKS

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISKS

MUNICIPAL FUND, PRIME FUND, PRIME CASH FUND, PRIME VALUE FUND AND
TAX-FREE FUND

GOVERNMENT FUND, PRIME FUND, PRIME CASH FUND, PRIME VALUE FUND AND
TREASURY FUND

SECTOR RISKS

What Do Shares Cost?

The required minimum initial investment for each Fund is $1,000,000. There is no
required minimum subsequent investment amount.

How are the Funds Sold?

The Funds offer three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Service
Shares. Each share class has different expenses, which affect their performance.
Contact your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

The Funds' Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to financial institutions, financial intermediaries and
institutional investors, or to individuals, directly or through investment
professionals. The Municipal Fund and the Tax-Free Fund may not be a suitable
investment for retirement plans because they invest in municipal securities.

How to Purchase Shares

You may purchase Shares through an investment professional or directly from the
Funds. The Funds reserve the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

* Establish an account with the investment professional; and

* Submit your purchase order for Shares of the

Government Fund, the Prime Fund and the Treasury Fund to the investment
professional before 5:00 p.m. (Eastern time). You will receive that day's
dividend if the investment professional forwards the order to the Fund and the
Fund receives payment by 5:00 p.m. (Eastern time). You will become the owner of
Shares and receive dividends when the Fund receives your payment.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUNDS

* Establish your account with a Fund by submitting a completed New Account
Form; and

* Send your payment to the Fund by Federal Reserve wire or check.

You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees incurred by the Fund or Federated
Shareholder Services Company, the Funds' transfer agent.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

BY WIRE

Send your wire to:

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

BY INVEST-BY-PHONE

BY AUTOMATED CLEARING HOUSE

How to Redeem Shares

You should redeem Shares:

* through an investment professional if you purchased Shares through an
investment professional; or

* directly from a Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUNDS

BY TELEPHONE

You may redeem Shares by calling a Fund at 1-800-341-7400 once you have
completed the appropriate authorization form for telephone transactions. If you
call before 12:00 noon (Eastern time) with respect to the Municipal Fund and the
Tax-Free Fund, 2:00 p.m. (Eastern time) with respect to the Government
Tax-Managed Fund, 3:00 p.m. (Eastern time) with respect to the Prime Cash Fund
and the Prime Value Fund and 5:00 p.m. (Eastern time) with respect to the
Government Fund, the Prime Fund and the Treasury Fund, your redemption will be
wired to you the same day. You will not receive that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to a Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

* Fund Name and Share Class, account number and account registration; * amount
to be redeemed; and * signatures of all shareholders exactly as registered.

Call your investment professional or the Funds if you need special instructions.

SIGNATURE GUARANTEES

Signatures must be guaranteed if:

* your redemption will be sent to an address other than the address of record; *
your redemption will be sent to an address of record that was changed within the
last 30 days; or * a redemption is payable to someone other than the
shareholder(s) of record.

PAYMENT METHODS FOR REDEMPTIONS

* an electronic transfer to your account at a financial institution that is
an ACH member; or

* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

REDEMPTION IN KIND

Although each Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

* to allow your purchase to clear;

* during periods of market volatility; or

* when a shareholder's trade activity or amount adversely impacts a Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from a Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Funds will record your telephone instructions. If a Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

Account and Share Information

ACCOUNT ACTIVITY

You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.

Who Manages the Funds?

ADVISORY FEES

YEAR 2000 READINESS

Financial Information

FINANCIAL HIGHLIGHTS

This information has been audited by Arthur Andersen LLP and Ernst & Young LLP,
whose reports, along with each Fund's audited financial statements, are included
in the Annual Reports.

Financial Highlights-Government Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997 1996 1995 1
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.05
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 2 4.78% 5.33% 5.16% 5.29% 5.31%

RATIOS TO AVERAGE NET ASSETS:
Expenses 3 0.54% 0.55% 0.55% 0.56% 0.60% 4
Net investment income 3 4.58% 5.13% 4.96% 5.03% 5.48% 4
Expenses (after waivers) 0.45% 0.45% 0.45% 0.45% 0.45% 4
Net investment income (after waivers) 4.67% 5.23% 5.06% 5.14% 5.63% 4
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $2,087,254 $1,672,417 $936,869 $702,274 $339,105

</TABLE>

1 Reflects operations for the period from August 1, 1994 (date of initial public
investment) to July 31, 1995. For the period from the Institutional Service
Shares' effective date (July 5, 1994) to July 31, 1994, all net investment
income was distributed to the Fund's Adviser.

2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

3 During the period, certain fees were voluntarily waived. If such voluntarily
waivers had not occurred, the ratios would have been as indicated.

4 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Government Obligations Tax-Managed Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997 1996 1995 1
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.01
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 2 4.74% 5.23% 5.09% 5.23% 0.95%

RATIOS TO AVERAGE NET ASSETS:
Expenses 3 0.55% 0.57% 0.58% 0.61% 0.85% 4
Net investment income 3 4.53% 4.99% 4.84% 4.81% 5.15% 4
Expense (after waivers) 0.45% 0.45% 0.45% 0.42% 0.45% 4
Net investment income (after waivers) 4.63% 5.11% 4.97% 5.00% 5.55% 4
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $1,329,556 $830,652 $421,095 $322,698 $76,165

</TABLE>

1 Reflects operations for the period from May 30, 1995 (date of initial public
investment) to July 31, 1995.

2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

3 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

4 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Municipal Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
PERIOD
ENDED JULY 31, YEAR ENDED JANUARY 31,
1999 1 1999 1998 1997 2
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.01 0.03 0.03 0.03
LESS DISTRIBUTIONS:
Distributions from net investment income (0.01) (0.03) (0.03) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 3 1.47% 3.27% 3.43% 3.31%

RATIOS TO AVERAGE NET ASSETS:
Expenses 4 0.61% 5 0.59% 0.66% 0.64%
Net investment income 4 2.80% 5 3.06% 3.25% 2.87%
Expenses (after waivers) 0.43% 5 0.43% 0.43% 0.43%
Net investment income (after waivers) 2.98% 5 3.22% 3.48% 3.08%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $106,684 $67,832 $41,216 $0.30

</TABLE>

1 The Fund has changed its fiscal year-end from January 31 to July 31.

3 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

4 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

5 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Prime Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.05
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 4.88% 5.37% 5.19% 5.32% 5.38%

RATIOS TO AVERAGE NET ASSETS:
Expenses 2 0.55% 0.55% 0.56% 0.56% 0.58%
Net investment income 2 4.67% 5.14% 5.00% 5.02% 5.53%
Expenses (after waivers) 0.45% 0.45% 0.45% 0.45% 0.45%
Net investment income (after waivers) 4.77% 5.24% 5.11% 5.13% 5.66%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $4,215,510 $3,468,222 $2,236,997 $1,297,019 $500,954

</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Prime Cash Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED JANUARY 31,
1999 1 1999 1998 1997 2 1996
1995
<S> <C> <C> <C> <C> <C>
<C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income 0.02 0.05 0.05 0.05 0.06
0.04
LESS DISTRIBUTIONS:
Distributions from net
investment income (0.02) (0.05) (0.05) (0.05) (0.06)
(0.04)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
TOTAL RETURN 3 2.29% 5.23% 5.34% 5.11% 5.83%
4.21%

RATIOS TO AVERAGE NET ASSETS:
Expenses 4 0.56% 5 0.55% 0.55% 0.57% 0.50%
0.50%
Net investment income 4 4.50% 5 4.97% 5.17% 4.88% 5.57%
3.92%
Expenses (after waivers) 0.43% 5 0.43% 0.43% 0.43% 0.42%
0.37%
Net investment income (after waivers) 4.63% 5 5.09% 5.29% 5.02% 5.65%
4.05%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $957,998 $894,851 $668,665 $412,762 $324,474
$342,673

</TABLE>

1 The Fund has changed its fiscal year-end from January 31 to July 31.

3 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

4 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

5 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Prime Value Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED JANUARY 31,
1999 1 1999 1998 1997 2 1996
1995
<S> <C> <C> <C> <C> <C>
<C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02 0.05 0.05 0.05 0.06
0.04
LESS DISTRIBUTIONS:
Distributions from net investment income (0.02) (0.05) (0.05) (0.05) (0.06)
(0.04)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
TOTAL RETURN 3 2.31% 5.27% 5.41% 5.15% 5.84%
4.26%

RATIOS TO AVERAGE NET ASSETS:
Expenses 4 0.56% 5 0.56% 0.56% 0.57% 0.50%
0.50%
Net investment income 4 4.49% 5 4.98% 5.15% 4.89% 5.60%
3.79%
Expenses (after waivers) 0.41% 5 0.41% 0.39% 0.41% 0.42%
0.34%
Net investment income (after waivers) 4.64% 5 5.13% 5.32% 5.05% 5.68%
3.95%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $707,737 $495,172 $325,390 $18,415 $20,372
$21,739

</TABLE>

1 The Fund has changed its fiscal year-end from January 31 to July 31.

3 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

4 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

5 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Tax-Free Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.03 0.03 0.03 0.03 0.03
LESS DISTRIBUTIONS:
Distributions from net investment income (0.03) (0.03) (0.03) (0.03) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 2.89% 3.25% 3.24% 3.29% 3.39%

RATIOS TO AVERAGE NET ASSETS:
Expenses 2 0.55% 0.55% 0.55% 0.56% 0.59%
Net investment income 2 2.73% 3.10% 3.09% 3.11% 3.34%
Expenses (after waivers) 0.45% 0.45% 0.45% 0.45% 0.45%
Net investment income (after waivers) 2.83% 3.20% 3.19% 3.22% 3.48%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $1,055,650 $940,516 $587,983 $406,408 $252,016

</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Treasury Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.05
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 4.65% 5.28% 5.10% 5.26% 5.23%

RATIOS TO AVERAGE NET ASSETS:
Expenses 2 0.54% 0.55% 0.55% 0.56% 0.56%
Net investment income 2 4.45% 5.05% 4.93% 5.01% 5.42%
Expenses (after waivers) 0.45% 0.45% 0.45% 0.45% 0.45%
Net investment income (after waivers) 4.54% 5.15% 5.03% 5.12% 5.53%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $5,034,388 $5,045,428 $3,054,110 $1,516,839 $543,855

</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

[Graphic]
Federated
World-Class Investment Manager
PROSPECTUS

Money Market Obligations Trust

Government Obligations Fund
Government Obligations
Tax-Managed Fund
Municipal Obligations Fund
Prime Obligations Fund
Prime Cash Obligations Fund
Prime Value Obligations Fund
Tax-Free Obligations Fund
Treasury Obligations Fund

INSTITUTIONAL SERVICE SHARES

OCTOBER 31, 1999

You can obtain information about the Funds (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access Fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for
information on the Public Reference Room's operations and copying fees.

[Graphic]
Federated
Money Market Obligations Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor

Investment Company Act File No. 811-5950

Cusip 60934N807 Cusip 60934N849 Cusip 60934N641 Cusip 60934N708 Cusip 60934N617
Cusip 60934N575 Cusip 60934N880 Cusip 60934N872

G02705-02 (10/99)

[Graphic]

STATEMENT OF ADDITIONAL INFORMATION
Money Market Obligations Trust

Government Obligations Fund (Government Fund)

Government Obligations Tax-Managed Fund (Government Tax-Managed Fund)

Municipal Obligations Fund (Municipal Fund)

Prime Obligations Fund (Prime Fund)

Prime Cash Obligations Fund (Prime Cash Fund)

Prime Value Obligations Fund (Prime Value Fund)

Tax-Free Obligations Fund (Tax-Free Fund)

Treasury Obligations Fund (Treasury Fund)

INSTITUTIONAL SERVICE SHARES

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Institutional Service Shares of the
Funds, dated October 31, 1999. This SAI incorporates by reference the Funds'
Annual Reports. Obtain the prospectus or the Annual Reports without charge by
calling 1-800-341-7400.

OCTOBER 31, 1999

G02705-04 (10/99)

[Graphic]

CONTENTS

How are the Funds Organized? 1

Securities in Which the Funds Invest 1

What Do Shares Cost? 5

How are the Funds Sold? 5

Subaccounting Services 5

Redemption in Kind 6

Massachusetts Partnership Law 6

Account and Share Information 6

Tax Information 6

Who Manages and Provides Services to the Funds? 7

How Do the Funds Measure Performance? 11

Who is Federated Investors, Inc.? 14

Financial Information 15

Investment Ratings 15

Addresses 17

How are the Funds Organized?

The Board of Trustees (the Board) has established three classes of shares of the
Funds, known as Institutional Shares, Institutional Service Shares and
Institutional Capital Shares. This SAI relates to Institutional Service Shares
(Shares). The Funds' investment adviser is Federated Investment Management
Company (Adviser). Effective March 31, 1999, Federated Management, former
adviser to the Funds (except the Government Tax-Managed Fund) and Federated
Administrative Services, former adviser to the Government Tax-Managed Fund,
became Federated Investment Management Company (formerly, Federated Advisers).

Securities in Which the Funds Invest

SECURITIES DESCRIPTIONS AND TECHNIQUES

ZERO COUPON SECURITIES

SPECIAL TRANSACTIONS

DELAYED DELIVERY TRANSACTIONS

Delayed delivery transactions, including when issued transactions, are
arrangements in which a Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by a Fund to the issuer and
no interest accrues to a Fund. A Fund records the transaction when it agrees to
buy the securities and reflects their value in determining the price of its
shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for a Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.

SECURITIES LENDING

The Prime Fund has no present intention to engage in securities lending.

ASSET COVERAGE

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

In addition, a Fund may invest in the securities described below.

PRIME FUND, PRIME CASH FUND AND PRIME VALUE FUND

MUNICIPAL SECURITIES

INSURANCE CONTRACTS

Insurance contracts include guaranteed investment contracts, funding agreements
and annuities. The Funds treat these contracts as fixed income securities.

FOREIGN SECURITIES

Foreign securities are securities of issuers based outside the United States.
The Funds consider an issuer to be based outside the United States if:

* it is organized under the laws of, or has a principal office located in,
another country;

* the principal trading market for its securities is in another country; or

Along with the risks normally associated with domestic securities of the same
type, foreign securities are subject to risks of foreign investing.

The Prime Fund, the Prime Cash Fund and the Prime Value Fund also may invest in
U.S. Treasury securities and agency securities, which are described in the
prospectus.

MUNICIPAL FUND AND TAX-FREE FUND

GENERAL OBLIGATION BONDS

SPECIAL REVENUE BONDS

PRIVATE ACTIVITY BONDS

The interest on many types of private activity bonds is subject to the federal
alternative minimum tax (AMT). The Funds may invest in bonds subject to AMT.

MUNICIPAL LEASES

The Funds may invest in securities supported by individual leases or pools of
municipal leases.

TEMPORARY DEFENSIVE INVESTMENTS

GOVERNMENT FUND, GOVERNMENT TAX-MANAGED FUND, MUNICIPAL FUND, PRIME
FUND, PRIME CASH FUND, PRIME VALUE FUND AND TAX-FREE FUND

REVERSE REPURCHASE AGREEMENTS

INVESTMENT RATINGS

INVESTMENT RISKS

There are many factors which may affect an investment in the Funds. The Funds'
principal risks are described in the prospectus. Additional risk factors are
outlined below.

GOVERNMENT TAX-MANAGED FUND

CREDIT RISKS

MUNICIPAL FUND AND TAX-FREE FUND

CREDIT RISKS

Credit risk includes the possibility that a party to a transaction involving the
Funds will fail to meet their obligations. This could cause the Funds to lose
the benefit of the transaction or prevent a Fund from selling or buying other
securities to implement its investment strategy.

TAX RISKS

Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.

PRIME FUND, PRIME CASH FUND AND PRIME VALUE FUND

RISKS OF FOREIGN INVESTING

PREPAYMENT RISKS

GOVERNMENT FUND, GOVERNMENT TAX-MANAGED FUND, MUNICIPAL FUND, PRIME
FUND, PRIME CASH FUND, PRIME VALUE FUND AND TAX-FREE FUND

LEVERAGE RISKS

FUNDAMENTAL INVESTMENT OBJECTIVES AND POLICIES

FUND OBJECTIVE
Government Fund To provide current income consistent with
stability of principal.
Government Tax-Managed Fund To provide current income
consistent with stability of principal and
liquidity.
Prime Fund To provide current income consistent with
stability of principal.
Tax-Free Fund To provide dividend income exempt from
federal regular income tax consistent with
stability of principal.
Treasury Fund To provide current income consistent with
stability of principal.

The investment objective of each Fund may not be changed by the Fund's Trustees
without shareholder approval.

INVESTMENT LIMITATIONS

DIVERSIFICATION OF INVESTMENTS

ISSUING SENIOR SECURITIES AND BORROWING MONEY

A Fund may borrow money, directly or indirectly, and issue senior securities to
the maximum extent permitted under the 1940 Act.

INVESTING IN REAL ESTATE

INVESTING IN COMMODITIES

A Fund may not purchase or sell physical commodities, provided that the Fund may
purchase securities of companies that deal in commodities.

UNDERWRITING

LENDING CASH OR SECURITIES

CONCENTRATION OF INVESTMENTS

PLEDGING ASSETS

BUYING ON MARGIN

A Fund will not purchase securities on margin, provided that a Fund may obtain
short-term credits necessary for the clearance of purchases and sales of
securities.

INVESTING IN ILLIQUID SECURITIES

INVESTING IN RESTRICTED SECURITIES

The Municipal Fund, the Prime Fund, the Prime Cash Fund, the Prime Value Fund
and the Tax-Free Fund may invest in securities subject to restriction on resale
under the federal securities laws.

For purposes of the concentration limitation (with the exception of the Prime
Fund and the Prime Value Fund), (a) utility companies will be divided according
to their services, for example, gas, gas transmission, electric and telephone
will each be considered a separate industry; (b) financial service companies
will be classified according to the end users of their services, for example,
automobile finance, bank finance and diversified finance will each be considered
a separate industry; and (c) asset-backed securities will be classified
according to the underlying assets securing such securities.

REGULATORY COMPLIANCE

DETERMINING MARKET VALUE OF SECURITIES

The Funds' use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in the Rule. Under the Rule,
the Board must establish procedures reasonably designed to stabilize the net
asset value per Share, as computed for purposes of distribution and redemption,
at $1.00 per Share, taking into account current market conditions and each
Fund's investment objective. The procedures include monitoring the relationship
between the amortized cost value per Share and the net asset value per Share
based upon available indications of market value. The Board will decide what, if
any, steps should be taken if there is a difference of more than 0.5 of 1%
between the two values. The Board will take any steps they consider appropriate
(such as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from differences
between the two methods of determining net asset value.

What Do Shares Cost?

How are the Funds Sold?

Under the Distributor's Contract with the Funds, the Distributor
(Federated Securities Corp.) offers Shares on a continuous, best-efforts
basis.

SHAREHOLDER SERVICES

SUPPLEMENTAL PAYMENTS

Investment professionals receive such fees for providing distribution- related
or shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Funds or other
special events at recreational-type facilities, or items of material value.
These payments will be based upon the amount of Shares the investment
professional sells or may sell and/or upon the type and nature of sales or
marketing support furnished by the investment professional.

Subaccounting Services

Redemption in Kind

Massachusetts Partnership Law

Account and Share Information

VOTING RIGHTS

As of October 7, 1999, the following shareholders owned of record, beneficially,
or both, 5% or more of outstanding Institutional Service Shares of the Funds:
Citizens Bank of Rhode Island, Providence, Rhode Island, 13.47%, BancFirst,
Oklahoma City, Oklahoma, 11.12%, Perry Baker & Co., Westerly, Rhode Island,
7.09% and Currier & Co., Salem, Massachusetts, 5.58% of the Government
Tax-Managed Fund; The Mark Travel Corp., Milwaukee, Wisconsin, 27.39%, UBS AG
Omnibus Account, New York, New York, 13.38% and Primevest Financial Services,
St. Cloud, Minnesota, 7.07% of the Municipal Fund; Laba & Co., Chicago,
Illinois, 29.19% and Peoples Bank, Bridgeport, Connecticut, 7.34% of the Prime
Fund; Harris Trust and Savings Bank, Chicago, Illinois, 47.30%, Hare & Co., New
York, New York, 13.19%, Kaw & Co., Charleston, West Virginia, 7.39% and First
Union Capital Markets Corp., Charlotte, North Carolina, 5.43% of the Prime Cash
Fund; Primevest Financial Services, St. Cloud, Minnesota, 10.71%, Thafnab & Co.,
Terre Haute, Indiana, 7.71% and Hare & Co., c/o Bank of New York, New York, New
York, 6.53% of the Prime Value Fund; Naidot & Co., Woodbridge, New Jersey,
21.65%, Strafe & Co., Columbus, Ohio, 12.37% and Kaw & Co., Charleston, West
Virginia, 5.83% of the Tax-Free Fund; The Chase Manhattan Bank, N.A., New York,
New York, 9.17%, Plitt & Co., Baltimore, Maryland, 7.40% and Turtle & Co.,
Boston, Massachusetts, 5.78% of the Treasury Fund.

Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

Tax Information

FEDERAL INCOME TAX

Who Manages and Provides Services to the Funds?

BOARD OF TRUSTEES

As of October 7, 1999, the Trust's Board and Officers as a group owned less than
1% of the Trust's outstanding Institutional Service Shares.

<TABLE>
<CAPTION>
NAME TOTAL
BIRTH DATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND COMPLEX
<S> <C> <C> <C>

JOHN F. DONAHUE*#+ Chief Executive Officer $0 $0 for the Trust and
Birth Date: July 28, 1924 and Director or Trustee of 54 other investment
Federated Investors Tower the Federated Fund companies in the
1001 Liberty Avenue Complex; Chairman and Fund Complex
Pittsburgh, PA Director, Federated
CHAIRMAN AND TRUSTEE Investors, Inc.; Chairman
and Trustee, Federated Investment
Management Company; Chairman and
Director, Federated Investment
Counseling, and Federated Global
Investment Management Corp.; Chairman,
Passport Research, Ltd.
THOMAS G. BIGLEY Director or Trustee of $22,998.69 $113,860.22 for the Trust
Birth Date: February 3, 1934 the Federated Fund and 54 other investment
15 Old Timber Trail Complex; Director, Member companies in the
Pittsburgh, PA of Executive Committee, Fund Complex
TRUSTEE Children's Hospital of
Pittsburgh; Director,
Robroy Industries, Inc.
(coated steel conduits/
computer storage
equipment); formerly:
Senior Partner, Ernst &
Young LLP; Director, MED
3000 Group, Inc.
(physician practice
management); Director,
Member of Executive
Committee, University of
Pittsburgh.
JOHN T. CONROY, JR. Director or Trustee of the $25,312.12 $125,264.48 for the Trust
Birth Date: June 23, 1937 Federated Fund Complex; and 54 other investment
Wood/Commercial Dept. President, Investment companies in the
John R. Wood Associates, Inc. Realtors Properties Corporation; Fund Complex
3255 Tamiami Trail North Senior Vice President,
Naples, FL John R. Wood and
TRUSTEE Associates, Inc.,
Realtors; Partner or
Trustee in private real
estate ventures in
Southwest Florida;
formerly: President,
Naples Property
Management, Inc. and
Northgate Village
Development Corporation.
NICHOLAS CONSTANTAKIS++ Director or Trustee of the $3,686.46 $47,958.02 for the Trust
Birth Date: September 3, 1939 Federated Fund Complex; and 29 other investment
175 Woodshire Drive formerly: Partner, companies in the
Pittsburgh, PA Andersen Worldwide SC. Fund Complex
TRUSTEE

JOHN F. CUNNINGHAM++ Director or Trustee of some $12,056.51 $0 for the Trust
Birth Date: March 5, 1943 of the Federated Fund and 46 other investment
353 El Brillo Way Complex; Chairman, companies in the
Palm Beach, FL President and Chief Fund Complex
TRUSTEE Executive Officer,
Cunningham & Co., Inc.
(strategic business
consulting); Trustee
Associate, Boston College;
Director, Iperia Corp.
(communications/software);
formerly: Director,
Redgate Communications and
EMC Corporation (computer
storage systems)
.
Previous Positions:
Chairman of the Board and
Chief Executive Officer,
Computer Consoles, Inc.;
President and Chief
Operating Officer, Wang
Laboratories; Director,
First National Bank of
Boston; Director, Apollo
Computer, Inc.

J. CHRISTOPHER DONAHUE+ President or Executive $0 $0 for the Trust
Birth Date: April 11, 1949 Vice President of the and 16 other investment
Federated Investors Tower Federated Fund Complex; companies in the
1001 Liberty Avenue Director or Trustee of some Fund Complex
Pittsburgh, PA of the Funds in the
PRESIDENT AND TRUSTEE Federated Fund Complex;
President, Chief Executive Officer and
Director, Federated Investors, Inc.;
President and Trustee, Federated
Investment Management Company;
President and Trustee, Federated
Investment Counseling, President and
Director, Federated Global Investment
Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director,
Federated Services Company.

LAWRENCE D. ELLIS, M.D.* Director or Trustee of the $22,998.69 $113,860.22 for the Trust
Birth Date: October 11, 1932 Federated Fund Complex; and 54 other investment
3471 Fifth Avenue Professor of Medicine, companies in the
Suite 1111 University of Pittsburgh; Fund Complex
Pittsburgh, PA Medical Director,
TRUSTEE University of Pittsburgh
Medical Center-Downtown; Hematologist,
Oncologist, and Internist, University
of Pittsburgh Medical Center; Member,
National Board of Trustees, Leukemia
Society of America.

CHARLES F. MANSFIELD, JR.++ Director or Trustee of some $12,056.51 $0 for the Trust
Birth Date: April 10, 1945 of the Federated Fund and 50 other investment
80 South Road Complex; Management companies in the
Westhampton Beach, NY Consultant. Fund Complex
TRUSTEE Previous Positions: Chief
Executive Officer, PBTC International
Bank; Partner, Arthur Young & Company
(now Ernst & Young LLP); Chief
Financial Officer of Retail Banking
Sector, Chase Manhattan Bank; Senior
Vice President, Marine Midland Bank;
Vice President, Citibank; Assistant
Professor of Banking and Finance, Frank
G. Zarb School of Business, Hofstra
University.

JOHN E. MURRAY, JR., J.D., S.J.D.# Director or Trustee of $24,201.52 $113,860.22 for the Trust
Birth Date: December 20, 1932 the Federated Fund and 54 other investment
President, Duquesne University Complex; President, Law companies in the
Pittsburgh, PA Professor, Duquesne Fund Complex
TRUSTEE University; Consulting
Partner, Mollica & Murray;
Director, Michael Baker
Corp. (engineering,
construction, operations,
and technical services).
Previous Positions: Dean
and Professor of Law,
University of Pittsburgh
School of Law; Dean and
Professor of Law, Villanova
University School of Law.

MARJORIE P. SMUTS Director or Trustee of the $22,998.69 $113,860.22 for the Trust
Birth Date: June 21, 1935 Federated Fund Complex; and 54 other investment
4905 Bayard Street Public Relations/ companies in the
Pittsburgh, PA Marketing/Conference Fund Complex
TRUSTEE Planning.
Previous Positions:
National Spokesperson,
Aluminum Company of
America; television
producer; business owner.

JOHN S. WALSH++ Director or Trustee of some $12,056.51 $0 for the Trust and
Birth Date: November 28, 1957 of the Federated Fund 48 other investment
2007 Sherwood Drive Complex; President and companies in the
Valparaiso, IN Director, Heat Wagon, Inc. Fund Complex
TRUSTEE (manufacturer of
construction temporary
heaters); President and
Director, Manufacturers
Products, Inc.
(distributor of portable
construction heaters);
President, Portable Heater
Parts, a division of
Manufacturers Products,
Inc.; Director, Walsh &
Kelly, Inc. (heavy highway
contractor); formerly:
Vice President, Walsh &
Kelly, Inc.

EDWARD C. GONZALES Trustee or Director of some $0 $0 for the Trust and
Birth Date: October 22, 1930 of the Funds in the 1 other investment
Federated Investors Tower Federated Fund Complex; company in the
1001 Liberty Avenue President, Executive Vice Fund Complex
Pittsburgh, PA President and Treasurer of
EXECUTIVE VICE PRESIDENT some of the Funds in the
Federated Fund Complex; Vice Chairman,
Federated Investors, Inc.; Vice
President, Federated Investment
Management Company and Federated
Investment Counseling, Federated Global
Investment Management Corp. and
Passport Research, Ltd.; Executive Vice
President and Director, Federated
Securities Corp.; Trustee, Federated
Shareholder Services Company.

JOHN W. MCGONIGLE Executive Vice President $0 $0 for the Trust and
Birth Date: October 26, 1938 and Secretary of the 54 other investment
Federated Investors Tower Federated Fund Complex; companies in the
1001 Liberty Avenue Executive Vice President, Fund Complex
Pittsburgh, PA Secretary and Director,
EXECUTIVE VICE PRESIDENT Federated Investors, Inc.;
AND SECRETARY Trustee, Federated
Investment Management Company and
Federated Investment Counseling;
Director, Federated Global Investment
Management Corp., Federated Services
Company and Federated Securities Corp.

RICHARD J. THOMAS Treasurer of the Federated $0 $0 for the Trust and
Birth Date: June 17, 1954 Fund Complex; Vice 54 other investment
Federated Investors Tower President - Funds companies in the
1001 Liberty Avenue Financial Services Fund Complex
Pittsburgh, PA Division, Federated
TREASURER Investors, Inc.; formerly:
various management
positions within Funds
Financial Services
Division of Federated
Investors, Inc.

RICHARD B. FISHER President or Vice $0 $0 for the Trust and
Birth Date: May 17, 1923 President of some of the 6 other investment
Federated Investors Tower Funds in the Federated Fund companies in the
1001 Liberty Avenue Complex; Director or Fund Complex
Pittsburgh, PA Trustee of some of the
VICE PRESIDENT Funds in the Federated Fund
Complex; Executive Vice
President, Federated
Investors, Inc.; Chairman
and Director, Federated
Securities Corp.

<CAPTION>
NAME TOTAL
BIRTH DATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND COMPLEX
<S> <C> <C> <C>
WILLIAM D. DAWSON, III Chief Investment Officer $0 $0 for the Trust and
Birth Date: March 3, 1949 of this Fund and various 41 other investment
Federated Investors Tower other Funds in the companies in the
1001 Liberty Avenue Federated Fund Complex; Fund Complex
Pittsburgh, PA Executive Vice President,
CHIEF INVESTMENT OFFICER Federated Investment
Counseling, Federated Global Investment
Management Corp., Federated Investment
Management Company and Passport
Research, Ltd.; Registered
Representative, Federated Securities
Corp.; Portfolio Manager, Federated
Administrative Services; Vice
President, Federated Investors, Inc.;
formerly: Executive Vice President and
Senior Vice President, Federated
Investment Counseling Institutional
Portfolio Management Services Division;
Senior Vice President, Federated
Investment Management Company and
Passport Research, Ltd.

DEBORAH A. CUNNINGHAM Deborah A. Cunningham is $0 $0 for the Trust and
Birth Date: September 15, 1959 Vice President of the 6 other investment
Federated Investors Tower Trust. Ms. Cunningham companies in the
1001 Liberty Avenue joined Federated in 1981 Fund Complex
Pittsburgh, PA and has been a Senior
VICE PRESIDENT Portfolio Manager and a
Senior Vice President of
the Funds' Adviser since
1997. Ms. Cunningham
served as a Portfolio
Manager and a Vice
President of the Adviser
from 1993 until 1996.
Ms. Cunningham is a
Chartered Financial
Analyst and received her
M.B.A. in Finance from
Robert Morris College.

MARY JO OCHSON Mary Jo Ochson is Vice $0 $0 for the Trust and
Birth Date: September 12, 1953 President of the Trust. 7 other investment
Federated Investors Tower Ms. Ochson joined companies in the
1001 Liberty Avenue Federated in 1982 and has Fund Complex
Pittsburgh, PA been a Senior Portfolio
VICE PRESIDENT Manager and a Senior Vice
President of the Funds'
Adviser since 1996. From
1988 through 1995,
Ms. Ochson served as a
Portfolio Manager and a
Vice President of the
Funds' Adviser. Ms. Ochson
is a Chartered Financial
Analyst and received her
M.B.A. in Finance from the
University of Pittsburgh.

</TABLE>

* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for the
Funds.

The Adviser is a wholly owned subsidiary of Federated.

OTHER RELATED SERVICES

BROKERAGE TRANSACTIONS

ADMINISTRATOR

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Funds' portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

CUSTODIAN

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

INDEPENDENT PUBLIC ACCOUNTANTS

INDEPENDENT AUDITORS

FEES PAID BY THE FUNDS FOR SERVICES

<TABLE>
<CAPTION>
ADVISORY
FEE SHAREHOLDER
ADVISORY FEE REDUCTION ADMINISTRATIVE
FEE SERVICES FEE
FOR THE YEAR ENDED
JULY 31 1999 1998 1997 1999 1998
1997 1999
<S> <C> <C> <C> <C> <C>
<C> <C>
Government Fund $ 12,594,895 $ 9,364,290 $ 6,777,523 $ 4,748,275 $ 3,531,785 $
2,559,413 $ 4,433,875
5,748,147 4,778,285
3,522,148
Government
Tax-Managed Fund 4,442,958 2,869,299 1,452,990 1,674,995 1,082,093
548,677 2,950,939
2,187,791 1,725,248
923,964
Prime Fund 18,192,962 14,305,445 10,030,131 6,858,747 5,395,419
3,787,706 9,353,421
9,378,326 7,090,763
5,562,429
Tax-Free Fund 7,008,989 5,174,140 4,284,365 2,642,389 1,951,404
1,617,952 2,567,781
3,652,002 2,661,895
2,116,877
Treasury Fund 22,626,298 19,318,524 13,886,919 8,530,115 7,285,996
5,244,250 12,980,684
9,896,725 9,537,113
6,879,101

<CAPTION>
ADVISORY
FEE SHAREHOLDER
ADVISORY FEE REDUCTION ADMINISTRATIVE
FEE SERVICES FEE
FOR THE YEAR ENDED
JANUARY 31 1999 1998 1997 1 1999 1998
1997 1999
<S> <C> <C> <C> <C> <C>
<C> <C>
Municipal Fund $ 803,037 $ 447,960 $ 76,352 $ 302,822 $ 190,864 $
19,609 $ 157,723
636,478 447,960
76,352
Prime Cash Fund 4,676,382 3,485,448 911,504 1,762,996 1,315,415
30,284 1,803,553
2,853,923 2,107,753
505,519
Prime Value Fund 3,264,534 1,821,778 202,835 1,230,729 687,478
78,894 960,721
2,420,288 1,553,105
166,441

<CAPTION>
ADVISORY
FEE SHAREHOLDER
ADVISORY FEE REDUCTION ADMINISTRATIVE
FEE SERVICES FEE
FOR THE PERIOD ENDED
JULY 31 1999 2 1999
2 1999 2
<S> <C> <C> <C> <C>
<C> <C>
Municipal Fund $ 516,311 $
194,649 $ 101,418

446,031
Prime Cash Fund 3,622,592
1,365,717 1,144,130

2,260,468
Prime Value Fund 2,380,186
897,330 676,637

1,769,715

</TABLE>

2 The Fund has changed its fiscal year-end from January 31 to July 31.

Fees are allocated among classes based on their pro rata share of Fund assets,
except for shareholder services fees, which are borne only by the applicable
class of Shares.

How Do the Funds Measure Performance?

The Funds may advertise Share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns are given for the one-year, five-year or Start of Performance
periods ended July 31, 1999.

Yield, Effective Yield and Tax-Equivalent Yield are given for the 7-day period
ended July 31, 1999.

Performance of the Municipal Fund, the Prime Cash Fund and the Prime Value Fund
shown are prior to the Funds' reorganization as portfolios of the Trust on
November 1, 1999.

<TABLE>
<CAPTION>
START OF PERFORMANCE
GOVERNMENT FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON JULY 5, 1994
<S> <C> <C> <C> <C>
Total Return - 4.78% 5.17% 5.16%
Yield 4.67% - - -
Effective Yield 4.78% - - -

<CAPTION>
START OF PERFORMANCE
GOVERNMENT TAX-MANAGED FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON MAY 30, 1995
<S> <C> <C> <C> <C>
Total Return - 4.74% - 5.09%
Yield 4.60% - - -
Effective Yield 4.71% - - -

<CAPTION>
START OF PERFORMANCE
MUNICIPAL FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON FEBRUARY 8, 1993
<S> <C> <C> <C> <C>
Total Return - 3.10% 3.37% 3.12%
Yield 2.97% - - -
Effective Yield 3.02% - - -
Tax-Equivalent Yield 4.92% - - -

<CAPTION>
START OF PERFORMANCE
PRIME FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON JULY 5, 1994
<S> <C> <C> <C> <C>
Total Return - 4.88% 5.23% 5.21%
Yield 4.76% - - -
Effective Yield 4.87% - - -

<CAPTION>
START OF PERFORMANCE
PRIME CASH FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON SEPTEMBER 2, 1993
<S> <C> <C> <C> <C>
Total Return - 4.89% 5.26% 4.95%
Yield 4.71% - - -
Effective Yield 4.82% - - -

<CAPTION>
START OF PERFORMANCE
PRIME VALUE FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON SEPTEMBER 1, 1993
<S> <C> <C> <C> <C>
Total Return - 4.93% 5.29% 4.99%
Yield 4.74% - - -
Effective Yield 4.86% - - -

<CAPTION>
START OF PERFORMANCE
TAX-FREE FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON JULY 5, 1994
<S> <C> <C> <C> <C>
Total Return - 2.89% 3.21% 3.20%
Yield 2.75% - - -
Effective Yield 2.79% - - -
Tax-Equivalent Yield 4.55% - - -

<CAPTION>
START OF PERFORMANCE
TREASURY FUND 7-DAY PERIOD 1 YEAR 5 YEARS ON JULY 5, 1994
<S> <C> <C> <C> <C>
Total Return - 4.65% 5.10% 5.09%
Yield 4.54% - - -
Effective Yield 4.64% - - -
</TABLE>

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.

YIELD, EFFECTIVE YIELD AND TAX-EQUIVALENT YIELD

The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
Share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional Shares purchased with
dividends earned from the original one Share and all dividends declared on the
original and any purchased Shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base period return; and multiplying the base period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result. The tax-equivalent yield
of Shares is calculated similarly to the yield, but is adjusted to reflect the
taxable yield that Shares would have had to earn to equal the actual yield,
assuming a specific tax rate.

TAX EQUIVALENCY TABLE

<TABLE>
<CAPTION>
TAXABLE YIELD
EQUIVALENT
FOR 1999
MULTISTATE
MUNICIPAL
FUND
FEDERAL INCOME
TAX
BRACKET: 15.00% 28.00% 31.00%
36.00% 39.60%
<S> <C> <C> <C> <C>
<C>
Joint Return $1-43,050 $43,051-104,050 $104,051-158,550 $158,551-283,150
OVER $283,150
Single Return $1-25,750 $25,751-62,450 $62,451-130,250 $130,251-283,150
OVER $283,150
TAX-EXEMPT YIELD: TAXABLE YIELD EQUIVALENT:
1.00% 1.18% 1.39% 1.45% 1.56%
1.66%
1.50% 1.76% 2.08% 2.17% 2.34%
2.48%
2.00% 2.35% 2.78% 2.90% 3.13%
3.31%
2.50% 2.94% 3.47% 3.62% 3.91%
4.14%
3.00% 3.53% 4.17% 4.35% 4.69%
4.97%
3.50% 4.12% 4.86% 5.07% 5.47%
5.79%
4.00% 4.71% 5.56% 5.80% 6.25%
6.62%
4.50% 5.29% 6.25% 6.52% 7.03%
7.45%
5.00% 5.88% 6.94% 7.25% 7.81%
8.28%
5.50% 6.47% 7.64% 7.97% 8.59%
9.11%
6.00% 7.06% 8.33% 8.70% 9.38%
9.93%
6.50% 7.65% 9.03% 9.42% 10.16%
10.76%
7.00% 8.24% 9.72% 10.14% 10.94%
11.59%
7.50% 8.82% 10.42% 10.87% 11.72%
12.42%
8.00% 9.41% 11.11% 11.59% 12.50%
13.25%

</TABLE>

Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Funds; and

* information about the mutual fund industry from sources such as the Investment
Company Institute.

The Funds may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

LIPPER ANALYTICAL SERVICES, INC.

Lipper Analytical Services, Inc. ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.

IBC/DONOGHUE'S MONEY FUND REPORT

IBC/Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.

MONEY

Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.

SALOMON 30-DAY CD INDEX

Salomon 30-Day CD Index compares rate levels of 30-day certificates of deposit
from the top ten prime representative banks.

SALOMON 30-DAY TREASURY BILL INDEX

Salomon 30-Day Treasury Bill Index is a weekly quote of the most representative
yields for selected securities, issued by the U.S. Treasury, maturing in 30
days.

DISCOUNT CORPORATION OF NEW YORK 30-DAY FEDERAL AGENCIES

Discount Corporation of New York 30-Day Federal Agencies is a weekly quote of
the average daily offering price for selected federal agency issues maturing in
30 days.

BANK RATE MONITOR(C) NATIONAL INDEX

Who is Federated Investors, Inc.?

FEDERATED FUNDS OVERVIEW

MUNICIPAL FUNDS

EQUITY FUNDS

CORPORATE BOND FUNDS

GOVERNMENT FUNDS

MONEY MARKET FUNDS

MUTUAL FUND MARKET

FEDERATED CLIENTS OVERVIEW

Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

INSTITUTIONAL CLIENTS

BANK MARKETING

BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES

Financial Information

The Financial Statements for the Funds for the fiscal year ended July 31, 1999
are incorporated herein by reference to the Annual Reports to Shareholders of
the Funds dated July 31, 1999.

Investment Ratings

STANDARD & POOR'S SHORT-TERM MUNICIPAL OBLIGATION RATINGS

An S&P note rating reflects the liquidity concerns and market access risks
unique to notes.

SP-1-Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
sign (+) designation.

SP-2-Satisfactory capacity to pay principal and interest.

VARIABLE RATE DEMAND NOTES AND TENDER OPTION BONDS RATINGS

COMMERCIAL PAPER RATINGS

An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.

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.

LONG-TERM DEBT RATINGS

AAA-Debt rated AAA has the highest rating assigned by S&P. 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.

MOODY'S INVESTORS SERVICE SHORT-TERM MUNICIPAL OBLIGATION RATINGS

MIG1-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.

MIG2-This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.

VARIABLE RATE DEMAND NOTES AND TENDER OPTION BONDS RATINGS

COMMERCIAL PAPER RATINGS

LONG-TERM DEBT RATINGS

NR(1)-The underlying issuer/obligor/guarantor has other outstanding debt rated
AAA by S&P or Aaa by Moody's.

NR(2)-The underlying issuer/obligor/guarantor has other outstanding debt rated
AA by S&P or Aa by Moody's.

NR(3)-The underlying issuer/obligor/guarantor has other outstanding debt rated A
by S&P or Moody's.

FITCH IBCA, INC. SHORT-TERM DEBT RATING DEFINITIONS

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
for timely payment, only slightly less in degree than issues rated F-1+.

F-2-Good Credit Quality. Issues carrying 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.

Addresses

MONEY MARKET OBLIGATIONS TRUST

Government Obligations Fund
Government Obligations Tax-Managed Fund
Municipal Obligations Fund
Prime Obligations Fund
Prime Cash Obligations Fund
Prime Value Obligations Fund
Tax-Free Obligations Fund
Treasury Obligations Fund

Institutional Service Shares

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

DISTRIBUTOR

Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP
225 Franklin Street
Boston, MA 02110-2812

INDEPENDENT AUDITORS

Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

PROSPECTUS
Money Market Obligations Trust

Municipal Obligations Fund

Prime Cash Obligations Fund

Prime Value Obligations Fund

Treasury Obligations Fund

INSTITUTIONAL CAPITAL SHARES

OCTOBER 31, 1999

CONTENTS

Risk/Return Summary 1

What are Each Fund's Fees and Expenses? 6

What are Each Fund's Investment Strategies? 9

What are the Principal Securities in Which the

Funds Invest? 10

What are the Specific Risks of Investing in the Funds? 12

What Do Shares Cost? 13

How are the Funds Sold? 13

How to Purchase Shares 13

How to Redeem Shares 15

Account and Share Information 16

Who Manages the Funds? 17

Financial Information 18

Risk/Return Summary

WHAT IS EACH FUND'S INVESTMENT OBJECTIVE?

Each Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per Share.

<TABLE>

FUND Objective
<S> <C>
Municipal Obligations Fund To provide current income
(Municipal Fund) exempt from all federal
regular income tax
consistent with stability
of principal.

Prime Cash Obligations Fund To provide current income
(Prime Cash Fund) consistent with stability
of principal and
liquidity.

Prime Value Obligations Fund To provide current income
(Prime Value Fund) consistent with stability
of principal and
liquidity.

Treasury Obligations Fund To provide current income
(Treasury Fund) consistent with stability
of principal.

</TABLE>

While there is no assurance that a Fund will achieve its investment objective,
it endeavors to do so by following the strategies and policies described in this
prospectus.

The investment objective of the Municipal Fund, the Prime Cash Fund and the
Prime Value Fund may be changed by the Funds' Trustees without shareholder
approval.

WHAT ARE EACH FUND'S MAIN INVESTMENT STRATEGIES?

Each of the Funds invests in a portfolio of securities maturing in 397 days or
less. The portfolio of each Fund will have a dollar-weighted maturity of 90 days
or less.

MUNICIPAL FUND

PRIME CASH FUND

The Prime Cash Fund invests primarily in high quality fixed income securities
issued by banks, corporations and the U.S. government.

PRIME VALUE FUND

The Prime Value Fund invests primarily in high quality fixed income securities
issued by banks, corporations and the U.S. government.

TREASURY FUND

The Treasury Fund invests primarily in U.S. Treasury securities, including
repurchase agreements collateralized fully by U.S. Treasury securities.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUNDS?

RISK/RETURN BAR CHART AND TABLE

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Capital Shares of Municipal Obligations Fund (the "Former
Fund") prior to its reorganization into the Municipal Obligations Fund, which is
a newly created portfolio of Money Market Obligations Trust. On the date of the
reorganization, November 1, 1999, the Former Fund will be dissolved and its net
assets (inclusive of liabilities recorded on the Former Fund's records) will be
transferred to the Municipal Obligations Fund.

[Graphic]

Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's
Institutional Capital Shares total returns on a calendar year-end basis.

The Former Fund's Institutional Capital Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Capital Shares total return for the nine-month
period from January 1, 1999 to September 30, 1999 was 2.35%.

Within the periods shown in the Chart, the Former Fund's Institutional Capital
Shares highest quarterly return was 1.00% (quarter ended June 30, 1995). Its
lowest quarterly return was 0.56% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Former Fund's Institutional Capital
Shares Average Annual Total Returns for the calendar periods ended
December 31, 1998.

<TABLE>

CALENDAR PERIOD FUND
<S> <C>
1 Year 3.44%
5 Years 3.41%
Start of Performance 1 3.25%

</TABLE>

1 The Former Fund's Institutional Capital Shares start of performance date was
February 8, 1993.

The Former Fund's Institutional Capital Shares 7-Day Net Yield as of December
31, 1998 was 3.65%. Investors may call the Fund at 1-800-341-7400 to acquire the
current 7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Capital Shares of Prime Cash Obligations Fund (the "Former
Fund") prior to its reorganization into the Prime Cash Obligations Fund, which
is a newly created portfolio of Money Market Obligations Trust. On the date of
the reorganization, November 1, 1999, the Former Fund will be dissolved and its
net assets (inclusive of liabilities recorded on the Former Fund's records) will
be transferred to the Prime Cash Obligations Fund.

[Graphic]

The Former Fund's Institutional Capital Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Capital Shares total return for the nine-month
period from January 1, 1999 to September 30, 1999 was 3.65%.

Within the periods shown in the Chart, the Former Fund's Institutional Capital
Shares highest quarterly return was 1.49% (quarter ended June 30, 1995). Its
lowest quarterly return was 1.27% (quarter ended March 31, 1997).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Former Fund's Institutional Capital
Shares Average Annual Total Returns for the calendar periods ended
December 31, 1998.

<TABLE>

CALENDAR PERIOD FUND
<S> <C>
1 Year 5.43%
Start of Performance 1 5.49%

</TABLE>

1 The Former Fund's Institutional Capital Shares start of performance date was
October 6, 1994.

The Former Fund's Institutional Capital Shares 7-Day Net Yield as of December
31, 1998 was 4.98%. Investors may call the Fund at 1-800-341-7400 to acquire the
current 7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Capital Shares of Prime Value Obligations Fund (the "Former
Fund") prior to its reorganization into the Prime Value Obligations Fund, which
is a newly created portfolio of Money Market Obligations Trust. On the date of
the reorganization, November 1, 1999, the Former Fund will be dissolved and its
net assets (inclusive of liabilities recorded on the Former Fund's records) will
be transferred to the Prime Value Obligations Fund.

[Graphic]

The Former Fund's Institutional Capital Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Capital Shares total return for the nine-month
period from January 1, 1999 to September 30, 1999 was 3.67%.

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Former Fund's Institutional Capital
Shares Average Annual Total Returns for the calendar periods ended
December 31, 1998.

<TABLE>

CALENDAR PERIOD FUND
<S> <C>
1 Year 5.46%
5 Years 5.27%
Start of Performance 1 4.94%

</TABLE>

1 The Former Fund's Institutional Capital Shares start of peformance date was
February 8, 1993.

The Former Fund's Institutional Capital Shares 7-Day Net Yield as of December
31, 1998 was 5.03%. Investors may call the Fund at 1-800-341-7400 to acquire the
current 7-Day Net Yield.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Capital
Shares total returns on a calendar year-end basis.

The Fund's Institutional Capital Shares are not sold subject to a sales charge
(load). The total return displayed above is based upon net asset value.

The Fund's Institutional Capital Shares total return for the nine- month period
from January 1, 1999 to September 30, 1999 was 3.49%.

Within the period shown in the Chart, the Fund's Institutional Capital Shares
highest quarterly return was 1.35% (quarter ended June 30, 1998). Its lowest
quarterly return was 1.19% (quarter ended December 31, 1998).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Capital Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.

<TABLE>

CALENDAR PERIOD FUND
<S> <C>
1 Year 5.26%
Start of Performance 1 5.33%

</TABLE>

1 The Fund's Institutional Capital Shares start of performance date was April
14, 1997.

The Fund's Institutional Capital Shares 7-Day Net Yield as of December 31, 1998
was 4.65%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

What are Each Fund's Fees and Expenses?

MONEY MARKET OBLIGATIONS TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Capital Shares of Municipal Obligations Fund, Prime Cash
Obligations Fund and Prime Value Obligations Fund.

<TABLE>

Prime Prime
Municipal Cash Value
Obligations Obligations Obligations
SHAREHOLDER FEES Fund Fund Fund
<S> <C> <C> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of offering price) None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds, as
applicable) None None None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions) (as a
percentage of offering
price) None None None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None None None
Exchange Fee None None None

ANNUAL FUND OPERATING
EXPENSES (Before Waivers)
1
Expenses That are Deducted
From Fund Assets (as a
percentage of average net
assets)
Management Fee 2 0.20% 0.20% 0.20%
Distribution (12b-1) Fee None None None
Shareholder Services Fee 3 0.25% 0.25% 0.25%
Other Expenses 0.18% 0.13% 0.13%
Total Annual Fund
Operating Expenses 4 0.63% 0.58% 0.58%
1 Although not contractually obligated to do so, the adviser and shareholder
services provider expect to waive certain amounts. These are shown below along
with the net expenses the Funds expect to pay for the fiscal year ending July
31, 2000.
Total Waiver of Fund
Expenses 0.33% 0.28% 0.30%
Total Actual Annual Fund
Operating Expenses (after
waivers) 0.30% 0.30% 0.28%
2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by Municipal Obligations Fund, Prime Cash Obligations Fund,
and Prime Value Obligations Fund (after the anticipated voluntary waiver) is
expected to be 0.02%, 0.07% and 0.05%, respectively, for the fiscal year ending
July 31, 2000. 3 The shareholder services provider expects to voluntarily waive
a portion of the shareholder services fee. The shareholder services provider can
terminate this anticipated voluntary waiver at any time. The shareholder
services fee paid by the Funds' Institutional Capital Shares (after the
anticipated voluntary waiver) is expected to be 0.10% for the fiscal year ending
July 31, 2000. 4 For the fiscal year ended July 31, 1999, prior to the
reorganization of Municipal Obligations Fund, Prime Cash Obligations Fund and
Prime Value Obligations Fund, the Former Funds, as portfolios of Money Market
Obligations Trust, had Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) of 0.63% and 0.30%, 0.58%, and
0.30% and 0.58% and 0.28%, respectively.

</TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Funds'
Institutional Capital Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Funds' Institutional Capital
Shares for the time periods indicated and then redeem all of your Shares at the
end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Funds' Institutional Capital Shares operating
expenses are BEFORE WAIVERS as estimated in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

<TABLE>

FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Municipal Fund $64 $202 $351 $786
Prime Cash Fund $59 $186 $324 $726
Prime Value Fund $59 $186 $324 $726

</TABLE>

TREASURY OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Capital Shares of Treasury Obligations Fund.

<TABLE>

SHAREHOLDER FEES
<S> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of offering price) None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds,
as applicable) None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions) (as a
percentage of offering
price) None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None
Exchange Fee None

ANNUAL FUND OPERATING
EXPENSES (Before Waivers)
1
Expenses That are Deducted
From Fund Assets (as a
percentage of average net
assets)
Management Fee 2 0.20%
Distribution (12b-1) Fee None
Shareholder Services Fee 3 0.25%
Other Expenses 0.09%
Total Annual Fund
Operating Expenses 0.54%
1 Although not contractually obligated to do so, the adviser and shareholder
services provider waived certain amounts. These are shown below along with the
net expenses the Fund actually paid for the fiscal year ended July 31, 1999.
Total Waiver of Fund
Expenses 0.24%
Total Actual Annual Fund
Operating Expenses (after
waivers) 0.30%
2 The adviser voluntarily waived a portion of the management fee. The adviser can
terminate this voluntary waiver at any time. The management fee paid by the Fund
(after the voluntary waiver) was 0.11% for the fiscal year ended July 31, 1999.
3 The shareholder services fee has been voluntarily waived. This voluntary waiver
can be terminated at any time. The shareholder services fee paid by the Fund's
Institutional Capital Shares (after the voluntary waiver) was 0.10% for the
fiscal year ended July 31, 1999.

</TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's
Institutional Capital Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional Capital
Shares for the time periods indicated and then redeem all of your Shares at the
end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund's Institutional Capital Shares operating
expenses are before waivers as shown in the table and remain the same. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>

<S> <C>
1 Year $ 55
3 Years $ 173
5 Years $ 302
10 Years $ 677

</TABLE>

What are Each Fund's Investment Strategies?

Each Fund's investment strategy is described earlier under "What are Each Fund's
Main Investment Strategies?" Following is additional information on the
investment strategies for the Funds.

* current U.S. economic activity and the economic outlook,

* current short-term interest rates,

* the Federal Reserve Board's policies regarding short-term interest
rates, and

* the potential effects of foreign economic activity on U.S. short-term
interest rates.

MUNICIPAL FUND, PRIME CASH FUND AND PRIME VALUE FUND

MUNICIPAL FUND

INDUSTRY CONCENTRATION

The Prime Value Fund may invest 25% or more of its assets in obligations of
issuers in the banking industry or in obligations, such as repurchase
agreements, secured by such obligations.

TEMPORARY DEFENSIVE INVESTMENTS

The Municipal Fund may temporarily depart from its principal investment strategy
by investing its assets in securities subject to federal income tax. It may do
this to minimize potential losses and maintain liquidity to meet shareholder
redemptions during adverse market conditions. This may cause the Fund to receive
and distribute taxable income to investors.

What are the Principal Securities in Which the Funds Invest?

MUNICIPAL FUND

PRIME CASH FUND

PRIME VALUE FUND

TREASURY FUND

The Treasury Fund invests primarily in fixed income securities, including U.S.
Treasury securities and repurchase agreements.

FIXED INCOME SECURITIES

U.S. TREASURY SECURITIES

U.S. Treasury securities are direct obligations of the federal government
of the United States.

CORPORATE DEBT SECURITIES

Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Prime Cash Fund and Prime Value Fund may also
purchase interests in bank loans to companies. The credit risks of corporate
debt securities vary widely among issuers.

COMMERCIAL PAPER

DEMAND INSTRUMENTS

BANK INSTRUMENTS

ASSET BACKED SECURITIES

Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than 10 years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes or pass through certificates.

TAX EXEMPT SECURITIES

VARIABLE RATE DEMAND INSTRUMENTS

MUNICIPAL NOTES

CREDIT ENHANCEMENT

REPURCHASE AGREEMENTS

Repurchase agreements are subject to credit risks.

INVESTMENT RATINGS

The money market instruments in which the Prime Cash Fund invests must be rated
in the highest short-term rating category by one or more NRSROs or be of
comparable quality to securities having such ratings. The securities in which
the Municipal Fund and the Prime Value Fund invest must be rated in one of the
two highest short-term rating categories by one or more NRSROs or be of
comparable quality to securities having such ratings.

What are the Specific Risks of Investing in the Funds?

Each of the Funds is subject to interest rate risks and credit risks. In
addition, each of the Funds (except the Treasury Fund) is subject to sector
risks.

INTEREST RATE RISKS

Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISKS

MUNICIPAL FUND, PRIME CASH FUND AND PRIME VALUE FUND

PRIME CASH FUND, PRIME VALUE FUND AND TREASURY FUND

SECTOR RISKS

A substantial part of the portfolio of the Prime Value Fund may be comprised of
securities issued by the banking industry or companies with similar
characteristics. A substantial part of the portfolios of the Municipal Fund, the
Prime Cash Fund and the Prime Value Fund may be comprised of securities credit
enhanced by banks or companies with similar characteristics. As a result, the
Municipal Fund, the Prime Cash Fund and the Prime Value Fund will be more
susceptible to any economic, business, political or other developments which
generally affect these entities.

What Do Shares Cost?

You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Funds attempt to stabilize the net asset value (NAV) of their Shares
at $1.00 by valuing the portfolio securities using the amortized cost method. A
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Funds do not charge a front-end sales charge. The NAV of the Municipal Fund, the
Prime Cash Fund and the Prime Value Fund is determined at 12:00 noon and 3:00
p.m. (Eastern time) and as of the end of regular trading (normally 4:00 p.m.
Eastern time) each day the NYSE is open. The NAV of the Treasury Fund is
determined at 5:00 p.m.
(Eastern time) each day the NYSE is open.

The required minimum initial investment for each Fund is $1,000,000. There is no
required minimum subsequent investment amount.

How are the Funds Sold?

The Funds offer three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Capital
Shares. Each share class has different expenses, which affect their performance.
Contact your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

How to Purchase Shares

You may purchase Shares through an investment professional or directly from the
Funds. The Funds reserve the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

* Establish an account with the investment professional; and

* Submit your purchase order for Shares of the Municipal Fund, the Prime Cash
Fund and the Prime Value Fund to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
3:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment.

* Submit your purchase order for Shares of the Treasury Fund to the investment
professional before 5:00 p.m. (Eastern time). You will receive that day's
dividend if the investment professional forwards the order to the Fund and the
Fund receives payment by 5:00 p.m. (Eastern time). You will become the owner of
Shares and receive dividends when the Fund receives your payment.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUNDS

* Establish your account with a Fund by submitting a completed New Account
Form; and

* Send your payment to the Fund by Federal Reserve wire or check.

You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees incurred by the Fund or Federated
Shareholder Services Company, the Funds' transfer agent.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

BY WIRE

Send your wire to:

State Street Bank and Trust Company

Boston, MA

Dollar Amount of Wire

ABA Number 011000028

Attention: EDGEWIRE

Wire Order Number, Dealer Number or Group Number

Nominee/Institution Name

Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:

Federated Shareholder Services Company

1099 Hingham Street

Rockland, MA 02370-3317

BY INVEST-BY-PHONE

BY AUTOMATED CLEARING HOUSE

How to Redeem Shares

You should redeem Shares:

* through an investment professional if you purchased Shares through an
investment professional; or

* directly from a Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUNDS

BY TELEPHONE

You may redeem Shares by calling a Fund at 1-800-341-7400 once you have
completed the appropriate authorization form for telephone transactions. If you
call before 12:00 noon (Eastern time) with respect to the Municipal Fund, 3:00
p.m. (Eastern time) with respect to the Prime Cash Fund and the Prime Value Fund
and 5:00 p.m. (Eastern time) with respect to the Treasury Fund, your redemption
will be wired to you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time) with respect to the Municipal Fund,
3:00 p.m. (Eastern time) with respect to the Prime Cash Fund and the Prime Value
Fund and 5:00 p.m. (Eastern time) with respect to the Treasury Fund, your
redemption will be wired to you the following business day. You will receive
that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to a Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company

1099 Hingham Street

Rockland, MA 02370-3317

All requests must include:

* Fund Name and Share Class, account number and account registration;

* amount to be redeemed; and

* signatures of all shareholders exactly as registered.

Call your investment professional or the Funds if you need special instructions.

SIGNATURE GUARANTEES

Signatures must be guaranteed if:

* your redemption will be sent to an address other than the address of
record;

* your redemption will be sent to an address of record that was changed
within the last 30 days; or

* a redemption is payable to someone other than the shareholder(s) of
record.

PAYMENT METHODS FOR REDEMPTIONS

* an electronic transfer to your account at a financial institution that is
an ACH member; or

* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

REDEMPTION IN KIND

Although each Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

* to allow your purchase to clear;

* during periods of market volatility; or

* when a shareholder's trade activity or amount adversely impacts a Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from a Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Funds will record your telephone instructions. If a Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

Account and Share Information

ACCOUNT ACTIVITY

You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.

The Municipal Fund sends an annual statement of your account activity to assist
you in completing your federal, state and local tax returns. It is anticipated
that distributions from the Municipal Fund will be primarily dividends that are
exempt from federal income tax, although a portion of the Fund's dividends may
not be exempt. Dividends may be subject to state and local taxes. Capital gains
and non-exempt dividends are taxable whether paid in cash or reinvested in the
Fund. Redemptions are taxable sales. Please consult your tax adviser regarding
your federal, state and local tax liability.

Who Manages the Funds?

ADVISORY FEES

YEAR 2000 READINESS

Financial Information

FINANCIAL HIGHLIGHTS

This information has been audited by Arthur Andersen LLP and Ernst & Young LLP,
whose reports, along with each Fund's audited financial statements, are included
in the Annual Reports.

Financial Highlights-Municipal Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>

PERIOD
ENDED
JULY 31, YEAR ENDED JANUARY 31,
1999 1 1999 1998 1997 2
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02 0.03 0.04 0.03
LESS DISTRIBUTIONS:
Distributions from net investment income (0.02) (0.03) (0.04) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 3 1.53% 3.40% 3.56% 3.42%

RATIOS TO AVERAGE NET ASSETS:
Expenses 4 0.63% 5 0.61% 0.68% 0.65%
Net investment income 4 2.67% 5 3.09% 3.15% 2.55%
Expenses (after waivers) 0.30% 5 0.30% 0.30% 0.30%
Net investment income (after waivers) 3.00% 5 3.40% 3.53% 2.90%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $74,609 $114,535 $17,701 $0.30

</TABLE>

1 The Fund has changed its fiscal year-end from January 31 to July 31.

3 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

4 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

5 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Prime Cash Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>

PERIOD
ENDED
JULY 31, YEAR ENDED JANUARY 31,
1999 1 1999 1998 1997 2
1996 1995 3
<S> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income 0.02 0.05 0.05 0.05
0.06 0.02
LESS DISTRIBUTIONS:
Distributions from net
investment income (0.02) (0.05) (0.05) (0.05)
(0.06) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
TOTAL RETURN 4 2.36% 5.37% 5.48% 5.23%
5.94% 1.66%

RATIOS TO AVERAGE NET ASSETS:
Expenses 5 0.58% 6 0.57% 0.56% 0.50%
0.40% 0.39% 6
Net investment income 5 4.36% 6 4.91% 5.20% 4.82%
5.67% 4.03% 6
Expenses (after waivers) 0.30% 6 0.30% 0.30% 0.32%
0.32% 0.27% 6
Net investment income (after waivers) 4.64% 6 5.18% 5.46% 5.00%
5.75% 4.15% 6
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $245,815 $230,193 $391,159 $48,910
$11,811 $8,318

</TABLE>

1 The Fund has changed its fiscal year-end from January 31 to July 31.

3 Reflects operations for the period from October 6, 1994 (date of initial
public investment) to January 31, 1995.

4 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

5 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

6 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Prime Value Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>

PERIOD
ENDED
JULY 31, YEAR ENDED JANUARY 31,
1999 1 1999 1998 1997 2
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02 0.05 0.05 0.05
LESS DISTRIBUTIONS:
Distributions from net investment income (0.02) (0.05) (0.05) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 3 2.38% 5.40% 5.55% 5.26%

RATIOS TO AVERAGE NET ASSETS:
Expenses 4 0.58% 5 0.58% 0.59% 0.59%
Net investment income 4 4.46% 5 4.93% 5.29% 4.86%
Expenses (after waivers) 0.28% 5 0.28% 0.27% 0.28%
Net investment income (after waivers) 4.76% 5 5.23% 5.61% 5.17%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $275,756 $200,098 $67,064 $20,006

</TABLE>

1 The Fund has changed its fiscal year-end from January 31 to July 31.

2 Federated Investment Management, formerly Federated Management, became the
Fund's investment adviser on November 15, 1996. Prior to November 15, 1996,
Lehman Brothers Global Asset Management served as the Fund's investment adviser.

3 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

4 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

5 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

Financial Highlights-Treasury Obligations Fund

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>

YEAR ENDED JULY 31 1999 1998 1997 1
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.02
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 2 4.81% 5.43% 1.58%

RATIOS TO AVERAGE NET ASSETS:
Expenses 3 0.54% 0.55% 0.55% 4
Net investment income 3 4.37% 5.05% 5.17% 4
Expenses (after waivers) 0.30% 0.30% 0.30% 4
Net investment income (after waivers) 4.61% 5.30% 5.42% 4
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $462,807 $31,703 $42,505

</TABLE>

1 Reflects operations for the period from April 14, 1997 (date of initial public
investment) to July 31, 1997.

2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

3 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

4 Computed on an annualized basis.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

[Graphic]
Federated
World-Class Investment Manager
PROSPECTUS

Money Market Obligations Trust

Municipal Obligations Fund

Prime Cash Obligations Fund

Prime Value Obligations Fund

Treasury Obligations Fund

INSTITUTIONAL CAPITAL SHARES

OCTOBER 31, 1999

Investment Company Act File No. 811-5950

Cusip 60934N633

Cusip 60934N591

Cusip 60934N567

Cusip 60934N823

G02705-05 (10/99)

[Graphic]

STATEMENT OF ADDITIONAL INFORMATION

Money Market Obligations Trust

Municipal Obligations Fund (Municipal Fund)

Prime Cash Obligations Fund (Prime Cash Fund)

Prime Value Obligations Fund (Prime Value Fund)

Treasury Obligations Fund (Treasury Fund)

A Portfolio of Money Market Obligations Trust

INSTITUTIONAL CAPITAL SHARES

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Institutional Capital Shares of the
Funds, dated October 31, 1999. This SAI incorporates by reference the Funds'
Annual Reports. Obtain the prospectus or the Annual Reports without charge by
calling 1-800-341-7400.

OCTOBER 31, 1999

G02705-06 (10/99)

[Graphic]

CONTENTS

How are the Funds Organized? 1

Securities in Which the Funds Invest 1

What Do Shares Cost? 5

How are the Funds Sold? 5

Subaccounting Services 5

Redemption in Kind 5

Massachusetts Partnership Law 6

Account and Share Information 6

Tax Information 6

Who Manages and Provides Services to the Funds? 7

How Do the Funds Measure Performance? 11

Who is Federated Investors, Inc.? 13

Financial Information 14

Investment Ratings 14

Addresses 16

How are the Funds Organized?

The Board of Trustees (the Board) has established three classes of shares of the
Funds, known as Institutional Shares, Institutional Service Shares and
Institutional Capital Shares (Shares). This SAI relates to Institutional Capital
Shares (Shares). The Funds' investment adviser is Federated Investment
Management Company (Adviser). Effective March 31, 1999, Federated Management,
former adviser to the became Federated Investment Management Company (formerly,
Federated Advisers).

Securities in Which the Funds Invest

SECURITIES DESCRIPTIONS AND TECHNIQUES

ZERO COUPON SECURITIES

SPECIAL TRANSACTIONS

DELAYED DELIVERY TRANSACTIONS

SECURITIES LENDING

A Fund will reinvest cash collateral in securities that qualify as an acceptable
investment for a Fund. However, a Fund must pay interest to the borrower for the
use of cash collateral.

Loans are subject to termination at the option of a Fund or the borrower. A Fund
will not have the right to vote on securities while they are on loan, but it
will terminate a loan in anticipation of any important vote. A Fund may pay
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker.

ASSET COVERAGE

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

In addition, a Fund may invest in the securities described below.

PRIME CASH FUND AND PRIME VALUE FUND

MUNICIPAL SECURITIES

INSURANCE CONTRACTS

Insurance contracts include guaranteed investment contracts, funding agreements
and annuities. The Funds treat these contracts as fixed income securities.

FOREIGN SECURITIES

Foreign securities are securities of issuers based outside the United States.
The Funds consider an issuer to be based outside the United States if:

* it is organized under the laws of, or has a principal office located in,
another country;

* the principal trading market for its securities is in another country; or

Along with the risks normally associated with domestic securities of the same
type, foreign securities are subject to risks of foreign investing.

The Prime Cash Fund and the Prime Value Fund also may invest in U.S. Treasury
securities, which are described in the prospectus, and agency securities which
are issued or guaranteed by a federal agency or other government sponsored
entity acting under federal authority.

MUNICIPAL FUND

GENERAL OBLIGATION BONDS

SPECIAL REVENUE BONDS

PRIVATE ACTIVITY BONDS

The interest on many types of private activity bonds is subject to the federal
alternative minimum tax (AMT). The Fund may invest in bonds subject to AMT.

MUNICIPAL LEASES

The Fund may invest in securities supported by individual leases or pools of
municipal leases.

TEMPORARY DEFENSIVE INVESTMENTS

The Municipal Fund may make temporary defensive investments in the following
taxable securities, which are described in the prospectus or herein: U.S.
Treasury securities, agency securities, bank instruments, corporate debt
securities, commercial paper, repurchase agreements and reverse repurchase
agreements.

MUNICIPAL FUND, PRIME CASH FUND AND PRIME VALUE FUND

REVERSE REPURCHASE AGREEMENTS

INVESTMENT RATINGS

INVESTMENT RISKS

There are many factors which may affect an investment in the Funds. The Funds'
principal risks are described in its prospectus. Additional risk factors are
outlined below.

MUNICIPAL FUND

CREDIT RISKS

TAX RISKS

Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.

PRIME CASH FUND AND PRIME VALUE FUND

RISKS OF FOREIGN INVESTING

PREPAYMENT RISKS

MUNICIPAL FUND, PRIME CASH FUND AND PRIME VALUE FUND

LEVERAGE RISKS

FUNDAMENTAL INVESTMENT OBJECTIVE AND POLICY

The investment objective of the Treasury Fund is current income consistent with
stability of principal. The investment objective may not be changed by the
Fund's Trustees without shareholder approval.

As a matter of investment policy which cannot be changed without shareholder
approval, at least 80% of the Municipal Fund's annual interest income will be
exempt from federal regular income tax.

INVESTMENT LIMITATIONS

DIVERSIFICATION OF INVESTMENTS

ISSUING SENIOR SECURITIES AND BORROWING MONEY

A Fund may borrow money, directly or indirectly, and issue senior securities to
the maximum extent permitted under the 1940 Act.

INVESTING IN REAL ESTATE

INVESTING IN COMMODITIES

A Fund may not purchase or sell physical commodities, provided that the Fund may
purchase securities of companies that deal in commodities.

UNDERWRITING

LENDING CASH OR SECURITIES

CONCENTRATION OF INVESTMENTS

A Fund (with the exception of the Prime Value Fund) will not make investments
that will result in the concentration of its investments in the securities of
issuers primarily engaged in the same industry. Government securities, municipal
securities and bank instruments will not be deemed to constitute an industry.

PLEDGING ASSETS

BUYING ON MARGIN

A Fund will not purchase securities on margin, provided that a Fund may obtain
short-term credits necessary for the clearance of purchases and sales of
securities.

INVESTING IN ILLIQUID SECURITIES

INVESTING IN RESTRICTED SECURITIES

The Municipal Fund, the Prime Cash Fund and the Prime Value Fund may invest in
securities subject to restriction on resale under the federal securities laws.

For purposes of the concentration limitation (with the exception of the Prime
Value Fund), (a) utility companies will be divided according to their services,
for example, gas, gas transmission, electric and telephone will each be
considered a separate industry; (b) financial service companies will be
classified according to the end users of their services, for example, automobile
finance, bank finance and diversified finance will each be considered a separate
industry; and (c) asset-backed securities will be classified according to the
underlying assets securing such securities.

REGULATORY COMPLIANCE

The Funds may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Funds will comply
with the various requirements of Rule 2a-7 (the "Rule"), which regulates money
market mutual funds. The Funds will determine the effective maturity of its
investments according to the Rule. The Funds may change these operational
policies to reflect changes in the laws and regulations without the approval of
its shareholders.

DETERMINING MARKET VALUE OF SECURITIES

What Do Shares Cost?

How are the Funds Sold?

Under the Distributor's Contract with the Funds, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.

SHAREHOLDER SERVICES

SUPPLEMENTAL PAYMENTS

Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Funds or other
special events at recreational-type facilities, or items of material value.
These payments will be based upon the amount of Shares the investment
professional sells or may sell and/or upon the type and nature of sales or
marketing support furnished by the investment professional.

Subaccounting Services

Redemption in Kind

Massachusetts Partnership Law

Account and Share Information

VOTING RIGHTS

As of October 20, 1999, the following shareholder owned of record, beneficially,
or both, 5% or more of outstanding Institutional Capital Shares of the Municipal
Fund: Laciba & Co., Warsaw, Indiana, 12.73%. As of October 7, 1999, the
following shareholder owned of record, beneficially, or both, 5% or more of
outstanding Institutional Capital Shares of the Funds: Var & Co., St. Paul,
Minnesota, 21.02%, Hearst Special Trust Account, New York, New York, 15.91%,
Elite Information Group, Los Angeles, California, 13.03%, PNC Securities Corp.,
Pittsburgh, Pennsylvania, 11.35%, Pizzuti, Inc., Columbus, Ohio, 5.53% and
Bayban, New York, New York, 5.32% of the Prime Cash Fund; Summit Bank,
Hackensack, New Jersery, 26.32%, Norwest Investment Services, Inc., Minneapolis,
Minnesota, 12.72%, First Union National Bank, Charlotte, North Carolina, 11.84%,
Kaiser Foundation Health Plan of Texas, Oakland, California, 8.79%, Prairie
Farms Dairy, Carlinville, Illinois, 6.73% and A.G. Edwards & Sons, Inc., St.
Louis, Missouri, 5.23% of the Prime Value Fund; D.C. Financial Responsibility
Authority Principal #17, Washington, D.C., 21.01%, D.C. Financial Responsibility
Authority Escrow Account #5, Washington, D.C., 17.66%, D.C. Financial
Responsibility Authority Escrow Account #13, Washington, D.C., 13.87%, D.C.,
Financial Responsibility and Management Escrow Account #99, Washington, D.C.,
10.80%, D.C. Financial Responsibility Account Escrow Account #9, Washington,
D.C., 7.15% and D.C. Financial Responsibility and Management Escrow Account #4,
Washington, D.C., 5.40% of the Treasury Fund.

Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

Tax Information

FEDERAL INCOME TAX

Who Manages and Provides Services to the Funds?

BOARD OF TRUSTEES

As of October 7, 1999, the Trust's Board and Officers as a group owned less than
1% of the Trust's outstanding Shares.

<TABLE>

NAME
TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND
COMPLEX
<S> <C> <C>
<C>
JOHN F. DONAHUE*#+ Chief Executive Officer $0 $0 for the Trust
and
Birth Date: July 28, 1924 and Director or Trustee of 54 other
investment
Federated Investors Tower the Federated Fund companies in
the
1001 Liberty Avenue Complex; Chairman and Fund
Complex
Pittsburgh, PA Director,
Federated
CHAIRMAN AND TRUSTEE Investors, Inc.;
Chairman
and Trustee,
Federated
Investment
Management
Company; Chairman
and
Director,
Federated
Investment Counseling,
and
Federated
Global
Investment
Management
Corp.; Chairman,
Passport
Research, Ltd.
THOMAS G. BIGLEY Director or Trustee of $22,998.69 $113,860.22 for the
Trust
Birth Date: February 3, 1934 the Federated Fund and 54 other investment
companies in the
15 Old Timber Trail Complex; Director, Member Fund
Complex
Pittsburgh, PA of Executive Committee,
TRUSTEE Children's Hospital
of
Pittsburgh; Director,
Robroy Industries, Inc.
(coated steel
conduits/
computer
storage
equipment); formerly:
Senior Partner, Ernst
&
Young LLP; Director,
MED
3000 Group, Inc.
(physician
practice
management); Director,
Member of
Executive
Committee, University
of
Pittsburgh.
JOHN T. CONROY, JR. Director or Trustee of the $25,312.12 $125,264.48 for the
Trust
Birth Date: June 23, 1937 Federated Fund Complex; and 54 other investment
companies in the
Wood/Commercial Dept. President, Investment Fund
Complex
John R. Wood Associates, Inc. Realtors Properties Corporation;
3255 Tamiami Trail North Senior Vice President,
Naples, FL John R. Wood
and
TRUSTEE Associates, Inc.,
Realtors; Partner
or
Trustee in private
real
estate ventures
in
Southwest Florida;
formerly: President,
Naples
Property
Management, Inc.
and
Northgate
Village
Development Corporation.
NICHOLAS CONSTANTAKIS++ Director or Trustee of the $3,686.46 $47,958.02 for the
Trust
Birth Date: September 3, 1939 Federated Fund Complex; and 29 other investment
companies in the
175 Woodshire Drive formerly: Partner, Fund
Complex
Pittsburgh, PA Andersen Worldwide SC.
TRUSTEE
JOHN F. CUNNINGHAM++ Director or Trustee of some $12,056.51 $0 for the
Trust
Birth Date: March 5, 1943 of the Federated Fund and 46 other
investment
353 El Brillo Way Complex; Chairman, companies in
the
Palm Beach, FL President and Chief Fund
Complex
TRUSTEE Executive Officer,
Cunningham & Co., Inc.
(strategic
business
consulting);
Trustee
Associate, Boston College;
Director, Iperia Corp.
(communications/software);
formerly: Director,
Redgate Communications
and
EMC Corporation
(computer
storage systems).
Previous Positions:
Chairman of the Board
and
Chief Executive Officer,
Computer Consoles, Inc.;
President and
Chief
Operating Officer,
Wang
Laboratories; Director,
First National Bank
of
Boston; Director,
Apollo
Computer, Inc.
J. CHRISTOPHER DONAHUE+ President or Executive $0 $0 for the
Trust
Birth Date: April 11, 1949 Vice President of the and 16 other
investment
Federated Investors Tower Federated Fund Complex; companies in
the
1001 Liberty Avenue Director or Trustee of some Fund
Complex
Pittsburgh, PA of the Funds in
the
PRESIDENT AND TRUSTEE Federated Fund Complex;
President, Chief
Executive
Officer and Director,
Federated Investors, Inc.;
President and Trustee,
Federated
Investment
Management Company;
President and Trustee,
Federated
Investment
Counseling, President
and
Director, Federated
Global
Investment
Management
Corp.; President,
Passport
Research, Ltd.; Trustee,
Federated
Shareholder
Services Company;
Director,
Federated
Services Company.
LAWRENCE D. ELLIS, M.D.* Director or Trustee of the $22,998.69 $113,860.22 for the
Trust
Birth Date: October 11, 1932 Federated Fund Complex; and 54 other investment
companies in the
3471 Fifth Avenue Professor of Medicine, Fund
Complex
Suite 1111 University of Pittsburgh;
Pittsburgh, PA Medical Director,
TRUSTEE University of
Pittsburgh
Medical Center-Downtown;
Hematologist, Oncologist,
and Internist,
University
of Pittsburgh
Medical
Center; Member,
National
Board of Trustees,
Leukemia Society
of
America.

<CAPTION>
NAME
TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND
COMPLEX
<S> <C> <C>
<C>
PETER E. MADDEN Director or Trustee of the $20,158.88 $113,860.22 for the
Trust
Birth Date: March 16, 1942 Federated Fund Complex; and 54 other investment
companies in the
One Royal Palm Way formerly: Representative, Fund
Complex
100 Royal Palm Way Commonwealth
of
Palm Beach, FL Massachusetts
General
TRUSTEE Court; President,
State
Street Bank and
Trust
Company and
State
Street Corporation.
Previous Positions:
Director, VISA USA
and
VISA International;
Chairman and Director,
Massachusetts
Bankers
Association; Director,
Depository
Trust
Corporation; Director,
The
Boston
Stock Exchange.
CHARLES F. MANSFIELD, JR. ++ Director or Trustee of some $12,056.51 $0 for the
Trust
Birth Date: April 10, 1945 of the Federated Fund and 50 other
investment
80 South Road Complex; Management companies in
the
Westhampton Beach, NY Consultant. Fund
Complex
TRUSTEE Previous Positions:
Chief
Executive Officer,
PBTC
International Bank;
Partner, Arthur Young
&
Company (now Ernst &
Young
LLP); Chief
Financial
Officer of Retail
Banking
Sector, Chase
Manhattan
Bank; Senior
Vice
President, Marine
Midland
Bank; Vice President,
Citibank;
Assistant
Professor of Banking
and
Finance, Frank G.
Zarb
School of Business,
Hofstra University.
JOHN E. MURRAY, JR., J.D., S.J.D.# Director or Trustee of $24,201.52 $113,860.22 for the
Trust
Birth Date: December 20, 1932 the Federated Fund and 54 other investment
companies in the
President, Duquesne University Complex; President, Law Fund
Complex
Pittsburgh, PA Professor,
Duquesne
TRUSTEE University;
Consulting
Partner, Mollica & Murray;
Director, Michael
Baker
Corp. (engineering,
construction, operations,
and technical services).
Previous Positions:
Dean
and Professor of Law,
University of
Pittsburgh
School of Law; Dean
and
Professor of Law,
Villanova
University
School of Law.
MARJORIE P. SMUTS Director or Trustee of the $22,998.69 $113,860.22 for the
Trust
Birth Date: June 21, 1935 Federated Fund Complex; and 54 other investment
companies in the
4905 Bayard Street Public Relations/ Fund
Complex
Pittsburgh, PA
Marketing/Conference
TRUSTEE Planning.
Previous Positions:
National Spokesperson,
Aluminum Company
of
America;
television
producer; business owner.
JOHN S. WALSH++ Director or Trustee of some $12,056.51 $0 for the
Trust
Birth Date: November 28, 1957 of the Federated Fund and 48 other
investment
2007 Sherwood Drive Complex; President and companies in
the
Valparaiso, IN Director, Heat Wagon, Inc. Fund
Complex
TRUSTEE (manufacturer
of
construction
temporary
heaters); President
and
Director,
Manufacturers
Products, Inc.
(distributor of
portable
construction heaters);
President, Portable
Heater
Parts, a division
of
Manufacturers Products,
Inc.; Director, Walsh
&
Kelly, Inc. (heavy
highway
contractor); formerly:
Vice President, Walsh
&
Kelly, Inc.
EDWARD C. GONZALES Trustee or Director of some $0 $0 for the
Trust
Birth Date: October 22, 1930 of the Funds in the and 1 other
investment
Federated Investors Tower Federated Fund Complex; company in
the
1001 Liberty Avenue President, Executive Vice Fund
Complex
Pittsburgh, PA President and Treasurer
of
EXECUTIVE VICE PRESIDENT some of the Funds in
the
Federated Fund Complex;
Vice Chairman,
Federated
Investors, Inc.;
Vice
President,
Federated
Investment
Management
Company and
Federated
Investment Counseling,
Federated
Global
Investment
Management
Corp. and
Passport
Research, Ltd.;
Executive
Vice President
and
Director,
Federated
Securities Corp.; Trustee,
Federated
Shareholder
Services Company.
JOHN W. MCGONIGLE Executive Vice President $0 $0 for the
Trust
Birth Date: October 26, 1938 and Secretary of the and 54 other
investment
Federated Investors Tower Federated Fund Complex; companies in
the
1001 Liberty Avenue Executive Vice President, Fund
Complex
Pittsburgh, PA Secretary and Director,
EXECUTIVE VICE PRESIDENT Federated Investors, Inc.;
and SECRETARY Trustee,
Federated
Investment
Management
Company and
Federated
Investment Counseling;
Director, Federated
Global
Investment
Management
Corp., Federated
Services
Company and
Federated
Securities Corp.
RICHARD J. THOMAS Treasurer of the Federated $0 $0 for the
Trust
Birth Date: June 17, 1954 Fund Complex; Vice and 54 other
investment
Federated Investors Tower President-Funds Financial companies in
the
1001 Liberty Avenue Services Division, Fund
Complex
Pittsburgh, PA Federated Investors, Inc.;
TREASURER formerly:
various
management
positions
within Funds
Financial
Services Division
of
Federated Investors, Inc.
RICHARD B. FISHER President or Vice $0 $0 for the
Trust
Birth Date: May 17, 1923 President of some of the and 6 other
investment
Federated Investors Tower Funds in the Federated Fund companies in
the
1001 Liberty Avenue Complex; Director or Fund
Complex
Pittsburgh, PA Trustee of some of
the
VICE PRESIDENT Funds in the Federated
Fund
Complex; Executive
Vice
President,
Federated
Investors, Inc.;
Chairman
and Director,
Federated
Securities Corp.

<CAPTION>
NAME
TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND
COMPLEX
<S> <C> <C>
<C>
WILLIAM D. DAWSON, III Chief Investment Officer $0 $0 for the
Trust
Birth Date: March 3, 1949 of this Fund and various and 41 other
investment
Federated Investors Tower other Funds in the companies in
the
1001 Liberty Avenue Federated Fund Complex; Fund
Complex
Pittsburgh, PA Executive Vice President,
CHIEF INVESTMENT OFFICER Federated
Investment
Counseling,
Federated
Global
Investment
Management Corp.,
Federated
Investment
Management Company
and
Passport Research, Ltd.;
Registered Representative,
Federated
Securities
Corp.; Portfolio Manager,
Federated
Administrative
Services; Vice President,
Federated Investors, Inc.;
formerly: Executive
Vice
President and Senior
Vice
President,
Federated
Investment
Counseling
Institutional
Portfolio
Management
Services
Division; Senior
Vice
President,
Federated
Investment
Management
Company and
Passport
Research, Ltd.
DEBORAH A. CUNNINGHAM Deborah A. Cunningham is $0 $0 for the
Trust
Birth Date: September 15, 1959 Vice President of the and 6 other
investment
Federated Investors Tower Trust. Ms. Cunningham companies in
the
1001 Liberty Avenue joined Federated in 1981 Fund
Complex
Pittsburgh, PA and has been a
Senior
VICE PRESIDENT Portfolio Manager and
a
Senior Vice President
of
the Funds' Adviser
since
1997. Ms.
Cunningham
served as a
Portfolio
Manager and a
Vice
President of the
Adviser
from 1993 until 1996.
Ms. Cunningham is
a
Chartered
Financial
Analyst and received
her
M.B.A. in Finance
from
Robert Morris College.
MARY JO OCHSON Mary Jo Ochson is Vice $0 $0 for the
Trust
Birth Date: September 12, 1953 President of the Trust. and 7 other
investment
Federated Investors Tower Ms. Ochson joined companies in
the
1001 Liberty Avenue Federated in 1982 and has Fund
Complex
Pittsburgh, PA been a Senior
Portfolio
VICE PRESIDENT Manager and a Senior
Vice
President of the
Funds'
Adviser since 1996.
From
1988 through 1995,
Ms. Ochson served as
a
Portfolio Manager and
a
Vice President of
the
Funds' Adviser. Ms.
Ochson
is a Chartered
Financial
Analyst and received
her
M.B.A. in Finance from
the
University of Pittsburgh.

</TABLE>

* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.

++ Messrs. Cunningham, Mansfield and Walsh became members of the Board on
January 1, 1999. Mr. Constantakis became a member of the Board on
October 1, 1999. Messrs. Cunningham, Mansfield and Walsh did not earn
any fees for serving the Federated Fund Complex since these fees are
reported as of the end of the last calendar year.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for the
Funds.

The Adviser is a wholly owned subsidiary of Federated.

OTHER RELATED SERVICES

BROKERAGE TRANSACTIONS

ADMINISTRATOR

<TABLE>

MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE FEDERATED FUNDS
<S> <C>
0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million

</TABLE>

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Funds' portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

CUSTODIAN

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by
shareholders.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants for the Treasury Fund, Arthur Andersen LLP,
plans and performs its audit so that it may provide an opinion as to whether the
Fund's financial statements and financial highlights are free of material
misstatement.

INDEPENDENT AUDITORS

FEES PAID BY THE FUND FOR SERVICES

ADVISORY FEE
SHAREHOLDER
ADVISORY FEE REDUCTION ADMINISTRATIVE FEE SERVICES
FEE
FOR THE YEAR ENDED JANUARY 31 1999 1998 1997 1 1999 1998 1997 1 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Municipal Fund $ 803,037 $ 447,960 $ 76,352 $ 302,822 $ 190,864 $ 19,609 $
69,567
636,478 447,960 76,352
Prime Cash Fund 4,676,382 3,485,448 911,504 1,762,996 1,315,415 30,284
236,964
2,853,923 2,107,753 505,519
Prime Value Fund 3,264,534 1,821,778 202,835 1,230,729 687,478 78,894
117,109
2,420,288 1,553,105 166,441

ADVISORY FEE SHAREHOLDER
ADVISORY FEE REDUCTION ADMINISTRATIVE FEE SERVICES FEE
FOR THE PERIOD ENDED JULY 31 1999 2 1999 2 1999 2
Municipal Fund $ 516,311 $ 194,649 $ 37,680
446,031
Prime Cash Fund 3,622,592 1,365,717 251,979
2,260,468
Prime Value Fund 2,380,186 897,330 120,975
1,769,715

ADVISORY FEE SHAREHOLDER
ADVISORY FEE REDUCTION ADMINISTRATIVE FEE SERVICES
FEE
FOR THE YEAR ENDED JULY 31 1999 1998 1997 1999 1998 1997
1999

Treasury Fund $ 22,626,298 $ 19,318,524 $ 13,886,919 $ 8,530,115 $ 7,285,996 $ 5,244,250
$345,415
9,896,725 13,886,919
6,879,101

</TABLE>

2 The Fund has changed its fiscal year-end from January 31 to July 31.

Fees are allocated among classes based on their pro rata share of Fund assets,
except for shareholder services fees, which are borne only by the applicable
class of Shares.

How Do the Funds Measure Performance?

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns are given for the one-year, five-year and Start of Performance
periods ended July 31, 1999.

Yield and Effective Yield are given for the 7-day period ended July 31, 1999.

Performance of the Municipal Fund, the Prime Cash Fund and the Prime Value Fund
shown are prior to the Funds' reorganization as portfolios of the Trust on
November 1, 1999.

<TABLE>

START OF
PERFORMANCE ON
7-DAY PERIOD 1 YEAR 5 YEAR FEBRUARY 8, 1993
MUNICIPAL FUND
<S> <C> <C> <C> <C>
Total Return - 3.23% 3.49% 3.24%
Yield 3.10% - - -
Effective Yield 3.15% - - -
Tax-Equivalent Yield 5.13% - - -

<CAPTION>
START OF
PERFORMANCE ON
7-DAY PERIOD 1 YEAR OCTOBER 6, 1994
PRIME CASH FUND
<S> <C> <C> <C>
Total Return - 5.03% 5.41%
Yield 4.84% - -
Effective Yield 4.96% - -

<CAPTION>
START OF
PERFORMANCE ON
7-DAY PERIOD 1 YEAR 5 YEAR FEBRUARY 8, 1993
PRIME VALUE FUND
<S> <C> <C> <C> <C>
Total Return - 5.06% 5.42% 4.93%
Yield 4.87% - - -
Effective Yield 4.99% - - -

<CAPTION>
START OF
PERFORMANCE ON
7-DAY PERIOD 1 YEAR APRIL 14, 1997
TREASURY FUND
<S> <C> <C> <C>
Total Return - 4.81% 5.15%
Yield 4.69% - -
Effective Yield 4.80% - -

</TABLE>

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.

YIELD, EFFECTIVE YIELD AND TAX-EQUIVALENT YIELD

The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
Share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional Shares purchased with
dividends earned from the original one Share and all dividends declared on the
original and any purchased Shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base period return; and multiplying the base period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result. The tax-equivalent yield
of Shares is calculated similarly to the yield, but is adjusted to reflect the
taxable yield that Shares would have had to earn to equal the actual yield,
assuming a specific tax rate.

TAX EQUIVALENCY TABLE

<TABLE>

TAXABLE YIELD EQUIVALENT FOR
1999
MULTISTATE MUNICIPAL
FUND
FEDERAL INCOME TAX BRACKET: 15.00% 28.00% 31.00% 36.00%
39.60%
<S> <C> <C> <C>
<C> <C>
Joint Return $1-43,050 $43,051-104,050 $104,051-158,550 $158,551-283,150
Over 283,150
Single Return $1-25,750 $25,751-62,450 $62,451-130,250 $130,251-283,150
Over 283,150
TAX EXEMPT YIELD: TAXABLE YIELD EQUIVALENT:
1.00% 1.18% 1.39% 1.45%
1.56% 1.66%
1.50% 1.76% 2.08% 2.17%
2.34% 2.48%
2.00% 2.35% 2.78% 2.90%
3.13% 3.31%
2.50% 2.94% 3.47% 3.62%
3.91% 4.14%
3.00% 3.53% 4.17% 4.35%
4.69% 4.97%
3.50% 4.12% 4.86% 5.07%
5.47% 5.79%
4.00% 4.71% 5.56% 5.80%
6.25% 6.62%
4.50% 5.29% 6.25% 6.52%
7.03% 7.45%
5.00% 5.88% 6.94% 7.25%
7.81% 8.28%
5.50% 6.47% 7.64% 7.97%
8.59% 9.11%
6.00% 7.06% 8.33% 8.70%
9.38% 9.93%
6.50% 7.65% 9.03% 9.42%
10.16% 10.76%
7.00% 8.24% 9.72% 10.14%
10.94% 11.59%
7.50% 8.82% 10.42% 10.87%
11.72% 12.42%
8.00% 9.41% 11.11% 11.59%
12.50% 13.25%

</TABLE>

Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Funds; and

* information about the mutual fund industry from sources such as the Investment
Company Institute.

The Funds may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

LIPPER ANALYTICAL SERVICES, INC.

Lipper Analytical Services, Inc., ranks funds in various fund categories based
on total return, which assumes the reinvestment of all income dividends and
capital gains distributions, if any.

IBC/DONOGHUE'S MONEY FUND REPORT

MONEY

Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.

SALOMON 30-DAY CD INDEX

Salomon 30-Day CD Index compares rate levels of 30-day certificates of deposit
from the top ten prime representative banks.

SALOMON 30-DAY TREASURY BILL INDEX

Salomon 30-Day Treasury Bill Index is a weekly quote of the most representative
yields for selected securities, issued by the U.S. Treasury, maturing in 30
days.

DISCOUNT CORPORATION OF NEW YORK 30-DAY FEDERAL AGENCIES

Discount Corporation of New York 30-Day Federal Agencies is a weekly quote of
the average daily offering price for selected federal agency issues maturing in
30 days.

BANK RATE MONITOR(C) NATIONAL INDEX

Who is Federated Investors, Inc.?

FEDERATED FUNDS OVERVIEW

MUNICIPAL FUNDS

EQUITY FUNDS

CORPORATE BOND FUNDS

GOVERNMENT FUNDS

MONEY MARKET FUNDS

MUTUAL FUND MARKET

FEDERATED CLIENTS OVERVIEW

Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

INSTITUTIONAL CLIENTS

BANK MARKETING

BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES

Financial Information

The Financial Statements for the Funds for the fiscal year ended July 31, 1999
are incorporated herein by reference to the Annual Reports to Shareholders of
the Funds dated July 31, 1999.

Investment Ratings

STANDARD & POOR'S SHORT-TERM MUNICIPAL OBLIGATION RATINGS

A Standard & Poor's (S&P) note rating reflects the liquidity concerns and market
access risks unique to notes.

SP-1-Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
sign (+) designation.

SP-2-Satisfactory capacity to pay principal and interest.

VARIABLE RATE DEMAND NOTES AND TENDER OPTION BONDS RATINGS

COMMERCIAL PAPER RATINGS

An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.

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.

LONG-TERM DEBT RATINGS

AAA-Debt rated AAA has the highest rating assigned by S&P. 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.

MOODY'S INVESTORS SERVICE SHORT-TERM MUNICIPAL OBLIGATION RATINGS

Moody's Investors Service, Inc. (Moody's) short-term ratings are designated
Moody's Investment Grade (MIG or VMIG). (See below.) The purpose of the MIG or
VMIG ratings is to provide investors with a simple system by which the relative
investment qualities of short-term obligations may be evaluated.

MIG1-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.

MIG2-This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.

VARIABLE RATE DEMAND NOTES AND TENDER OPTION BONDS RATINGS

COMMERCIAL PAPER RATINGS

LONG-TERM DEBT RATINGS

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 risks appear somewhat larger than in Aaa securities.

NR(1)-The underlying issuer/obligor/guarantor has other outstanding debt rated
AAA by S&P or Aaa by Moody's.

NR(2)-The underlying issuer/obligor/guarantor has other outstanding debt rated
AA by S&P or Aa by Moody's.

NR(3)-The underlying issuer/obligor/guarantor has other outstanding debt rated A
by S&P or Moody's.

FITCH IBCA, INC. SHORT-TERM DEBT RATING DEFINITIONS

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
for timely payment, only slightly less in degree than issues rated F-1+.

F-2-Good Credit Quality. Issues carrying 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.

Addresses

MONEY MARKET OBLIGATIONS TRUST

Municipal Obligations Fund

Prime Cash Obligations Fund

Prime Value Obligations Fund

Treasury Obligations Fund

Institutional Capital Shares

Federated Investors Funds

5800 Corporate Drive

Pittsburgh, PA 15237-7000

DISTRIBUTOR

Federated Securities Corp.

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Investment Management Company

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company

P.O. Box 8600

Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP

225 Franklin Street

Boston, MA 02110-2812

INDEPENDENT AUDITORS

Ernst & Young LLP

200 Clarendon Street

Boston, MA 02116-5072

PART C. OTHER INFORMATION.
Item 23 Exhibits:

(a) (i) Conformed copy of Declaration of Trust of the
Registrant; (12)
(ii) Conformed copy of Amendment No. 1 to the Declaration of
Trust of the Registrant; (12)
(iii) Conformed copy of Amendment No. 2 to the Declaration of
Trust of the Registrant; (17)
(iv) Conformed copy of Amendment No. 3 to the Declaration of
Trust of the Registrant; (17)
(v) Conformed copy of Amendment No. 4 to the Declaration of
Trust of the Registrant; (17)
(vi) Conformed copy of Amendment No. 5 to the Declaration of
Trust of the Registrant; (17)
(vii) Conformed copy of Amendment No. 6 to the Declaration of
Trust of the Registrant; (17)
(viii) Conformed copy of Amendment No. 8 to the Declaration of
Trust of the Registrant; (10)
(ix) Conformed copy of Amendment No. 9 to the Declaration of
Trust of the Registrant; (15)
(x) Conformed copy of Amendment No. 10 to the Declaration of
Trust of the Registrant; (16)
(xi) Conformed copy of Amendment No. 11 to the Declaration of
Trust of the Registrant; (21)
(xii) Conformed copy of Amendment No. 12 to the Declaration of
Trust of the Registrant; (21)
(xiii) Conformed copy of Amendment No. 13 to the Declaration of
Trust of the Registrant; +
(b) (i) Copy of By-Laws of the Registrant; (12)
(ii) Copy of Amendment No. 1 to By-Laws of the
Registrant; (17)
(iii) Copy of Amendment No. 2 to By-Laws of the Registrant; (17)
(iv) Copy of Amendment No. 3 to By-Laws of the Registrant; (17)
(v) Copy of Amendment No. 4 to By-Laws of the Registrant; (17)
(c) (i) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant; (8)

+ All exhibits filed electronically.

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed June 1, 1994. (File Nos. 33-31602 and
811-5950).

10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed February 21, 1995. (File Nos. 33-31602
and 811-5950).

12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950).

15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed September 23, 1996. (File Nos. 33-31602
and 811-5950).

16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950).

17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed September 28, 1998. (File Nos. 33-31602
and 811-5950).

21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).

<PAGE>

(ii) Copies of Specimen Certificates for Shares of Beneficial
Interest of Automated Cash ...Management Trust - Cash II
Shares and Institutional Service Shares; (16)
(iii)Copies of Specimen Certificates for Shares of Beneficial Interest
of Treasury Obligations .....Fund - Institutional Capital Shares;
(16)
(d) (i) Conformed copy of Investment Advisory Contract of the
Registrant; (12)
(ii) Conformed copy of Exhibit A to the Investment Advisory
Contract of the Registrant; (12)
(iii) Conformed copy of Exhibit B to the Investment Advisory
Contract of the Registrant; (12)
(iv) Conformed copy of Exhibit D to the Investment Advisory
Contract of the Registrant; (12)
(v) Conformed copy of Exhibit E to the Investment Advisory
Contract of the Registrant; (12)
(vi) Conformed copy of Exhibit G to the Investment Advisory
Contract of the Registrant; (12)
(vii) Conformed copy of Exhibit H to the Investment Advisory
Contract of the Registrant; (21)
(viii) Conformed copy of Exhibit I to the Investment Advisory
Contract of the Registrant; (21)
(ix) Conformed copy of Exhibit J to the Investment Advisory
Contract of the Registrant; (21)
(x) Conformed copy of Exhibit K to the Investment Advisory
Contract of the Registrant; (21)
(xi) Conformed copy of Exhibit L to the Investment Advisory
Contract of the Registrant; (21)
(xii) Conformed copy of Exhibit M to the Investment Advisory
Contract of the Registrant; (21)
(xiii) Conformed copy of Exhibit N to the Investment Advisory
Contract of the Registrant; (21)
(xiv) Conformed copy of Exhibit O to the Investment Advisory
Contract of the Registrant; (21)
(xv) Conformed copy of Exhibit P to the Investment Advisory
Contract of the Registrant; (21)
(xvi) Conformed copy of Exhibit Q to the Investment Advisory
Contract of the Registrant; (21)
(xvii) Conformed copy of Exhibit R to the Investment Advisory
Contract of the Registrant; (21)
(xviii) Conformed copy of Exhibit S to the Investment Advisory
Contract of the Registrant; +
(e) (i) Conformed copy of Distributor's Contract of the
Registrant; (7)
(ii) Conformed copy of Exhibit A to the Distributor's Contract of
the Registrant; (21)
(iii) Conformed copy of Exhibit C to the Distributor's Contract of
the Registrant; (21)

+ All exhibits filed electronically.

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed May 6, 1994. (File Nos. 33-31602 and
811-5950).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).

<PAGE>

(iv) Conformed copy of Exhibit D to the Distributor's Contract of
the Registrant; (15)
(v) Conformed copy of Exhibit E to the Distributor's Contract of
the Registrant; (16)
(vi) Conformed copy of Exhibit F to the Distributor's Contract of
the Registrant; (16)
(vii)Conformed copy of Exhibit G to the Distributor's Contract
of the Registrant; (21)
(viii) Conformed copy of Exhibit H to the Distributor's Contract
of the Registrant; (21)
(ix) Conformed copy of Exhibit I to the Distributor's Contract of
the Registrant; (21)
(x) Conformed copy of Exhibit J to the Distributor's Contract of
the Registrant; +
(xi) Conformed copy of Distributor's Contract of the Registrant
(Liberty U.S. Government Money Market Trust - Class B
Shares); +
(xii) The Registrant hereby incorporates
the conformed copy of the specimen
Mutual Funds Sales and Service
Agreement; Mutual Funds Service
Agreement; and Plan Trustee/ Mutual
Funds Service Agreement from Item
24(b)(6) of the Cash Trust Series
II Registration Statement on Form
N-1A filed with the Commission on
July 24, 1995.
(File Nos. 33-38550 and 811-6269).
(f) Not applicable;
(g) (i) Conformed copy of Custodian Agreement of the Registrant;
(8)
(ii) Conformed copy of Custodian Fee Schedule; (17)
(h) (i) Conformed copy of Amended and Restated Agreement for
Fund Accounting Services, Administrative Services, Transfer
Agency Services and Custody Services Procurement; (21)
(ii) Conformed copy of Amended and Restated Shareholder Services
Agreement of the Registrant; (21)
(iii)Conformed copy of Principal Shareholder Services Agreement
(Liberty U.S. Government Money Market Trust - Class B
Shares);+

+ All exhibits filed electronically.

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed June 1, 1994. (File Nos. 33-31602 and
811-5950).

15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed September 23, 1996. (File Nos. 33-31602
and 811-5950).

16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950).

17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed September 28, 1998. (File Nos. 33-31602
and 811-5950).

21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).

<PAGE>

(iv) Conformed copy of Shareholder Services Agreement
(Liberty U.S. Government Money Market Trust -
Class B Shares);+
(v) The responses described in Item 23(e)(xii) are hereby
incorporated by reference.
(vi) The Registrant hereby incorporates by reference the
conformed copy of the
Shareholder Services Sub-Contract
between Fidelity and Federated
Shareholder Services from Item
24(b)(9)(iii) of the Federated GNMA
Trust Registration Statement on
Form N-1A, filed with the
Commission on March 25, 1996 (File
Nos.
2-75670 and 811-3375).
(i) Conformed copy of Opinion and Consent of Counsel as to
legality of shares being registered; (12)
(j) (i) Conformed copy of Consent of Arthur Andersen LLP for:
(a) Automated Cash Management Trust; (22)
(b) Federated Short-Term U.S. Government Trust;
(19)
(c) Government Obligations Fund; +
(d) Government Obligations Tax-Managed Fund; +
(e) Prime Obligations Fund; +
(f) Tax-Free Obligations Fund; +
(g) Treasury Obligations Fund; +
(h) Trust for Government Cash Reserves; (19)
(ii) Conformed copy of Consent of Ernst & Young LLP for:
(a) Automated Government Cash Reserves; (21)
(b) Automated Treasury Cash Reserves; (21)
(c) Municipal Obligations Fund; +
(d) Prime Cash Obligations Fund; +
(e) Prime Value Obligations Fund; +
(f) U.S. Treasury Cash Reserves; (21)
(g) Trust for U.S. Treasury Obligations; (22)
(iii) Conformed copy of Consent of Deloitte & Touche LLP for:
(a) Automated Government Money Trust; (22)
(b) Federated Master Trust; (19)
(c) Liquid Cash Trust; (20)
(d) Trust for Short-Term U.S. Government
Securities (19)
(k) Not applicable;
(l) Conformed copy of Initial Capital Understanding; (12)

+ All exhibits filed electronically.

12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950).

19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed April 26, 1999. (File Nos. 33-31602 and
811-5950).

20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed May 25, 1999. (File Nos. 33-31602 and
811-5950).

21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).

22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 35 on Form N-1A filed September 28, 1999. (File Nos. 33-31602
and 811-5950).

<PAGE>

(m) (i) Conformed copy of Distribution Plan of the
Registrant; (16)
(ii) Conformed copy of Exhibit A to the Distribution Plan
of the Registrant; (16)
(iii) Conformed copy of Exhibit B to the Distribution Plan
of the Registrant; (21)
(iv) The responses described in Item
23(e)(xii) are hereby incorporated
by reference.
(n) The Registrant hereby incorporates the
conformed copy of the specimen Multiple
Class Plan from Item 24(b)(18) of the World
Investment Series, Inc. Registration
Statement on Form N-1A, filed with the
Commission on January 26, 1996. (File Nos.
33-52149 and 811-07141).
(o) (i) Conformed copy of Power of Attorney of the
Registrant; +
(ii) Conformed copy of Power of Attorney of
Chief Investment Officer of the Registrant; +
(iii) Conformed copy of Power of Attorney of Treasurer of
the Registrant; (18)
(iv) Conformed copy of Power of Attorney of Trustee of the
Registrant; +
(v) Conformed copy of Power of Attorney of Trustee of the
Registrant; +
(vi) Conformed copy of Power of Attorney of Trustee of the
Registrant; +

Item 24. Persons Controlled by or Under Common Control with the Fund:

None

Item 25. Indemnification: (1)

+ All exhibits filed electronically.

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed October 20, 1989. (File Nos. 33-31602 and
811-5950).

16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950).

18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed February 12, 1999. (File Nos. 33-31602
and 811-5950).

21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).

<PAGE>

Item 26. Business and Other Connections of the Investment Adviser:

For a description of the other business of the investment adviser,
see the section entitled "Who Manages the Fund?" in Part A. The
affiliations with the Registrant of four of the Trustees and one
of the Officers of the investment adviser are included in Part B
of this Registration Statement under "Who Manages and Provides
Services to the Fund?" The remaining Trustee of the investment
adviser, his position with the investment adviser, and, in
parentheses, his principal occupation is: Mark D. Olson (Partner,
Wilson, Halbrook & Bayard), 107 W. Market Street, Georgetown,
Delaware 19947.

The remaining Officers of the investment adviser are:

Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden

Senior Vice Presidents: Joseph M. Balestrino
David A. Briggs
Drew J. Collins
Jonathan C. Conley
Deborah A. Cunningham
Mark E. Durbiano
Jeffrey A. Kozemchak
Sandra L. McInerney
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski

Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
G. Andrew Bonnewell
Micheal W. Casey
Robert E. Cauley
Alexandre de Bethmann
B. Anthony Delserone, Jr.
Michael P. Donnelly
Linda A. Duessel
Donald T. Ellenberger
Kathleen M. Foody-Malus
Thomas M. Franks
James E. Grefenstette
Marc Halperin
Patricia L. Heagy
Susan R. Hill
William R. Jamison
Constantine J. Kartsonas
Robert M. Kowit
Richard J. Lazarchic
Steven Lehman
Marian R. Marinack
William M. Painter
Jeffrey A. Petro
Keith J. Sabol
Frank Semack
Aash M. Shah
Michael W. Sirianni, Jr.
Christopher Smith
Edward J. Tiedge
Leonardo A. Vila
Paige M. Wilhelm
George B. Wright

<PAGE>

Assistant Vice Presidents: Arminda Aviles
Nancy J. Belz
Lee R. Cunningham, II
James H. Davis, II
Jacqueline A. Drastal
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
Gary E. Farwell
Eamonn G. Folan
John T. Gentry
John W. Harris
Nathan H. Kehm
John C. Kerber
Grant K. McKay
Christopher Matyszewski
Natalie F. Metz
Thomas Mitchell
Joseph M. Natoli
Trent Neville
Ihab Salib
Roberto Sanchez-Dahl, Sr.
James W. Schaub
John Sheehy
John Sidawi
Matthew K. Stapen
Diane Tolby
Timothy G. Trebilcock
Steven J. Wagner
Lori A. Wolff

Secretary: G. Andrew Bonnewell

Treasurer: Thomas R. Donahue

Assistant Secretaries: C. Grant Anderson
Karen M. Brownlee
Leslie K. Ross

Assistant Treasurer: Dennis McAuley, III

The business address of each of the Officers of the investment
adviser is Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779. These individuals are also
officers of a majority of the investment advisers to the
investment companies in the Federated Fund Complex described in
Part B of this Registration Statement.

<PAGE>

Item 27. Principal Underwriters:

(a)......Federated Securities Corp. the Distributor for shares of the
Registrant, acts as principal underwriter for the following
.............open-end investment companies, including the Registrant:

Cash Trust Series II; Cash Trust Series, Inc.; CCB Funds; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fund for U.S. Government Securities, Inc.; Federated GNMA Trust; Federated
Government Income Securities, Inc.; Federated Government Trust; Federated High
Income Bond Fund, Inc.; Federated High Yield Trust; Federated Income Securities
Trust; Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Insurance Series; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.; Federated
U.S. Government Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years; Federated U.S. Government
Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; Fixed Income
Securities, Inc.; ; Hibernia Funds; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Managed Series Trust; Marshall Funds, Inc.; Money Market Management, Inc.; Money
Market Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds;
SouthTrust Funds; Tax-Free Instruments Trust; The Planters Funds; The Wachovia
Funds; The Wachovia Municipal Funds; Vision Group of Funds, Inc.; World
Investment Series, Inc.; Blanchard Funds; Blanchard Precious Metals Fund, Inc.;
DG Investor Series; High Yield Cash Trust; Investment Series Trust; Star Funds;
Targeted Duration Trust; The Virtus Funds; Trust for Financial Institutions;

Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Richard B. Fisher Chairman, Chief Executive Vice President
Federated Investors Tower Officer, Chief Operating
1001 Liberty Avenue Officer
Pittsburgh, PA 15222-3779 Federated Securities Corp.

Arthur L. Cherry Director --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales --
Federated Investors Tower and Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Treasurer
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

James F. Getz President-Broker/Dealer and --
Federated Investors Tower Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Ronald M. Petnuch Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Matthew W. Brown Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark Carroll Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Steven R. Cohen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert J. Deuberry Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark A. Gessner Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Tad Gullickson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dayna C. Haferkamp Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Christopher A. Layton Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael H. Liss Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Amy Michalisyn Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Larry Sebbens Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Segura Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert W. Bauman Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John T. Glickson Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy S. Johnson Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dennis McAuley Assistant Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

Item 28. Location of Accounts and Records:

All accounts and records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one of the following
locations:

Registrant Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(Notices should be sent to the Agent for Service at the above address)

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Federated Shareholder P.O. Box 8600
Services Company Boston, MA 02266-8600
("Transfer Agent and Dividend
Disbursing Agent")

Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Federated Investment Federated Investors Tower
Management Company 1001 Liberty Avenue
("Adviser") Pittsburgh, PA 15222-3779

State Street Bank and P.O. Box 8600
Trust Company Boston, MA 02266-8600
("Custodian")

Item 29. Management Services: Not applicable.

Item 30. Undertakings:

Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MONEY MARKET OBLIGATIONS TRUST,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on the
29th day of October, 1999.

MONEY MARKET OBLIGATIONS TRUST

BY: /s/ Leslie K. Ross
Leslie K. Ross, Assistant Secretary
Attorney in Fact for John F. Donahue
October 29, 1999

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:

NAME TITLE DATE

By: /s/ Leslie K. Ross
Leslie K. Ross Attorney In Fact October 29, 1999
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

John F. Donahue* Chairman and Trustee
(Chief Executive Officer)

J. Christopher Donahue* President and Trustee

Richard J. Thomas* Treasurer(Principal Financial and
Accounting Officer)

William D. Dawson, III* Chief Investment Officer

Thomas G. Bigley* Trustee

John T. Conroy, Jr.* Trustee

Nicholas P. Constantakis* Trustee

John F. Cunningham* Trustee

Lawrence D. Ellis, M.D.* Trustee

Peter E. Madden* Trustee

Charles F. Mansfield, Jr.* Trustee

John E. Murray, Jr., J.D., S.J.D.* Trustee

Marjorie P. Smuts* Trustee

John S. Walsh* Trustee

*By Power of Attorney

</TABLE>

Exhibit (a)(xiii) under Form N-1A
Exhibit 3(i) under Item 601/Reg. S-K

MONEY MARKET OBLIGATIONS TRUST

Amendment No. 13
DECLARATION OF TRUST
dated October 3, 1988

Effective September 1, 1999, this Declaration of Trust is amended as follows:

Strike the first paragraph of Section 5 of Article III from the
Declaration of Trust and substitute in its place the following:

"Section 5. Establishment and Designation of Series or Class."

Without limiting the authority of the Trustees set forth herein, to
establish and designate any additional series or class or to modify the rights
or preferences of any existing series or class, the series and classes have been
established and designated as:

Alabama Municipal Cash Trust
Arizona Municipal Cash Trust
Automated Cash Management Trust
Cash II Shares
Institutional Service Shares
Automated Government Cash Reserves
Automated Government Money Trust
Automated Treasury Cash Reserves
California Municipal Cash Trust
Connecticut Municipal Cash Trust
Federated Master Trust
Federated Short-Term U.S. Government Trust
Federated Tax-Free Trust
Florida Municipal Cash Trust
Cash II Shares
Institutional Shares
Georgia Municipal Cash Trust
Government Obligations Fund
Institutional Shares
Institutional Service Shares
Government Obligations Tax Managed Fund
Institutional Shares
Institutional Service Shares
Liberty U.S. Government Money Market Trust
Class A Shares
Class B. Shares
Liquid Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
Michigan Municipal Cash Trust
Minnesota Municipal Cash Trust
Cash Series Shares
Money Market Management, Inc.
Money Market Trust
Municipal Obligations Fund
New Jersey Municipal Cash Trust
Institutional Shares
New York Municipal Cash Trust
Cash II Shares
Institutional Service Shares
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Cash II Shares
Pennsylvania Municipal Cash Trust
Cash Series Shares
Prime Cash Obligations Fund
Prime Obligations Fund
Institutional Shares
Institutional Service Shares
Prime Value Obligations Fund
Tax-Free Instruments Trust
Tax-Free Obligations Fund
Institutional Shares
Institutional Service Shares
Tennessee Municipal Cash Trust
Treasury Obligations Fund
Institutional Shares
Institutional Service Shares
Institutional Capital Shares
Trust for Government Cash Reserves
Trust for Short-Term U.S. Government Securities
Trust for U.S. Treasury Obligations
U.S. Treasury Cash Reserves
Institutional Service Shares
Institutional Shares
Virginia Municipal Cash Trust

The establishment and designation of any series or class of shares in
addition to those established and designated above shall be effective upon the
execution by a majority of the then Trustees, without the need for Shareholder
approval, of an amendment tot his Declaration of Trust, taking the form of a
complete restatement or otherwise, setting forth such establishment and
designation and the relative rights and preferences of any such series or class,
or as otherwise provided in such instrument.

The undersigned hereby certify that the above-stated Amendment is a
true and correct Amendment to the Declaration of Trust, as adopted by the Board
of Trustees on the 19th day of May, 1999.

<PAGE>

WITNESS the due execution hereof this 19th day of August, 1999.

/s/ John F. Donahue /s/ Peter E. Madden
John F. Donahue Peter E. Madden

/s/ Thomas G. Bigley /s/ Charles F. Mansfield, Jr.
Thomas G. Bigley Charles F. Mansfield, Jr.

/s/ John T. Conroy, Jr. /s/ John E. Murray, Jr.
John T. Conroy, Jr. John E. Murray, Jr.

/s/ John F. Cunningham /s/ Marjorie P. Smuts
John F. Cunningham Marjorie P. Smuts

/s/ Lawrence D. Ellis, M.D. /s/ John S. Walsh
Lawrence D. Ellis, M.D. John S. Walsh

Exhibit (d)(xviii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

EXHIBIT S

FEDERATED TAX-FREE TRUST

For all services rendered by Adviser hereunder, the above-named Fund of
the Trust shall pay to Adviser and Adviser agrees to accept as full compensation
for all services rendered hereunder, an annual investment advisory fee equal to
.40 of 1% of the average daily net assets of the Fund.

The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .40 of 1% applied to the
daily net assets of the Fund.

The advisory fee so accrued shall be paid to Adviser daily.

Adviser shall reimburse the Fund (limited to the amount of the gross
investment advisory fee computed in accordance with the provisions of this
Exhibit S) in any fiscal year or portion thereof, the amount, if any, by which
the aggregate normal operating expenses of the Fund, including the gross
investment advisory fee but excluding interest, taxes, brokerage commissions,
expenses of registering and qualifying the Fund and its shares under Federal and
state laws, expenses of withholding taxes, and extraordinary expenses for such
fiscal year or portion thereof exceed .45 of 1% (or in the case of a portion of
a fiscal year, .0375 of 1% multiplied by the number of calendar months in such
period) of the average daily net assets of the Fund for such period. This
obligation does not include any expenses incurred by shareholders who choose to
avail themselves of the Transfer Agent's sub-accounting facilities. Such
reimbursement will be accounted for and adjusted annually in accordance with
generally accepted accounting principles and any Rules and Regulations of the
Securities and Exchange Commission applicable thereto.

Witness the due execution hereof this 1st day of September, 1999.

FEDERATED INVESTMENT
MANAGEMENT COMPANY

By: /s/ G. Andrew Bonnewell
Name: G. Andrew Bonnewell
Title: Vice President

MONEY MARKET OBLIGATIONS TRUST

By: /s/ Richard B. Fisher
Name: Richard B. Fisher
Title: Vice President

Exhibit (e)(x) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K

Exhibit J
to the
Distributor's Contract

Money Market Obligations Trust

Federated Tax-Free Trust

In consideration of the mutual covenants set forth in the Distributor's
Contract dated March 1, 1994, between Money Market Obligations Trust and
Federated Securities Corp., Money Market Obligations Trust executes and delivers
this Exhibit on behalf of the Fund set forth above.

Witness the due execution hereof this 1st day of September, 1999.

Money Market Obligations Trust

By: /s/ Richard B. Fisher
Name: Richard B. Fisher
Title: Vice President

Federated Securities Corp.

By: /s/ David M. Taylor
Name: David M. Taylor
Title: Executive Vice President

Exhibit (e)(xi) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K

DISTRIBUTOR'S CONTRACT

AGREEMENT made this 24th day of October, 1997, by and between
those Investment Companies on behalf of the Portfolios and Classes of
Shares listed on Schedule A to Exhibit 1, as may be amended from time
to time, having their principal place of business at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779, and who have
approved this form of Agreement, and FEDERATED SECURITIES CORP.
("FSC"), a Pennsylvania Corporation. Each of the Exhibits hereto is
incorporated herein in its entirety and made a part hereof. In the
event of any inconsistency between the terms of this Agreement and the
terms of any applicable Exhibit, the terms of the applicable Exhibit
shall govern.

In consideration of the mutual covenants hereinafter contained, it
is hereby agreed by and between the parties hereto as follows:

1. Each of the Investment Companies hereby appoint FSC as agent to sell
and distribute shares of the Investment Companies which may be
offered in one or more series (the "Funds") consisting of one or more
classes (the "Classes") of shares (the "Shares"), as described and
set forth on one or more exhibits to this Agreement, at the current
offering price thereof as described and set forth in the current
Prospectuses of the Funds. FSC hereby accepts such appointment and
agrees to provide such other services for the Investment Companies,
if any, and accept such compensation from the Investment Companies,
if any, as set forth in the applicable exhibits to this Agreement.

2. The sale of any Shares may be suspended without prior notice whenever
in the judgment of the applicable Investment Company it is in its
best interest to do so.

3. Neither FSC nor any other person is authorized by the Investment
Companies to give any information or to make any representation
relative to any Shares other than those contained in the
Registration Statement, Prospectuses, or Statements of Additional
Information ("SAIs") filed with the Securities and Exchange
Commission, as the same may be amended from time to time, or in
any supplemental information to said Prospectuses or SAIs
approved by the Investment Companies. FSC agrees that any other
information or representations other than those specified above
which it or any dealer or other person who purchases Shares
through FSC may make in connection with the offer or sale of
Shares, shall be made entirely without liability on the part of
the Investment Companies. No person or dealer, other than FSC, is
authorized to act as agent for the Investment Companies for any
purpose. FSC agrees that in offering or selling Shares as agent
of the Investment Companies, it will, in all respects, duly
conform to all applicable state and federal laws and the rules
and regulations of the National Association of Securities
Dealers, Inc., including its Rules of Fair Practice. FSC will
submit to the Investment Companies copies of all sales literature
before using the same and will not use such sales literature if
disapproved by the Investment Companies.

<PAGE>

4. This Agreement is effective with respect to each Class as of the
date of execution of the applicable exhibit and shall continue in
effect with respect to each Class presently set forth on an
exhibit and any subsequent Classes added pursuant to an exhibit
during the initial term of this Agreement for one year from the
date set forth above, and thereafter for successive periods of
one year if such continuance is approved at least annually by the
Trustees/Directors of the Investment Companies including a
majority of the members of the Board of Trustees/Directors of the
Investment Companies who are not interested persons of the
Investment Companies and have no direct or indirect financial
interest in the operation of any Distribution Plan relating to
the Investment Companies or in any related documents to such Plan
("Disinterested Trustees/Directors") cast in person at a meeting
called for that purpose. If a Class is added after the first
annual approval by the Trustees/Directors as described above,
this Agreement will be effective as to that Class upon execution
of the applicable exhibit and will continue in effect until the
next annual approval of this Agreement by the Trustees/Directors
and thereafter for successive periods of one year, subject to
approval as described above.

5. This Agreement may be terminated with regard to a particular Fund or
Class at any time, without the payment of any penalty, by the vote of
a majority of the Disinterested Trustees/Directors or by a majority
of the outstanding voting securities of the particular Fund or Class
on not more than sixty (60) days' written notice to any other party
to this Agreement.

6. This Agreement may not be assigned by FSC and shall automatically
terminate in the event of an assignment by FSC as defined in the
Investment Company Act of 1940, as amended, provided, however, that
FSC may employ such other person, persons, corporation or
corporations as it shall determine in order to assist it in carrying
out its duties under this Agreement.

7. FSC shall not be liable to the Investment Companies for anything done
or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence, or reckless disregard of
the duties imposed by this Agreement.

8. This Agreement may be amended at any time by mutual agreement in
writing of all the parties hereto, provided that such amendment is
approved by the Trustees/Directors of the Investment Companies
including a majority of the Disinterested Trustees/Directors of the
Investment Companies cast in person at a meeting called for that
purpose.

9. This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.

<PAGE>

10. (a) Subject to the conditions set forth below, the Investment
Companies agree to indemnify and hold harmless FSC and each
person, if any, who controls FSC within the meaning of Section 15
of the Securities Act of 1933 and Section 20 of the Securities
Act of 1934, as amended, against any and all loss, liability,
claim, damage and expense whatsoever (including but not limited
to any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever) arising out of
or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, any
Prospectuses or SAIs (as from time to time amended and
supplemented) or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading, unless such statement or
omission was made in reliance upon and in conformity with written
information furnished to the Investment Companies about FSC by or
on behalf of FSC expressly for use in the Registration Statement,
any Prospectuses and SAIs or any amendment or supplement thereof.

If any action is brought against FSC or any controlling
person thereof with respect to which indemnity may be sought
against any Investment Company pursuant to the foregoing
paragraph, FSC shall promptly notify the Investment Company
in writing of the institution of such action and the
Investment Company shall assume the defense of such action,
including the employment of counsel selected by the
Investment Company and payment of expenses. FSC or any such
controlling person thereof shall have the right to employ
separate counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of FSC or such
controlling person unless the employment of such counsel
shall have been authorized in writing by the Investment
Company in connection with the defense of such action or the
Investment Company shall not have employed counsel to have
charge of the defense of such action, in any of which events
such fees and expenses shall be borne by the Investment
Company. Anything in this paragraph to the contrary
notwithstanding, the Investment Companies shall not be
liable for any settlement of any such claim of action
effected without their written consent. The Investment
Companies agree promptly to notify FSC of the commencement
of any litigation or proceedings against the Investment
Companies or any of their officers or Trustees/Directors or
controlling persons in connection with the issue and sale of
Shares or in connection with the Registration Statement,
Prospectuses, or SAIs.

<PAGE>

(b) FSC agrees to indemnify and hold harmless the Investment
Companies, each of its Trustees/Directors, each of its officers
who have signed the Registration Statement and each other person,
if any, who controls the Investment Companies within the meaning
of Section 15 of the Securities Act of 1933, but only with
respect to statements or omissions, if any, made in the
Registration Statement or any Prospectus, SAI, or any amendment
or supplement thereof in reliance upon, and in conformity with,
information furnished to the Investment Companies about FSC by or
on behalf of FSC expressly for use in the Registration Statement
or any Prospectus, SAI, or any amendment or supplement thereof.
In case any action shall be brought against any Investment
Company or any other person so indemnified based on the
Registration Statement or any Prospectus, SAI, or any amendment
or supplement thereof, and with respect to which indemnity may be
sought against FSC, FSC shall have the rights and duties given to
the Investment Companies, and the Investment Companies and each
other person so indemnified shall have the rights and duties
given to FSC by the provisions of subsection (a) above.

(c) Nothing herein contained shall be deemed to protect any
person against liability to the Investment Companies or
their shareholders to which such person would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the duties of such person
or by reason of the reckless disregard by such person of the
obligations and duties of such person under this Agreement.

(d) Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940, as
amended, for Trustees/Directors, officers, FSC and controlling
persons of the Investment Companies by the Trustees/Directors
pursuant to this Agreement, the Investment Companies are aware of
the position of the Securities and Exchange Commission as set
forth in the Investment Company Act Release No. IC-11330.
Therefore, the Investment Companies undertakes that in addition
to complying with the applicable provisions of this Agreement, in
the absence of a final decision on the merits by a court or other
body before which the proceeding was brought, that an
indemnification payment will not be made unless in the absence of
such a decision, a reasonable determination based upon factual
review has been made (i) by a majority vote of a quorum of
non-party Disinterested Trustees/Directors, or (ii) by
independent legal counsel in a written opinion that the
indemnitee was not liable for an act of willful misfeasance, bad
faith, gross negligence or reckless disregard of duties. The
Investment Companies further undertakes that advancement of
expenses incurred in the defense of a proceeding (upon
undertaking for repayment unless it is ultimately determined that
indemnification is appropriate) against an officer,
Trustees/Directors, FSC or controlling person of the Investment
Companies will not be made absent the fulfillment of at least one
of the following conditions: (i) the indemnitee provides security
for his undertaking; (ii) the Investment Companies is insured
against losses arising by reason of any lawful advances; or (iii)
a majority of a quorum of non-party Disinterested
Trustees/Directors or independent legal counsel in a written
opinion makes a factual determination that there is reason to
believe the indemnitee will be entitled to indemnification.

<PAGE>

Error! Reference source not found.

11. If at any time the Shares of any Fund are offered in two or more
Classes, FSC agrees to adopt compliance standards as to when a class
of shares may be sold to particular investors.

12. This Agreement will become binding on the parties hereto upon the
execution of the attached exhibits to the Agreement.

<PAGE>

Exhibit 1 to the Distributor's Contract

The following provisions are hereby incorporated and made part of the
Distributor's Contract (the "Distributor's Contract") dated October 24, 1997,
between the Investment Companies and Federated Securities Corp. as principal
distributor (the "Principal Distributor") with respect to the Class B Shares of
the portfolios (the "Funds") set forth on the attached Schedule A. References
herein to this Distributor's Contract refer to the Distributor's Contract as
supplemented hereby and made applicable hereby to the Class B Shares of the
Funds. In the event of any inconsistency between the terms of this Exhibit and
the terms of the Distributor's Contract, the terms of this Exhibit will govern.
Once effective in respect of the Class of Shares of any Fund set forth above,
the Distributors Contract as amended by this Exhibit shall be effective in
respect of all shares of such class outstanding whether issued prior to or after
such effectiveness.

1. The Investment Companies hereby appoints the Principal Distributor to
engage in activities principally intended to result in the sale of
Class B Shares ("Class B Shares") of each Fund. Pursuant to this
appointment, the Principal Distributor is authorized to select a group
of financial institutions ("Financial Institutions") to sell Class B
Shares of a Fund at the current offering price thereof as described and
set forth in the respective prospectuses of the Fund.

2. (a) In consideration of the Principal Distributor's services under this
Distributor's Contract in respect of each Fund the Investment Companies on
behalf of the Fund agree: (I) to pay the Principal Distributor or at its
direction its "Allocable Portion" (as hereinafter defined) of a fee (the
"Distribution Fee") equal to 0.75 of 1% per annum of the average daily net
asset value of the Class B Shares of the Fund outstanding from time to
time, and (II) to withhold from redemption proceeds in respect of Class B
Shares of the Fund such Principal Distributor's Allocable Portion of the
Contingent Deferred Sales Charges ("CDSCs") payable in respect of such
redemption as provided in the Prospectus for the Fund and to pay the same
over to such Principal Distributor or at its direction at the time the
redemption proceeds in respect of such redemption are payable to the holder
of the Class B Shares redeemed.

(b) The Principal Distributor will be deemed to have performed all
services required to be performed in order to be entitled to
receive its Allocable Portion of the Distribution Fee payable in
respect of the Class B Shares of a Fund upon the settlement of
each sale of a "Commission Share" (as defined in the Allocation
Schedule attached hereto as Schedule B) of the Fund taken into
account in determining such Principal Distributor's Allocable
Portion of such Distribution Fees.

<PAGE>

(c) Notwithstanding anything to the contrary set forth in this
Exhibit, the Distributor's Contract or (to the extent waiver
thereof is permitted thereby) applicable law, the Investment
Companies' obligation to pay the Principal Distributor's
Allocable Portion of the Distribution Fees payable in respect of
the Class B Shares of a Fund shall not be terminated or modified
for any reason (including a termination of this Distributor's
Contract as it relates to Class B Shares of a Fund) except to the
extent required by a change in the Investment Company Act of 1940
(the "Act") or the Conduct Rules of the National Association of
Securities Dealers, Inc., in either case enacted or promulgated
after May 1, 1997, or in connection with a "Complete Termination"
(as hereinafter defined) of the Distribution Plan in respect of
the Class B Shares of a Fund.

(d) The Investment Companies will not take any action to waive or
change any CDSC in respect of the Class B Shares of a Fund, except
as provided in the Investment Companies' prospectus or statement
of additional information as in effect as of the date hereof
without the consent of the Principal Distributor and the permitted
assigns of all or any portion of its right to its Allocable
Portion of the CDSCs.

(e) Notwithstanding anything to the contrary set forth in this
Exhibit, the Distributor's Contract, or (to the extent waiver
thereof is permitted thereby) applicable law, neither the
termination of the Principal Distributor's role as principal
distributor of the Class B Shares of a Fund, nor the termination
of this Distributor's Contract nor the termination of the
Distribution Plan will terminate such Principal Distributor's
right to its Allocable Portion of the CDSCs in respect of the
Class B Shares of a Fund.

(f) Notwithstanding anything to the contrary in this Exhibit, the
Distributor's Contract, or (to the extent waiver thereof is
permitted thereby) applicable law, the Principal Distributor may
assign, sell or pledge (collectively, a "Transfer") its rights to
its Allocable Portion of the Distribution Fees and CDSCs earned
by it (but not its obligations to the Investment Companies under
this Distributor's Contract) in respect of the Class B Shares of
a Fund to raise funds to make the expenditures related to the
distribution of Class B Shares of the Fund and in connection
therewith upon receipt of notice of such Transfer, the Investment
Companies shall pay, or cause to be paid to the assignee,
purchaser or pledgee (collectively with their subsequent
transferees, "Transferees") such portion of the Principal
Distributor's Allocable Portion of the Distribution Fees and
CDSCs in respect of the Class B Shares of the Fund so
Transferred. Except as provided in (c) above and notwithstanding
anything to the contrary set forth elsewhere in this Exhibit, the
Distributor's Contract, or (to the extent waiver thereof is
permitted thereby) applicable law, to the extent the Principal
Distributor has Transferred its rights thereto to raise funds as
aforesaid, the Investment Companies' obligation to pay to the
Principal Distributor's Transferees the Principal Distributor's
Allocable Portion of the Distribution Fees payable in respect of
the Class B Shares of each Fund shall be absolute and
unconditional and shall not be subject to dispute, offset,
counterclaim or any defense whatsoever, including without
limitation, any of the foregoing based on the insolvency or
bankruptcy of the Principal Distributor (it being understood that
such provision is not a waiver of the Investment Companies' right
to pursue such Principal Distributor and enforce such claims
against the assets of such Principal Distributor other than the
Distributor's right to the Distribution Fees, CDSCs and servicing
fees, in respect of the Class B Shares of any Fund which have
been so transferred in connection with such Transfer). The Fund
agrees that each such Transferee is a third party beneficiary of
the provisions of this clause (f) but only insofar as those
provisions relate to Distribution Fees and CDSCs transferred to
such Transferee.

(g) For purposes of this Distributor's Contract, the term Allocable
Portion of Distribution Fees payable in respect of the Class B
Shares of any Fund shall mean the portion of such Distribution
Fees allocated to such Principal Distributor in accordance with
the Allocation Schedule attached hereto as Schedule B.

(h) For purposes of this Distributor's Contract, the term "Complete
Termination" of the Plan in respect of any Fund means a
termination of the Plan involving the complete cessation of the
payment of Distribution Fees in respect of all Class B Shares of
such Fund, and the termination of the distribution plans and the
complete cessation of the payment of distribution fees pursuant
to every other Distribution Plan pursuant to rule 12b-1 of the
Investment Companies in respect of such Fund and any successor
Fund or any Fund acquiring a substantial portion of the assets of
such Fund and for every future class of shares which has
substantially similar characteristics to the Class B Shares of
such Fund including the manner of payment and amount of sales
charge, contingent deferred sales charge or other similar charges
borne directly or indirectly by the holders of such shares.

3. The Principal Distributor may enter into separate written agreements
with various firms to provide certain of the services set forth in
Paragraph 1 herein. The Principal Distributor, in its sole discretion,
may pay Financial Institutions a lump sum fee on the settlement date
for the sale of each Class B Share of the Fund to their clients or
customers for distribution of such share. The schedules of fees to be
paid such firms or Financial Institutions and the basis upon which such
fees will be paid shall be determined from time to time by the
Principal Distributor in its sole discretion.

4. The Principal Distributor will prepare reports to the Board of
Trustees/Directors of the Investment Companies on a quarterly basis
showing amounts expended hereunder including amounts paid to Financial
Institutions and the purpose for such expenditures.

In consideration of the mutual covenants set forth in the Distributor's
Contract between the Investment Companies and the Principal Distributor, the
Principal Distributor and the Investment Companies hereby execute and deliver
this Exhibit with respect to the Class B Shares of the Fund.

<PAGE>

Witness the due execution hereof this 24th day of October, 1997.

ATTEST: INVESTMENT COMPANIES (listed on Schedule A)

By: /s/ S. Elliott Cohan By: /s/ John W. McGonigle
Title: Assistant Secretary` Title: Executive Vice President

ATTEST: FEDERATED SECURITIES CORP.

By: /s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President

<PAGE>

Schedule A to Exhibit 1

Liberty U.S. Government Money Market Trust - Class B Shares

Exhibit (h)(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

PRINCIPAL SHAREHOLDER SERVICER'S AGREEMENT

THIS AGREEMENT, is made as of the 24th day of October, 1997, by and
between those Investment Companies on behalf of the Portfolios (individually
referred to herein as a "Fund" and collectively as "Funds") and Classes of
Shares ("Classes") listed on Schedule A to Exhibit 1, as may be amended from
time to time, having their principal office and place of business at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779, and who have approved this
form of Agreement and Federated Securities Corp. as the principal shareholder
servicer (the "Principal Servicer"). Each of the Exhibits hereto is incorporated
herein in its entirety and made a part hereof. In the event of any inconsistency
between the terms of this Agreement and the terms of any applicable Exhibit, the
terms of the applicable Exhibit shall govern.

In consideration of the mutual covenants hereinafter contained it is
hereby agreed by and between the parties hereto as follows.

1. The Investment Companies hereby appoint the Principal Servicer as their
agent to select, negotiate and contract for the performance of and arrange
for the rendition of personal services to shareholders and/or the
maintenance of accounts of shareholders of each Class of the Funds as to
which this Agreement is made applicable (The Principal Servicer's duties
hereunder are referred to as "Services"). The Principal Servicer hereby
accepts such appointment and agrees to perform or cause to be performed the
Services in respect of the Classes of the Funds to which this Agreement has
been made applicable by an Exhibit. The Principal Servicer agrees to cause
to be provided shareholder services which, in its best judgment (subject to
supervision and control of the Investment Companies' Boards of Trustees or
Directors, as applicable), are necessary or desirable for shareholders of
the Funds. The Principal Servicer further agrees to provide the Investment
Companies, upon request, a written description of the shareholder services
for which the Principal Servicer is arranging hereunder.

2. During the term of this Agreement, each Investment Company will pay the
Principal Servicer and the Principal Servicer agrees to accept as full
compensation for its services rendered hereunder a fee as set forth on
the Exhibit applicable to the Class of each Fund subject to this
Agreement.

For the payment period in which this Agreement becomes effective or
terminates with respect to any Class of a Fund, there shall be an
appropriate proration of the monthly fee on the basis of the number of
days that this Agreement is in effect with respect to such Class of the
Fund during the month.

3. This Agreement is effective with respect to each Class of a Fund as of
the date of execution of the applicable Exhibit and shall continue in
effect for one year from the date of its execution, and thereafter for
successive periods of one year only if the form of this Agreement is
approved at least annually by the Board of each Investment Company,
including a majority of the members of the Board of the Investment
Company who are not interested persons of the Investment Company
("Independent Board Members") cast in person at a meeting called for
that purpose.

<PAGE>

4. Notwithstanding paragraph 3, this Agreement may be terminated with
regard to a particular Class of a Fund as follows:

(a) at any time, without the payment of any penalty, by the vote of
a majority of the Independent Board Members of any Investment
Company or by a vote of a majority of the outstanding voting
securities of any Fund as defined in the Investment Company Act
of 1940 on sixty (60) days' written notice to the parties to
this Agreement;

(b) automatically in the event of the Agreement's assignment as
defined in the Investment Company Act of 1940; and

5. The Principal Servicer agrees to arrange to obtain any taxpayer
identification number certification from each shareholder of the Funds
to which it provides Services that is required under Section 3406 of
the Internal Revenue Code, and any applicable Treasury regulations, and
to provide each Fund or its designee with timely written notice of any
failure to obtain such taxpayer identification number certification in
order to enable the implementation of any required backup withholding.

6. The Principal Servicer shall not be liable for any error of judgment or
mistake of law or for any loss suffered by any Investment Company in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. the Principal Servicer
shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for such Investment Company) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such
advice. Any person, even though also an officer, trustee, partner, employee
or agent of the Principal Servicer, who may be or become a member of such
Investment Company's Board, officer, employee or agent of any Fund, shall
be deemed, when rendering services to such Fund or acting on any business
of such Fund (other than services or business in connection with the duties
of the Principal Servicer hereunder) to be rendering such services to or
acting solely for such Fund and not as an officer, trustee, partner,
employee or agent or one under the control or direction of the Principal
Servicer even though paid by the Principal Servicer.

This Section 6 shall survive termination of this Agreement.

7. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which an enforcement of the change, waiver, discharge or
termination is sought.

8. The Principal Servicer is expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of each Investment
Company that is a Massachusetts business trust and agrees that the
obligations assumed by each such Investment Company pursuant to this
Agreement shall be limited in any case to such Investment Company and
its assets and that the Principal Servicer shall not seek satisfaction
of any such obligations from the shareholders of such Investment
Company, the Trustees, Officers, Employees or Agents of such Investment
Company, or any of them.

<PAGE>

9. The execution and delivery of this Agreement have been authorized by
the Directors of the Principal Servicer and signed by an authorized
officer of the Principal Servicer, acting as such, and neither such
authorization by such Directors nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually
or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the Directors
or shareholders of the Principal Servicer, but bind only the property
of the Principal Servicer as provided in the Articles of Incorporation
of the Principal Servicer.

10. Notices of any kind to be given hereunder shall be in writing
(including facsimile communication) and shall be duly given if
delivered to any Investment Company at the following address: Federated
Investors Tower, Pittsburgh, PA 15222-3779, Attention: President and if
delivered to the Principal Servicer at Federated Investors Tower,
Pittsburgh, PA 15222-3779, Attention: President.

11. This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof
whether oral or written. If any provision of this Agreement shall be held
or made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 3 and 4, hereof, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and shall be governed by Pennsylvania law;
provided, however, that nothing herein shall be construed in a manner
inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the Securities and Exchange Commission
thereunder.

12. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be
an original, and all such counterparts shall together constitute one
and the same instrument.

13. This Agreement shall not be assigned by any party without the prior
written consent of the Principal Servicer in the case of assignment by
any Investment Company, or of the Investment Companies in the case of
assignment by the Principal Servicer, except that any party may assign
to a successor all of or a substantial portion of its business to a
party controlling, controlled by, or under common control with such
party. Nothing in this Section 13 shall prevent the Principal Servicer
from delegating its responsibilities to another entity to the extent
provided herein.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.

<PAGE>

Investment Companies (listed on Schedule A)

Attest: /s/ S. Elliott Cohan By: /s/ John W. McGonigle
Title: Assistant Secretary Title: Executive Vice President

Federated Securities Corp.

Attest:/s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President

<PAGE>

Exhibit 1 to the Principal Shareholder Servicer's Agreement
Related to Class B Shares of the Funds

The following provisions are hereby incorporated and made part of the
Principal Shareholder Servicer's Agreement (the "Principal Shareholder
Servicer's Agreement") as of the 24th day of October, 1997, by and between those
Investment Companies on behalf of the Portfolios (individually referred to
herein as a "Fund" and collectively as "Funds") and Classes of Shares
("Classes") listed on Schedule A to Exhibit 1, as may be amended from time to
time, having their principal office and place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779, and who have approved this form of
Agreement and Federated Securities Corp. as the principal shareholder servicer
(the "Principal Servicer"). Each of the Exhibits hereto is incorporated herein
in its entirety and made a part hereof. In the event of any inconsistency
between the terms of this Exhibit and the terms of the Principal Shareholder
Servicer's Agreement, the terms of this Exhibit shall govern.

1. Each Investment Company hereby appoints the Principal Servicer to
arrange for the rendition of the shareholder services in respect of
Class B Shares ("Class B Shares") of each Fund. Pursuant to this
appointment, the Principal Servicer is authorized to select various
companies including but not limited to Federated Shareholder Services
("Companies or a Company ") to provide such services.

2. (a) In consideration of the Principal Servicer's Services under
this Agreement in respect of the Class B Shares each Fund agrees
to pay the Principal Servicer or at its direction its "Allocable
Portion" (as hereinafter defined) of a fee (the "Servicing Fee")
equal to 0.25 of 1% per annum of the average daily net asset
value of the Class B Shares of the Fund outstanding from time to
time, provided however, that in the event the Fund operates as a

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

fund of funds (a "FOF Fund") by investing the proceeds of the issuance
of its Class B Shares in Class A Shares of another fund (the
"Other Fund") and the Principal Shareholder Servicer receives a
servicing fee in respect of the Class A Shares of the Other Fund
so acquired by the FOF Fund, the Servicing Fee payable in respect
of such Class B Shares of the FOF Fund will be reduced by the
amount of the servicing fee actually received by the Principal
Shareholder Servicer or its assign from the Other Fund in respect
of the Class A Shares of the Other Fund acquired with the
proceeds of such Class B Shares of the FOF Fund.

(b) (i) The Principal Servicer will be deemed to have fully earned
its Allocable Portion (computed as of any date) of the Servicing
Fee payable in respect of the Class B Shares of a Fund (and to
have satisfied its obligation to arrange for shareholder services
in respect of such Class B Shares) on the date it has arranged
for shareholder services to be performed by Federated Shareholder
Services by payment of the lump sum contemplated by Alternative A
to Exhibit 1 to the Shareholder Services Agreement among the
Principal Servicer, Federated Shareholder Services and the Fund
dated as of the date hereof (the "Shareholder Services
Agreement") to Federated Shareholder Services (whose obligations
are fully supported by its parent company) in respect of each
"Commission Share" (as defined in the Allocation Schedule
attached hereto in Schedule B) of the Fund, taken into account in
determining such Principal Servicer's Allocable Portion of such
Servicing Fees as of such date. The Principal Servicer shall not
be deemed to have any other duties in respect of the Shares and
its Allocable Portion of the Servicing Fees to which the
preceding sentence applies and such arrangements shall be deemed
a separate and distinct contractual arrangement from that
described in clause (ii).

<PAGE>

(ii) The Principal Servicer will be deemed to have fully earned
any Servicing Fees not included in its Allocable Portion (i.e.,
those attributable to Shares in respect of which Alternative A
under Exhibit 1 to the Shareholder Services Agreement is not
applicable) as such services are performed in respect of such
Shares.

(c) Notwithstanding anything to the contrary set forth in this
Exhibit, the Principal Shareholder Agreement, or (to the extent
waiver thereof is permitted thereby) applicable law, each
Investment Company's obligation to pay the Principal Servicer's
Allocable Portion of the Servicing Fees payable in respect of the
Class B Shares of a Fund shall not be terminated or modified for
any reason (including a termination of this Principal Shareholder
Servicer's Agreement as it relates to the Fund) except to the
extent required by a change in the Investment Company Act of 1940
(the "Act") or the Conduct Rules of the National Association of
Securities Dealers, Inc., in either case enacted or promulgated
after May 1, 1997, or in connection with a "Complete Termination"
(as hereinafter defined) in respect of the Class B Shares of such
Fund.

(d) Notwithstanding anything to the contrary in this Exhibit, the
Principal Shareholder Agreement, or (to the extent waiver thereof
is permitted thereby) applicable law, the Principal Servicer may
assign, sell or pledge (collectively, "Transfer") its rights to
its Allocable Portion of the Servicing Fees (but not its
obligations to the Investment Companies under this Principal
Shareholder Servicer's Agreement) in respect of the Class B
Shares of a Fund to raise funds to make the expenditures related
to the Services and in connection therewith upon receipt of
notice of such Transfer, the Investment Company shall pay to the
assignee, purchaser or pledgee (collectively with their
subsequent transferees, "Transferees") such portion of the
Principal Servicer's Allocable Portion of the Servicing Fees in
respect of the Class B Shares of the Fund so Transferred. Except
as provided in (c) above and notwithstanding anything to the
contrary set forth elsewhere in this Exhibit, the Principal
Shareholder Agreement, or (to the extent waiver thereof is
permitted thereby) applicable law, to the extent the Principal
Servicer has Transferred its rights thereto to raise funds as
aforesaid, the Investment Companies' obligation to pay to the
Principal Servicer's Transferees the Principal Servicer's
Allocable Portion of the Servicing Fees payable in respect of the
Class B Shares of each Fund shall be absolute and unconditional
and shall not be subject to dispute, offset, counterclaim or any
defense whatsoever, including without limitation, any of the
foregoing based on the insolvency or bankruptcy of the Principal
Servicer, Federated Shareholder Services (or its parent) or the
failure of Federated Shareholder Services (or its parent) to
perform its Irrevocable Service Commitment (it being understood
that such provision is not a waiver of the Investment Companies'
right to pursue such Principal Servicer and enforce such claims
against the assets of such Principal Servicer other than the
Principal Servicer's right to the Distribution Fees, Servicing
Fees and CDSCs in respect of the Class B Shares of the Fund which
have been so transferred in connection with such Transfer). The
Fund agrees that each such Transferee is a third party
beneficiary of the provisions of this clause (d) but only insofar
as those provisions relate to Servicing Fees transferred to such
Transferee.

<PAGE>

(e) For purposes of this Principal Shareholder Servicer's Agreement,
the term Allocable Portion of Servicing Fees payable in respect of
the Class B Shares of any Fund shall mean the portion of such
Servicing Fees allocated to such Principal Servicer in accordance
with the Allocation Schedule attached hereto as Schedule B.

(f) For purposes of this Principal Shareholder Servicer's Contract,
the term "Complete Termination" of shareholder servicing
arrangements in respect of Class B Shares of a Fund means a
termination of shareholder servicing arrangements involving the
complete cessation of payments of Servicing Fees in respect of
all Class B Shares, and the complete cessation of payments of
servicing fees for every existing and future class of shares of
the Fund and any successor Fund or any Fund acquiring a
substantial portion of the assets of the Fund ,which has
substantially similar characteristics to the Class B Shares
taking into account the manner and amount of sales charge,
servicing fee, contingent deferred sales charge or other similar
charge borne directly or indirectly by the holders of such
shares.

3. The Principal Servicer may enter into separate written agreements with
Companies to provide the services set forth in Paragraph 1 herein. The
schedules of fees to be paid such Companies and the basis upon which
such fees will be paid shall be determined from time to time by the
Principal Servicer in its sole discretion.

4. The Principal Servicer will prepare reports to the Board of
Trustees/Directors of the Investment Companies on a quarterly basis
showing amounts expended hereunder including amounts paid to Companies
and the purpose for such expenditures.

In consideration of the mutual covenants set forth in the Principal
Shareholder Servicer's Contract, the Principal Servicer and the Investment
Companies hereby execute and deliver this Exhibit with respect to the Class B
Shares of each Fund.

<PAGE>

Witness the due execution hereof this 24th day of October, 1997.

ATTEST: INVESTMENT COMPANIES (listed on Schedule A)

By: /s/ S. Elliott Cohan By: /s/ John W. McGonigle
Title: Assistant Secretary Title: Executive Vice President

ATTEST: FEDERATED SECURITIES CORP.

By: /s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President

<PAGE>

Schedule A to Exhibit 1

Liberty U.S. Government Money Market Trust - Class B Shares

Exhibit (h)(iv) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

SHAREHOLDER SERVICES AGREEMENT

THIS AGREEMENT, is made as of the 24th day of October, 1997, by and
between those Investment Companies on behalf of the Portfolios (individually
referred to herein as a "Fund" and collectively as "Funds") and Classes of
Shares ("Classes") listed on Schedule A to Exhibit 1, as it may be amended from
time to time, having their principal office and place of business at Federated
Investors Tower, Pittsburgh, PA 15222-3779 and who have approved this form of
Agreement and Federated Securities Corp.("FSC"), a Pennsylvania Corporation,
having its principal office and place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779 and Federated Shareholder Services, a
Delaware business trust, having its principal office and place of business at
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 ("FSS"). Each of
the Exhibits hereto is incorporated herein in its entirety and made a part
hereof. In the event of any inconsistency between the terms of this Agreement
and the terms of any applicable Exhibit, the terms of the applicable Exhibit
shall govern.

1. FSC as Principal Servicer (Principal Servicer") hereby contracts with
FSS to render or cause to be rendered personal services to
shareholders and/or the maintenance of accounts of shareholders of
each Class of the Funds to which this Agreement is made applicable by
an Exhibit hereto ("Services"). In addition to providing Services
directly to shareholders of the Funds, FSS is hereby appointed the
Investment Companies' agent to select, negotiate and subcontract for
the performance of Services. FSS hereby accepts such appointment. FSS
agrees to provide or cause to be provided Services which, in its best
judgment (subject to supervision and control of the Investment
Companies' Boards of Trustees or Directors, as applicable), are
necessary or desirable for shareholders of the Funds. FSS further
agrees to provide the Investment Companies, upon request, a written
description of the Services which FSS is providing hereunder. The
Investment Companies, on behalf of the Funds and each Class subject
hereto consents to the appointment of FSS to act in its capacity as
described herein and agrees to look solely to FSS for performance of
the Services.

2. The term of the undertaking of FSS to render services hereunder in
respect of any Class of any Fund and the manner and amount of
compensation to be paid in respect thereof shall be specified in
respect of each Class of the Funds to which this Agreement is made
applicable by an Exhibit hereto. FSS agrees to look solely to the
Principal Servicer for its compensation hereunder.

3. This Agreement shall become effective in respect of any Class of Shares
of a Fund upon execution of an Exhibit relating to such Class of the
Fund. Once effective in respect of any Class of shares, this Agreement
shall continue in effect for one year from the date of its execution,
and thereafter for successive periods of one year only if the form of
this Agreement is approved at least annually by the Board of each
Investment Company, including a majority of the members of the Board of
the Investment Company who are not interested persons of the Investment
Company ("Independent Board Members") cast in person at a meeting
called for that purpose.

<PAGE>

4. Notwithstanding paragraph 3, this Agreement may be terminated as follows:

(a) By any Investment Company as to any Fund at any time, without
the payment of any penalty, by the vote of a majority of the
Independent Board Members of any Investment Company or by a vote
of a majority of the outstanding voting securities of any Fund
as defined in the Investment Company Act of 1940 on sixty (60)
days' written notice to the parties to this Agreement;

(b) automatically in the event of the Agreement's assignment as defined in
the Investment Company Act of 1940; and

5. FSS agrees to obtain any taxpayer identification number certification
from each shareholder of the Funds to which it provides Services that
is required under Section 3406 of the Internal Revenue Code, and any
applicable Treasury regulations, and to provide each Investment Company
or its designee with timely written notice of any failure to obtain
such taxpayer identification number certification in order to enable
the implementation of any required backup withholding.

6. FSS shall not be liable for any error of judgment or mistake of law or
for any loss suffered by any Investment Company in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. FSS shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for
such Investment Company) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such
advice. Any person, even though also an officer, trustee, partner,
employee or agent of FSS, who may be or become a member of such
Investment Company's Board, officer, employee or agent of any
Investment Company, shall be deemed, when rendering services to such
Investment Company or acting on any business of such Investment
Company (other than services or business in connection with the duties
of FSS hereunder) to be rendering such services to or acting solely
for such Investment Company and not as an officer, trustee, partner,
employee or agent or one under the control or direction of FSS even
though paid by FSS.

This Section 6 shall survive termination of this Agreement.

8. FSS is expressly put on notice of the limitation of liability as set
forth in the Declaration of Trust of each Investment Company that is a
Massachusetts business trust and agrees that the obligations assumed by
each such Investment Company pursuant to this Agreement shall be
limited in any case to such Investment Company and its assets and that
FSS shall not seek satisfaction of any such obligations from the
shareholders of such Investment Company, the Trustees, Officers,
Employees or Agents of such Investment Company, or any of them.

<PAGE>

9. The execution and delivery of this Agreement have been authorized by
the Trustees of FSS and signed by an authorized officer of FSS, acting
as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not binding
upon any of the Trustees or shareholders of FSS, but bind only the
trust property of FSS as provided in the Declaration of Trust of FSS.

10. Notices of any kind to be given hereunder shall be in writing
(including facsimile communication) and shall be duly given if
delivered to any Investment Company at the following address: Federated
Investors Tower, Pittsburgh, PA 15222-3779, Attention: President and if
delivered to FSS at Federated Investors Tower, Pittsburgh, PA
15222-3779, Attention: President.

11. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written. If any provision of this Agreement
shall be held or made invalid by a court or regulatory agency
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. Subject to the provisions of Sections 3
and 4, hereof, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
shall be governed by Pennsylvania law; provided, however, that nothing
herein shall be construed in a manner inconsistent with the Investment
Company Act of 1940 or any rule or regulation promulgated by the
Securities and Exchange Commission thereunder.

13. This Agreement shall not be assigned by any party without the prior
written consent of the parties hereto. Nothing in this Section 13 shall
prevent FSS from delegating its responsibilities to another entity to
the extent provided herein.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.

<PAGE>

Investment Companies (listed on Schedule A)

Attest: /s/ S. Elliott Cohan By: /s/ John W. McGonigle
Title: Assistant Secretary Title: Executive Vice President

Federated Shareholder Services

Attest:/s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President

Federated Securities Corp.

Attest: /s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President

<PAGE>

EXHIBIT 1 TO SHAREHOLDER SERVICES AGREEMENT
FOR CLASS B SHARES OF THE INVESTMENT COMPANIES

1. The Shareholder Services Agreement for Shares of the Investment
Companies on behalf of the portfolios (individually referred to as a "Fund" and
collectively as "Funds") and the classes of shares ("Classes") listed on the
attached Schedule A dated October 24, 1997 among Federated Securities Corp.
("Principal Servicer"), Federated Shareholder Services ("Class Servicer") and
the Investment Companies is hereby made applicable on the terms set forth herein
to the Class B Shares of the above-referenced Funds. In the event of any
inconsistency between the terms of this Exhibit and the Shareholder Services
Agreement, the terms of this Exhibit shall govern.

2. In connection with the Services to be rendered to holders of Class B
Shares of each Fund, the Principal Servicer and Class Servicer agree that the
Principal Servicer shall retain and compensate the Class Servicer for its
Services in respect of the Class B Shares of the Fund on one of the following
alternative basis as the Principal Servicer shall elect:

ALTERNATIVE A3: The Principal Servicer shall pay the Class
Servicer a dollar amount as set forth on Schedule A per Class B
Commission Share (as defined in the Principal Shareholder Servicer's
Agreement) of the Fund. Class Servicer agrees that upon receipt of such
payment (which shall be deemed to be full and adequate consideration
for an irrevocable service commitment (the "Irrevocable Service
Commitment") of Class Servicer hereunder), Class Servicer shall be
unconditionally bound and obligated to either: (1) provide the Services
in respect of such Commission Share and all other Shares derived
therefrom via reinvestment of dividends, free exchanges or otherwise
for so long as the same is outstanding or (2) in the event the Class
Servicer for the Class B Shares is terminated by the Investment
Company, to arrange for a replacement Class Servicer satisfactory to
the Investment Company to perform such services, at no additional cost
to the Fund.

ALTERNATIVE B4: If Alternative A is not elected, the Principal
Servicer shall pay the Class Servicer twenty five basis points (0.25%)
per annum on the average daily net asset value of each Class B Share of
the Fund monthly in arrears. The Class Servicer agrees that such
payment is full and adequate consideration for the Services to be
rendered by it to the holder of such Class B Share.

3. In the event pursuant to paragraph 2 above, Alternative A has been
elected and the Class Servicer is terminated as Class Servicer for the Class B
Shares of the Fund, the Class Servicer agrees to pay to any successor Class
Servicer for the Class B Shares of the Fund any portion of the excess, if any,
of (A) the Servicing Fees received by it hereunder in respect of Class B Shares
of the Fund plus interest thereon at the percent as set forth on Schedule A per
annum minus (B) the costs it incurred hereunder in respect of the Class B Shares
of the Fund prior to such termination.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.

Attest: FEDERATED SECURITIES CORP.

By: /s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President

Attest: FEDERATED SHAREHOLDER SERVICES

By:/s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President

Attest: INVESTMENT COMPANIES
(listed on Schedule A)

By: /s/ S. Elliott Cohan By: /s/ John W. McGonigle
Title: Assistant Secretary Title: Executive Vice President

<PAGE>

Schedule A to Exhibit 1

Liberty U.S. Government Money Market Trust - Class B Shares

Exhibit (j)(i) under N-1A
Exhibit 23 under Item 601/Reg. S-K

ARTHUR ANDERSEN LLP

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use in
Post-Effective Amendment No. 36 to Form N-1A Registration Statement of Money
Market Obligations Trust of our report dated September 28, 1999, on the
financial statements as of July 31, 1999, of Treasury Obligations Fund,
Government Obligations Fund, Government Obligations Tax-Managed Fund, Prime
Obligations Fund and Tax-Free Obligations Fund included in or made part of this
registration statement.

/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP

Boston, Massachusetts
October 28, 1999

Exhibit (j)(ii) under N-1A
Exhibit 23 under Item 601/Reg. S-K

Consent of Ernst & Young LLP, Independent Auditors

We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectuses and "Independent Auditors" in the Statements of
Additional Information and to the incorporation by reference of our reports
dated September 17, 1999 on the Municipal Obligations Fund, Prime Cash
Obligations Fund and Prime Value Obligations Fund in Post-Effective Amendment
Number 36 to the Registration Statement (Form N-1A No. 33-31602) of the Money
Market Obligations Trust dated October 31, 1999.

/s/ Ernst & Young LLP
Ernst & Young

Boston, Massachusetts
October 28, 1999

Exhibit (o)(i) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretaries of MONEY MARKET OBLIGATIONS
TRUST and each of them, their true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for them and in their names, place
and stead, in any and all capacities, to sign any and all documents to be filed
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, the Securities Exchange Act of 1934 and the Investment Company Act of
1940, by means of the Securities and Exchange Commission's electronic disclosure
system known as EDGAR; and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to sign and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as each of them might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.

SIGNATURES TITLE DATE

/s/John F. Donahue Chairman and Trustee October 4, 1999
- -------------------------------------------------
John F. Donahue (Chief Executive Officer)

/s/J. Christopher Donahue President October 4, 1999
J. Christopher Donahue

/s/Richard J. Thomas Treasurer October 4, 1999
- -------------------------------------------------
Richard J. Thomas (Principal Financial and
Accounting Officer)

/s/Thomas G. Bigley Trustee October 4, 1999
Thomas G. Bigley

/s/John T. Conroy, Jr. Trustee October 4, 1999
- -------------------------------------------------
John T. Conroy, Jr.

<PAGE>

SIGNATURES TITLE DATE

/s/William J. Copeland Trustee* October 4, 1999
William J. Copeland

/s/James E. Dowd Trustee** October 4, 1999
James E. Dowd

/s/Lawrece D. Ellis, M.D. Trustee October 4, 1999
Lawrence D. Ellis, M.D.

/s/Edward L. Flaherty, Jr. Trustee** October 4, 1999
- -------------------------------------------------
Edward L. Flaherty, Jr.

/s/Peter E. Madden Trustee October 4, 1999
Peter E. Madden

/s/John E. Murray, Jr. Trustee October 4, 1999
- -------------------------------------------------
John E. Murray, Jr.

/s/Wesley W. Posvar Trustee** October 4, 1999
Wesley W. Posvar

/s/Marjorie P. Smuts Trustee October 4, 1999
Marjorie P. Smuts

*Resigned April 2, 1999
**Resigned January 2, 1999
</TABLE>

Sworn to and subscribed before me this 13th day of October, 1999

/s/Madaline P. Kelly
Notarial Seal
Madaline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries

Exhibit (o)(ii) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/s/William D. Dawson, III Chief Investment Officer October 4, 1999
- ----------------------------
William D. Dawson, III

Sworn to and subscribed before me this 13th day of October, 1999

/s/Madaline P. Kelly
Notarial Seal
Madaline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries

Exhibit (o)(iv) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/s/John F. Cunningham Trustee October 4, 1999
John F. Cunningham

Sworn to and subscribed before me this 13th day of October, 1999

/s/Madaline P. Kelly
Notarial Seal
Madaline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries

Exhibit (o)(v) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/s/Charles F. Mansfield, Jr. Trustee October 4, 1999
- ------------------------------
Charles F. Mansfield, Jr.

Sworn to and subscribed before me this 13th day of October, 1999

/s/Madaline P. Kelly
Notarial Seal
Madaline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries

Exhibit (o)(vi) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/s/John S. Walsh Trustee October 4, 1999
John S. Walsh

Sworn to and subscribed before me this 13th day of October, 1999

/s/Madaline P. Kelly
Notarial Seal
Madaline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries