PRUDENTIAL GLOBAL LIMITED MATURITY FUND INC, 497, 1995-11-17

PRUDENTIAL GLOBAL LIMITED MATURITY FUND INC
497, 1995-11-17

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PRUDENTIAL GLOBAL LIMITED MATURITY FUND, INC.
GLOBAL ASSETS PORTFOLIO
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292
---------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
---------------

To our Shareholders:

Notice is hereby given that a Special Meeting of Shareholders of the
Prudential Global Limited Maturity Fund, Inc. (the Fund) Global Assets Portfolio
will be held at 9:00 A.M. on January 12, 1996 at 199 Water Street, New York,
N.Y. 10292, for the following purposes:

1. To approve an Agreemen t and Plan of Reorganization whereby all of the
assets of the Global Assets Portfolio of the Fund will be transferred to the
Fund's Limited Maturity Portfolio and the liabilities of the Global Assets
Portfolio of the Fund, if any, will be assumed by the Limited Maturity Portfolio
of the Fund in exc hange for Class A shares of equivalent value of the Limited
Maturity Portfolio.

2. To consider and act upon any other business as may properly come before
the Meeting or any adjournment thereof.

Only shares of capital stock of the Global Assets Portfolio of record at the
close of business on November 2, 1995 are entitled to notice of and to vote at
this Meeting or any adjournment thereof.

S. Jane Rose
Secretary
Dated: November 14, 1995

_______________________________________________________________________________

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY IN THE ENCLOSED STAMPED SELF-ADDRESSED ENVELOPE. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
MAILING IN YOUR PROXY PROMPTLY.
_______________________________________________________________________________

<PAGE>

PRUDENTIAL GLOBAL LIMITED MATURITY FUND, INC.
(LIMITED MATURITY PORTFOLIO)
PROSPECTUS
and
(GLOBAL ASSETS PORTFOLIO)
PROXY STATEMENT
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292
(800) 225-1852

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

Prudential Global Limited Maturity Fund, Inc. (formerly, Prudential
Short-Term Global Income Fund, Inc.) (the Fund) has registered as an open-end,
non-diversified management investment company which consists of two portfolios:
the Limited Maturity Portfolio (formerly, Short-Term Global Income Portfolio);
and the Global Assets Portfolio (collectively, the Portfolios). Both Portfolios
are managed by Prudential Mutual Fund Management, Inc. (PMF or the Manager) and
have the same office address. The investment objective of Limited Maturity
Portfolio is to maximize total return, the components of which are current
income and capital appreciation. The investment objective of Global Assets
Portfolio is high current income with minimum risk to principal.

This Prospectus and Proxy Statement is being furnished to shareholders of
Global Assets Portfolio in connection with a proposed Agreement and Plan of
Reorganization and Liquidation (the Plan), whereby Limited Maturity Portfolio
will acquire all of the assets of Global Assets Portfolio and assume the
liabilities, if any, of Global Assets Portfolio. If the Plan is approved by
Global Assets Portfolio's shareholders, all such shareholders will be issued
Class A shares of Limited Maturity Portfolio in place of the shares of Global
Assets Portfolio held by them, and Global Assets Portfolio will be liquidated.
Shareholders of Limited Maturity Portfolio are not being asked to vote on the
Plan.

This Prospectus and Proxy Statement sets forth concisely information about
Limited Maturity Portfolio that prospective investors should know before
investing. This Prospectus and Proxy Statement is accompanied by the Prospectus
of Limited Maturity Portfolio, dated January 3, 1995, including April 17, 1995,
May 5, 1995, October 2, 1995, and October 17, 1995 Supplements thereto, and the
Prospectus of Global Assets Portfolio, dated January 3, 1995, including April
17, 1995, May 5, 1995, October 2, 1995, October 6, 1995 and October 17, 1995
Supplements thereto, which Prospectuses are incorporated by reference herein.
The Statement of Additional Information of the Fund, dated January 3, 1995,
including August 1, 1995 and September 29, 1995 Supplements thereto, has been
filed with the Securities and Exchange Commission (SEC), is incorporated herein
by reference and is available without charge upon written request to Prudential
Mutual Fund Services, Inc., Raritan Plaza One, Edison, New Jersey 08837 or by
calling the toll-free number shown above. Additional information, contained in a
Statement of Additional Information dated November 14, 1995, forming a part of
the Fund's Registration Statement on Form N-14, has been filed with the SEC, is
incorporated herein by reference and is available without charge upon request to
the address or telephone number shown above.

This Prospectus will first be mailed to shareholders on or about November
17, 1995.

Investors are advised to read and retain this Prospectus for future
reference.

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

The date of this Prospectus and Proxy Statement is November 14, 1995.

<PAGE>

PRUDENTIAL GLOBAL LIMITED MATURITY FUND, INC.
(LIMITED MATURITY PORTFOLIO)
(GLOBAL ASSETS PORTFOLIO)

ONE SEAPORT PLAZA
NEW YORK, N.Y. 10292

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

PROSPECTUS AND PROXY STATEMENT DATED NOVEMBER 14, 1995

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

SYNOPSIS

The following synopsis is a summary of certain information contained
elsewhere in this Prospectus and Proxy Statement and the Agreement and Plan of
Reorganization and Liquidation and is qualified by reference to the more
complete information contained herein as well as in the enclosed Prudential
Global Limited Maturity Fund, Inc. (formerly Prudential Short-Term Global Income
Fund, Inc.) (the Fund) Global Assets Portfolio Prospectus and the enclosed Fund
Limited Maturity Portfolio (formerly, Short-Term Global Income Portfolio)
Prospectus. Shareholders should read the entire Prospectus and Proxy Statement
carefully.

General

This Proxy is furnished by the Board of Directors of the Fund in connection
with the solicitation of Proxies for use at a Special Meeting of Shareholders of
Global Assets Portfolio (the Meeting) to be held at 9:00 A.M., on January 12,
1996 at 199 Water Street, New York, New York 10292, the Fund's principal
executive office. The purpose of the Meeting is to approve or disapprove an
Agreement and Plan of Reorganization and Liquidation (the Plan) whereby all of
the the assets of Global Assets Portfolio will be acquired by, and the
liabilities of Global Assets Portfolio, if any, will be assumed by, Limited
Maturity Portfolio, and such other business as may properly come before the
Meeting or any adjournment thereof. The Plan is attached to this Prospectus and
Proxy Statement as Appendix A. The transactions contemplated by the Plan are set
forth herein and in summary provide that Limited Maturity Portfolio will acquire
the assets, in exchange solely for Class A shares of Limited Maturity Portfolio,
and assume the liabilities, if any, of Global Assets Portfolio.

Approval of the Plan requires the affirmative vote of a majority of shares
of Global Assets Portfolio outstanding and entitled to vote. Approval of the
Plan by the shareholders of Limited Maturity Portfolio is not required and the
Plan is not being submitted for their approval.

The Proposed Reorganization and Liquidation

The Board of Directors of the Fund has approved the Plan, which provides for
the transfer of all of the assets of Global Assets Portfolio to Limited Maturity
Portfolio in exchange solely for Class A shares of Limited Maturity Portfolio
and the assumption by Limited Maturity Portfolio of the liabilities, if any, of
Global Assets Portfolio. Following shareholder approval, if obtained, Class A
shares of Limited Maturity Portfolio will be distributed to Class A shareholders
of Global Assets Portfolio, and Global Assets Portfolio will be liquidated. The
reorganization will become effective as soon as practicable after the Meeting.
Each Global Assets Portfolio Class A shareholder will receive the number of full
and fractional shares of Limited Maturity Portfolio equal in value (rounded to
the third decimal place) to such shareholder's Class A shares of Global Assets
Portfolio as of the closing date.

For the reasons set forth below under " -Reasons for the Proposed
Reorganization and Liquidation" and "The Proposed Transaction-Reasons for the
Reorganization and Liquidation," the Fund's Board of Directors, including

<PAGE>

those Directors who are not "interested persons" (Independent Directors) as that
term is defined in the Investment Company Act of 1940, as amended (Investment
Company Act), have concluded that the reorganization would be in the best
interests of the shareholders of Global Assets Portfolio and Limited Maturity
Portfolio and that the interests of shareholders of each Portfolio will not be
diluted as a result of the proposed transaction. Accordingly, the Fund's Board
of Directors recommends approval of the Plan.

Reasons for the Proposed Reorganization and Liquidation

There are a number of similarities between the Portfolios that led to
consideration of the Plan. Each Portfolio operates as an open-end,
non-diversified management investment company. Both Portfolios will invest at
least 65% of their total assets in income producing securities and may invest
in: debt securities denominated in U.S. dollars or a range of foreign
currencies; debt securities issued by supernational organizations; debt
securities denominated in the ECU; and each Portfolio may invest more than 5% of
its total assets in the securities of one or more issuers. In addition both
Portfolios may engage in: hedging and income enhancement strategies; options
transactions; forward currency exchange contracts; futures contracts and options
thereon; short sales against-the-box; repurchase agreements; securities lending;
when issued and delayed delivery securities; borrowing; and may invest up to 10%
of its net assets in illiquid securities.

The Portfolios are also similar in that: Prudential Mutual Fund Management,
Inc. (PMF or the Manager) serves as the Manager to both Portfolios; The
Prudential Investment Corporation (PIC) serves as subadviser to both Portfolios;
Prudential Mutual Fund Distributors, Inc. (PMFD) acts as the distributor for the
Class A shares of both Portfolios; and Prudential Mutual Fund Services, Inc.
(PMFS) serves as Transfer Agent and Dividend Disbursing Agent to both
Portfolios. In addition, each Portfolio pays dividends of net investment income,
if any, monthly and makes distributions of any net capital gains at least
annually.

Each Portfolio is managed by J. Gabriel Irwin and Simon Wells who head a
Global Fixed Income Group of PIC. As a team, they have responsibility for the
day-to-day management of the Fund's portfolios. Messrs. Irwin and Wells have
been employed by PIC and Prudential-Bache Securities (U.K.) Inc. since April
1995. Messrs. Irwin and Wells were previously employed by Smith Barney Global
Capital Management Inc., where they worked together as Directors and Senior
members of the Investment Policy Committee and managed approximately $1.5
billion in institutional and mutual fund assets. Messrs. Irwin and Wells also
serve as the portfolio managers of The Global Government Plus Fund, Inc. and The
Global Total Return Fund, Inc.

There are also a number of differences between the Portfolios. See "-Certain
Differences Between Limited Maturity Portfolio and Global Assets Portfolio"
below.

The Fund believes that if the proposed reorganization is approved, Global
Assets Portfolio shareholders will benefit from the lower distribution and
service fee, as well as from the lower overall expenses of the Limited Maturity
Portfolio. For the fiscal year ended October 31, 1994, Global Assets Portfolio
had Total Portfolio Operating Expenses of 1.73% for its Class A shares, whereas
for that same time period, Limited Maturity Portfolio had Total Portfolio
Operating Expenses for its Class A shares of 1.17%. It is possible, although
there can be no assurance that, as a result of the reorganization, the expense
ratios with respect to the surviving portfolio may be reduced somewhat, total
return may be enhanced and diversification may be improved due to a larger base
of assets. Furthermore, Global Assets Portfolio shareholders would also benefit
from the more flexible shareholder exchange privileges provided by the Limited
Maturity Portfolio. The Global Assets Portfolio exchange privilege is a limited
privilege and permits Class A shareholders to exchange their shares for only
Class A shares of Prudential Adjustable Rate Securities Fund, Inc. (In May 1995,
Prudential Adjustable Rate Securities Fund, Inc. stopped offering its shares,
with limited exceptions, due to a proposed reorganization and plan to liquidate
such fund.) The Limited Maturity Portfolio has a more expansive exchange
privilege, and its shareholders may exchange their shares for shares of certain
other Prudential Mutual Funds, including one or more specified money market
funds. Specifically, Class A shareholders of Limited Maturity

<PAGE>

Portfolio may exchange their shares for Class A shares of Prudential Structured
Maturity Fund, Inc., Prudential Government Securities Trust (Short-Intermediate
Term Series) and certain money market funds which are listed in the Fund's
Statement of Additional Information. In addition, the Manager believes that
greater returns may be achieved for shareholders by combining both Portfolios
into the one portfolio with a longer weighted average maturity, greater
flexibility and more expansive investment policies which permit the Manager to
take advantage of opportunities in today's international fixed income market.
For more information about Limited Maturity Portfolio's investment policies, see
" -Certain Differences Between Limited Maturity Portfolio and Global Assets
Portfolio" below.

Below is total return information for the Class A, Class B and Class C
shares of Limited Maturity Portfolio and for the Class A and Class B shares of
the Global Assets Portfolio for each of the fiscal years ended October 31, 1992,
1993 and 1994, and for the six-months ended April 30, 1995. The following tables
are derived from the "Financial Highlights" of each Portfolio. "Financial
Highlights" for the Limited Maturity Portfolio are set forth in such Portfolio's
Prospectus a copy of which accompanies this Prospectus and Proxy Statement and
is set forth in the Portfolio's annual and semi-annual reports included as
Appendix B. "Financial Highlights" for Global Assets Portfolio are set forth in
such Portfolio's Prospectus, a copy of which accompanies this Prospectus and
Proxy Statement and is set forth in the Portfolio's annual and semi-annual
reports included as Appendix C.

Global Assets Portfolio

Class A Class B
---------------------------------- ------------------------
Six Months November
Ended 1, 1993
April 30, through Year Ended
1995 Year Ended October 31, May 9, October 31,
(unaudited) 1994 1993 1992 1994* 1993 1992
---- ---- ---- ---- ---- ---- ----
TOTAL
RETURN** 1.81% 0.47% 4.36% 1.46% 2.33% 5.47% 0.94%

**Last day of investment operations of Class B shares. On May 10, 1994, all
existing Class B shares were converted to Class A shares.

**Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the last
day of each period reported and includes reinvestments of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.

Limited Maturity Portfolio
<TABLE>
<CAPTION>

Class A Class B Class C
------------------------------------- ------------------------------------ -------------------
Six Six Six August
Months Months Months 1, 1994*
Ended Ended Ended through
April 30, April 30, April 30, October
1995 Year Ended October 31, 1995 Year Ended October 31, 1995 31,
(unaudited) 1994 1993 1992 (unaudited) 1994 1993 1992 (unaudited) 1994
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>

TOTAL
RETURN** 0.68% (1.89)% 7.96% (0.07)% 0.72% (2.62)% 7.00% (0.86)% 0.72% 0.75%
</TABLE>

**Commencement of offering of Class C shares.

<PAGE>

The proposed transaction would give Limited Maturity Portfolio the
opportunity to increase its assets by acquiring securities consistent with its
investment objective and policies in exchange for the issuance of its shares.

The Board of Directors of the Fund has determined that approval of the Plan
would be in the best interests of each Portfolio and of its respective
shareholders for the reasons discussed above. See, also "The Proposed
Transaction-Reasons for the Reorganization and Liquidation" below.

Certain Differences Between Limited Maturity Portfolio and Global Assets
Portfolio

While the investment objective of both Portfolios are similar, there are a
few important differences between the Portfolios.

The Limited Maturity Portfolio's investment objective is to maximize total
return, the components of which are current income and capital appreciation. The
Limited Maturity Portfolio seeks to achieve its objective by investing primarily
in a portfolio of investment grade debt securities. The Limited Maturity
Portfolio will maintain a weighted average maturity of more than 2, but less
than 5 years, and the maturity for any individual security will generally not
exceed 10 years. The Global Assets Portfolio's investment objective is high
current income with minimum risk to principal. The Global Assets Portfolio seeks
to achieve its objective by investing primarily in a portfolio of high-quality
debt securities having remaining maturities of not more than 1 year. There is no
assurance that either Portfolio will achieve its investment objective.

Unlike the Global Assets Portfolio, Limited Maturity Portfolio may invest up
to 15% of its total assets in non-investment grade securities with a minimum
rating of B (as determined by the Standard & Poor's Ratings Group, Moody's
Investors Services, Inc. or by another nationally recognized statistical ratings
organization, or if unrated, deemed to be of equivalent quality by the
Portfolio's investment adviser). The Limited Maturity Portfolio, unlike the
Global Assets Portfolio, also permits investment in debt securities denominated
in the currencies of certain "emerging market" nations (including Greece, Hong
Kong, Thailand, China and Israel). Investment in non-investment grade
securities, as well as investment in emerging markets, may entail additional
risks to the Portfolio. See "Principal Risk Factors" below.

Whereas the Global Assets Portfolio will, under normal circumstances,
maintain at least 35% of its net assets in U.S. dollar denominated securities
and will invest in debt securities of issuers in at least three different
countries; the Limited Maturity Portfolio will, under normal circumstances,
maintain at least 30% of its total assets in securities denominated in U.S.
Dollars and in cash, maintain at least 50% of its total assets in Dollar Bloc
currencies (U.S., Canada, Australia and New Zealand), and invest in a minimum of
five different countries. The Limited Maturity Portfolio may invest 100% of its
assets in securities denominated in U.S. Dollars or in cash for temporary,
extraordinary or emergency purposes.

Unlike the Global Assets Portfolio, the Limited Maturity Portfolio may
invest up to 10% of its total assets in zero coupon securities; may invest up to
5% of its total assets in convertible securities; and may invest up to 5% of its
total assets in shares of closed-end investment companies or investment trusts.
For a more detailed discussion of these types of investments and the risks
involved, see "Principal Risk Factors" below.

The Global Assets Portfolio exchange privilege is a limited privilege and
permits Class A shareholders to exchange their shares for only Class A shares of
Prudential Adjustable Rate Securities Fund, Inc. (In May 1995, Prudential
Adjustable Rate Securities Fund, Inc. stopped offering its shares, with limited
exceptions, due to a proposed reorganization and plan to liquidate such fund.)
The Limited Maturity Portfolio has a more expansive exchange privilege, and its
shareholders may exchange their shares for shares of certain other Prudential
Mutual Funds, including one or more specified money market funds. Specifically,
Class A shareholders of Limited Maturity Portfolio may exchange their shares for
Class A shares of Prudential Structured Maturity Fund, Inc., Prudential
Government Securities Trust (Short-Intermediate Term Series) and certain money
market funds which are listed in the Fund's Statement of Additional Information.

<PAGE>

Structure of Limited Maturity Portfolio and Global Assets Portfolio

Prudential Global Limited Maturity Fund, Inc. is a Maryland corporation and
each Portfolio operates as an open-end, non-diversified management investment
company. The Fund consists of two Portfolios; the Global Assets Portfolio and
the Limited Maturity Portfolio. The Global Assets Portfolio commenced investment
operations on February 15, 1991 and the Limited Maturity Portfolio commenced
investment operations on November 1, 1990. The Fund is authorized to issue
2,000,000,000 shares of capital stock (par value $.001 per share).

The Global Assets Portfolio consists of two classes of shares designated
Class A and Class B shares. On May 10, 1994, all existing Class B shares were
converted to Class A shares and since then Global Assets Portfolio offers only
one class of shares designated Class A shares. Limited Maturity Portfolio
consists of three classes of shares designated Class A, Class B and Class C
shares. Limited Maturity Portfolio is offering all three classes of shares. All
three classes of shares of Limited Maturity Portfolio represent an interest in
the same assets of such Portfolio and are identical in all respects except that
each class bears certain distribution expenses and has voting rights with
respect to certain distribution and service plans.

The Fund has received an order of the Securities and Exchange Commission
(SEC) permitting each Portfolio to issue and sell multiple classes of capital
stock. Each share of each class of capital stock is equal as to earnings, assets
and voting privileges, except as noted above, and each class bears the expenses
related to the distribution of its shares. Except for the conversion feature
applicable to the Class B shares of the Limited Maturity Portfolio, there are no
conversion, preemptive or other subscription rights. In the event of
liquidation, each share of capital stock of Global Assets Portfolio and of
Limited Maturity Portfolio is entitled to its portion of all of its respective
Portfolio's assets after all debt and expenses of such Portfolio have been paid.
Since the Class B and Class C shares of Limited Maturity Portfolio generally
bear higher distribution expenses than Class A shares of Limited Maturity
Portfolio, the liquidation proceeds to such Class B and Class C shareholders are
likely to be lower than to such Class A shareholders.

The Fund's Articles of Incorporation permit the Fund's Board of Directors to
authorize the creation of additional portfolios and classes within such
portfolios, with such preferences, privileges, limitations and voting and
dividend rights as the Board of Directors may determine. The Board of Directors
may increase the number of authorized shares without the approval of
shareholders. Shares of each Portfolio, when issued as described in each
Portfolio's Prospectus, are fully paid, nonassessable, fully transferable and
redeemable at the option of the holders. Both Portfolios issue share
certificates upon written request to PMFS. Shareholders who hold their shares
through Prudential Securities will not receive stock certificates. Shares are
also redeemable at th tificates. option of each Portfolio under certain
circumstances. Neither Portfolio's shares have cumulative voting rights for the
election of Fund Directors.

Investment Objective and Policies -- Limited Maturity Portfolio

The Limited Maturity Portfolio's investment objective is to maximize total
return, the components of which are current income and capital appreciation. The
Portfolio seeks to achieve its objective by investing primarily in a portfolio
of investment grade debt securities. The Portfolio will maintain a weighted
average maturity of more than 2, but less than 5 years, and the maturity for any
individual security will generally not exceed 10 years. The Portfolio may also
invest up to 15% of its total assets in non-investment grade securities with a
minimum rating of B (as determined by the Standard & Poor's Ratings Group,
Moody's Investors Services, Inc. or by another nationally recognized statistical
ratings organization, or if unrated, deemed to be of equivalent quality by the
Portfolio's investment adviser). Investment in non-investment grade securities
may entail additional risks to the Portfolio. See "Principal Risk Factors"
below. There is no assurance that the Portfolio will achieve its investment
objective.

The Limited Maturity Portfolio will under normal circumstances invest in a
minimum of five different countries, and will invest at least 30% of its total
assets in securities denominated in U.S. Dollars and in cash, and at least 50%
of its total assets in Dollar Bloc currencies (U.S., Canada, Australia and New
Zealand). The Portfolio may invest 100% of its assets in securities denominated
in U.S. Dollars or in cash for temporary, extraordinary or emergency purposes.

<PAGE>

The Limited Maturity Portfolio may also invest in debt securities
denominated in the currencies of certain "emerging market" nations, such as, but
not limited to, the Czech Republic, Greece, South Korea, Hong Kong, Malaysia,
Indonesia, Thailand, China, Israel, Chile, Colombia, Venezuela, Turkey and
Argentina. Investment in securities denominated in the currencies of such
emerging markets may entail additional risks to the Limited Maturity Portfolio.
See "Principal Risk Factors" below.

Other than stated above the investment policies of the Limited Maturity
Portfolio are substantially similar to the investment policies of Global Assets
Portfolio including each Portfolio's ability to borrow an amount equal to no
more than 20% of the value of each Portfolio's total assets (computed at the
time the loan is made from banks for temporary, extraordinary or emergency
purposes or for the clearance of transactions. During periods when such
Portfolio has borrowed for temporary, extraordinary or emergency purposes of for
the clearance of transactions, such Portfolio may pursue its investment
objective by purchasing additional securities which can result in increased
volatility of the Portfolio's net asset value. Neither Portfolio will borrow to
take advantage of investment opportunities. Each Portfolio may pledge up to 20%
of its total assets to secure these borrowings.

Should the proposed reorganization be consummated, it is anticipated that
the portfolio securities acquired from the Global Assets Portfolio will, in the
ordinary course of business, mature or be sold over time to lengthen the overall
duration of such instruments and bring such portfolio more in line with the
Limited Maturity Portfolio's investment objective and policies. The Manager of
the Limited Maturity Portfolio expects that such sales may affect (i) the
aggregate amount of taxable gains and losses generated by such Portfolio and
(ii) its portfolio turnover rate. After consummation of the reorganization, it
is expected that the Limited Maturity Portfolio's assets will be invested
consistent with its investment objective and policies as described above.

Fees and Expenses

Management Fees

PMF, the Manager of each Portfolio and a wholly-owned subsidiary of The
Prudential Insurance Company of America (Prudential), is compensated, pursuant
to a Management Agreement with each of the Portfolios, at an annual rate of .55
of 1% of the average daily net assets of the respective Portfolio.

Under Subadvisory Agreements between PMF and PIC with respect to both
Portfolios, PIC, as Subadviser, provides investment advisory services for the
management of each Fund. Pursuant to the Subadvisory Agreements, PMF will
reimburse PIC for its reasonable costs and expenses in providing subadvisory
services. PMF continues to have responsibility for all investment advisory
services pursuant to the Management Agreements for both Portfolios and
supervises the Subadviser's performance of its services on behalf of each
Portfolio.

Distribution Fees

Each Fund has a plan of distribution adopted pursuant to Rule 12b-1 of the
Investment Company Act (12b-1 Plan) with respect to its Class A shares pursuant
to which each Fund pays PMFD for its distribution-related activities. The Global
Assets Portfolio pays PMFD an annual distribution and service fee at an annual
rate of up to .50 of 1% of the average daily net assets of the Class A shares.
The Class A 12b-1 Plan provides that (i) up to .25 of 1% of the average daily
net assets of the Class A shares may be used to pay for personal service and/or
the maintenance of shareholder accounts (service fee) and (ii) total
distribution fees (including the service fee of up to .25 of 1%) may not exceed
.50 of 1% of the average daily net assets of the Class A shares. For the fiscal
year ended October 31, 1994, PMFD received payments of $411,334 under the Global
Assets Portfolio Class A 12b-1 Plan. For the same period, PMFD received initial
sales charges of approximately $24,100.

<PAGE>

Pursuant to its Class A 12b-1 Plan, the Limited Maturity Portfolio
reimburses PMFD for its distribution-related expenses with respect to Class A
shares at an annual rate of up to .30 of 1% of the average daily net assets of
the Class A shares. The Class A 12b-1 Plan provides that (i) up to .25 of 1% of
the average daily net assets of the Class A shares may be used to pay for
personal service and/or the maintenance of shareholder accounts (service fee)
and (ii) total distribution fees (including the service fee of up to .25 of 1%)
may not exceed .30 of 1% of the average daily net assets of the Class A shares.
PMFD has advised the Limited Maturity Portfolio that distribution-related
expenses under the Class A 12b-1 Plan did not exceed .15 of 1% of the average
daily net assets of the Class A shares for the fiscal year ended October 31,
1995 and will not exceed .15 of 1% of the average daily net assets of the Class
A shares for the fiscal year ending October 31, 1996. For the fiscal year ended
October 31, 1994, PMFD received payments of $57,000 under the Limited Maturity
Portfolio Class A 12b-1 Plan as reimbursement of expenses related to the
distribution of Class A shares. This amount was primarily expended for payment
of account servicing fees to financial advisers and other persons who sell Class
A shares. For the fiscal year ended October 31, 1994 PMFD also received
approximately $15,000 in initial sales charges. Under a reimbursement type plan
the distributor receives reimbursement for expenditures made pursuant to the
plan up to an agreed upon rate.

The Global Assets Portfolio has a compensation type Class A 12b-1 Plan
whereby PMFD receives compensation for its distribution and service activities
undertaken in connection with the Class A shares, not as reimbursement for
specific expenses incurred. Therefore, if PMFD's expenses are less than such
distribution and service fees, it will retain its full fees and realize a
profit, and if its expenses are more than such distribution and service fees it
will realize a loss. Limited Maturity Portfolio has a reimbursement type Class A
12b-1 Plan whereby PMFD is reimbursed for expenses actually incurred up to an
agreed upon rate.

Prudential Securities Incorporated (PSI) is compensated for serving as the
Distributor of Limited Maturity Portfolio's Class B and Class C shares pursuant
to separate compensation type 12b-1 Plans. The Limited Maturity Portfolio may
pay PSI for its distribution-related activities with respect to Class B and
Class C shares at an annual rate of up to 1% of the average daily net assets of
the Class B and Class C shares, respectively. Each of the Class B and Class C
12b-1 Plans provide for payments to PSI of (i) an asset-based sales charge of up
to .75 of 1% of the average daily net assets of the Class B and Class C shares,
respectively, and (ii) a service fee of up to .25 of 1% of the average daily net
assets of the Class B and Class C shares, respectively. The service fee is used
to pay for personal service and/or the maintenance of shareholders accounts. PSI
agreed to limit its distribution-related fees payable under the Class B and
Class C Plans to .75 of 1% of the average daily net assets of the Class B and
Class C shares, respectively, for the fiscal year ended October 31, 1995 and has
agreed to limit its distribution-related fees payable under the Class B and
Class C Plans to .75 of 1% of the average daily net assets of the Class B and
Class C shares for the fiscal year ending October 31, 1995. For the fiscal year
ended October 31, 1994, PSI received $2,679,726 under the Limited Maturity
Portfolio Class B 12b-1 Plan and approximately $11,291,500 in contingent
deferred sales charges. For the fiscal year ended October 31, 1994, PSI did not
receive any remuneration under the Limited Maturity Portfolio Class C 12b-1
Plan, nor did PSI incur any costs in distributing the Portfolio's Class C
shares.

Other Expenses

Each Portfolio also pays certain other expenses in connection with its
operation, including accounting, custodian, legal, audit, transfer agency and
registration expenses.

Fee Waivers and Subsidy

PMF may from time to time waive all or a portion of its management fee and
subsidize all or a portion of the operating expenses of each Portfolio. Fee
waivers and expense subsidies will increase a fund's yield and total return. The
distributors of the Portfolio's shares may also from time to time waive all or a
portion of the distribution expenses payable to them under the Portfolio's
respective 12b-1 Plans. Any fee waiver or subsidy may be terminated at any time
without notice after which a Portfolio's expenses will increase and its yield
and total return will be reduced.

<PAGE>

Expense Ratios

For the fiscal year ended October 31, 1994, total expenses excluding
distribution fees stated as a percentage of average net assets of Global Assets
Portfolio were 1.23% for Class A shares. For the fiscal year ended October 31,
1994, total expenses excluding distribution fees stated as a percentage of
average net assets of Limited Maturity Portfolio were 1.02%, 1.02% and .18%
(annualized) for Class A, Class B and Class C shares, respectively.

Set forth below is a comparison of the fees investors are subject to in
connection with a purchase or redemption of shares. Therw will not be any fee
payable in connection with this proposed transaction.

<TABLE>
<CAPTION>
Global
Assets Limited Maturity Portfolio*
Portfolio ---------------------------
Class A Class A Class B Class C
------- ------- ------- -------
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).... 99% 3% None None
Maximum Sales Load or Deferred Sales Load
Imposed on Reinvested Dividends........ None None None None
Deferred Sales Load (as a percentage of
original purchase price or redemption
proceeds, whichever is lower).......... None None 3% during the 1% on
first year, redemptions
decreasing by made
1% annually within one
to 1% in the year of
third year purchase
and 1% in the
fourth year and
0% in the fifth
year**
Redemption Fees.......................... None None None None
Exchange Fees............................ None None None None
Annual Portfolio Operating Expenses
(as a percentage of average net assets)

<FN>
____________
*Although the Class A, Class B and Class C Distribution and Service Plans
provide that Limited Maturity Portfolio may pay up to an annual rate of .30
of 1% of the average daily net assets of the Class A shares and up to 1% per
annum of the average daily net assets of the Class B and Class C shares, the
Distributor agreed to limit its distribution expenses with respect to the
Class A shares of the Portfolio to no more than .15 of 1% of the average
daily net asset value of the Class A shares, and to limit its distribution
fees to no more than .75 of 1% of the average daily net assets of each of the
Class B and Class C shares, for the fiscal year ended October 31, 1995. It is
expected that total operating expenses without such limitation would have
been 1.32% for the Class A shares and 2.02% for the Class B and Class C
shares.

**Class B shares will automatically convert to Class A shares approximately five
years after purchase.
</FN>
</TABLE>

Set forth below is a comparison of each Portfolio's operating expenses for
the fiscal year ended October 31, 1994. The ratios are also shown on a pro forma
(estimated) combined basis, giving effect to the reorganization.

Global
Annual Fund Operating Assets Limited Maturity Portfolio Pro Forma Combined
Expenses (as a percengage of Portfolio --------------------------- ---------------------------
average net assets) Class A Class A Class B Class C* Class A Class B Class C
------------------ ------- ------- ------- ------- ------- ------- -------

<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees ............ .55% .55% .55% .55% .55% .55% .55%

12b-1 Fees** ............... .50 .15 .75 .75 .15 .75 .75

Other Expenses ............. .68 .47 .47 .47 .54 .54 .54
---- ---- ---- ---- ---- ---- ----
Total Fund Operating
Expenses .................. 1.73% 1.17% 1.77% 1.77% 1.24% 1.84% 1.84%
==== ==== ==== ==== ==== ==== ====
</TABLE>

- ----------
*Estimated based on expenses expected to have been incurred if Class C shares
had been in existence during the entire fiscal year ended October 31, 1994.

**Pursuant to rules of the National Association of Securities Dealers, Inc., the
aggregate initial sales charges, deferred sales charges and asset-based sales
charges on shares of either Portfolio may not exceed 6.25% of total gross
sales, subject to certain exclusions. This 6.25% limitation is imposed
on each such Portfolio rather than on a per shareholder basis. Therefore,
long-term shareholders of either Portfolio may pay more in total sales charges
than the economic equivalent of 6.25% of such shareholders' investment in such
shares.

<PAGE>

Set forth below is an example which shows the expenses that an investor in
the combined portfolio would pay on a $1,000 investment, based upon the pro
forma ratios set forth above.

Example 1 Year 3 Years 5 Years 10 Years
- ------- ------ ------- ------- --------

You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:

Class A ............................ $42 $68 $ 96 $175
Class B ............................ $49 $68 $100 $216
Class C ............................ $29 $58 $100 $216

You would pay the following expenses on the same investment, assuming no
redemption:

Class A ............................ $42 $68 $ 96 $175
Class B ............................ $19 $58 $100 $216
Class C ............................ $19 $58 $100 $216

The example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.

Purchases and Redemptions

Purchases of shares of Limited Maturity Portfolio and Global Assets
Portfolio are made through PSI, Pruco Securities Corporation (Prusec), an
affiliated broker/dealer, or directly from the respective Portfolio through
their transfer agent, PMFS, at the net asset value per share next determined
after receipt of a purchase order by PMFS, Prusec or PSI plus a sales charge
which may be imposed either (i) at the time of purchase (Class A shares) or
(ii), in the case of the Limited Maturity Portfolio, on a deferred basis (Class
B and Class C shares).

With respect to the Global Assets Portfolio, the minimum initial investment
for Class A shares is $5,000 and the minimum subsequent investment is $1,000.
With respect to the Limited Maturity Portfolio, the minimum initial investment
for Class A and Class B shares is $1,000 per class and $5,000 for Class C
shares. In addition the minimum subsequent investment for all classes of the
Limited Maturity Portfolio is $100. With respect to both Portfolios, all minimum
investment requirements are waived for certain retirement and employee savings
plans or custodial accounts for the benefit of minors. For purchases of Class B
shares made through the Automatic Savings Accumulation Plan, the minimum initial
and subsequent investment is $50. Class A shares are sold with an initial sales
charge of up to .99% and 3% of the offering price of shares of the Global Assets
Portfolio and Limited Maturity Portfolio, respectively. If the proposed
reorganization is approved, there will not be any additional sales charge with
respect to the exchange of Class A shares of Global Assets Portfolio for Class A
shares of Limited Maturity Portfolio. The Class B shares of the Limited Maturity
Portfolio are sold without an initial sales charge but are subject to a
contingent deferred sales charge (CDSC) (declining from 3% to zero of the lower
of the amount invested or the redemption proceeds) which will be imposed on
certain redemptions made within four years of purchase. Although Class B shares
are subject to higher ongoing distribution-related expenses than Class A shares,
Class B shares will automatically convert to Class A shares (which are subject
to lower ongoing distribution-related expenses) after the contingent deferred
sales charge has expired. The Class C shares of the Limited Maturity Portfolio
are sold without an initial sales charge but are subject to a 1% CDSC on
redemptions made within one year of purchase.

<PAGE>

Shares of each Portfolio may be redeemed at any time at the net asset value
next determined after PSI or PMFS receives the sell
order.

Exchange Privileges

Shareholders of both Portfolios have an exchange privilege with certain
other Prudential Mutual Funds, subject to the minimum investment requirements of
such funds. The Global Assets Portfolio exchange privilege is a limited
privilege and permits Class A shareholders to exchange their shares for only
Class A shares of Prudential Adjustable Rate Securities Fund, Inc. (In May 1995,
Prudential Adjustable Rate Securities Fund, Inc. stopped offering its shares,
with limited exceptions, due to a proposed reorganization and plan to liquidate
such fund.) The Limited Maturity Portfolio has a more expansive exchange
privilege, and its shareholders may exchange their shares for shares of certain
other Prudential Mutual Funds, including one or more specified money market
funds. Specifically, Class A shareholders of Limited Maturity Portfolio may
exchange their shares for Class A shares of Prudential Structured Maturity Fund,
Inc., Prudential Government Securities Trust (Short-Intermediate Term Series)
and certain money market funds which are listed in the Fund's Statement of
Additional Information.

Dividends and Distributions

Each Fund expects to declare daily and pay dividends of net investment
income, if any, monthly and make distributions of any net capital gains, if any,
at least annually. Shareholders of both Portfolios receive dividends and other
distributions in additional shares of such Portfolio unless they elect to
receive them in cash. A Global Assets Portfolio shareholder's election with
respect to reinvestment of dividends and distributions in Global Assets
Portfolio will be automatically applied with respect to Limited Maturity
Portfolio shares he or she receives pursuant to the reorganization. With respect
to the Limited Maturity Portfolio, dividends paid by such Portfolio with resp
ect to each class of shares, to the extent any dividends are paid, will be
calculated in the same manner, at the same time, on the same day and will be in
the same amount except that each class will bear its own distribution charges
generally resulting in lower dividends for Class B and Class C sh ares.
Distribution of net capital gains, if any, will be paid in the same amount for
each class of shares.

Federal Tax Consequences of Proposed Reorganization

Prior to the consummation of the reorganization, the Fund shall have
received an opinion of Shereff, Friedman, Hoffman & Goodman, LLP, or a private
letter ruling from the Internal Revenue Service (IRS), to the effect that the
proposed reorganization will constitute a tax-free reorganization within the
meaning of Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended
(the Internal Revenue Code). Accordingly, no gain or loss will be recognized by
either Portfolio upon the transfer of assets and the assumption of liabilities,
if any, or by shareholders of Global Assets Portfolio upon their receipt of
shares of Limited Maturity Portfolio solely in return for shares of Global
Assets Portfolio. The tax basis for the shares of Limited Maturity Portfolio
received by Global Assets Portfolio shareholders will be the same as their tax
basis for the shares of Global Assets Portfolio to be constructively surrendered
in exchange therefor. In addition, the holding period of the shares of Limited
Maturity Portfolio to be received pursuant to the reorganization will include
the period during which the shares of Global Assets Portfolio to be
constructively surrendered in exchange therefor were held, provided the latter
shares were held as capital assets by the shareholders on the date of the
exchange. See "The Proposed Transaction-Tax Considerations."

<PAGE>

PRINCIPAL RISK FACTORS

Longer Weighted Average Maturity

The Global Assets Portfolio invests in debt securities having remaining
maturities of not more than 1 year; whereas the Limited Maturity Portfolio will
maintain a weighted average maturity of more than 2, but less than 5 years. To
the extent a portfolio has a longer weighted average maturity, the greater the
effect of changes in interest rates on such portfolio's net asset value.
Accordingly, the net asset value of the Limited Maturity Portfolio can be
expected to fluctuate more than that of the Global Assets Portfolio.

Foreign Investment

Both Portfolios may invest in securities of foreign companies and countries.
Such investments involve certain considerations and risks not typically
associated with investing in U.S. Government Securities and securities of
domestic companies. The values of foreign investments are affected by changes in
governmental administration or economic or monetary policy (in this country or
abroad) or changed circumstances in dealings between nations. Costs are incurred
in connection with conversions between various currencies. In addition, foreign
brokerage commissions are generally higher than in the United States, and
foreign securities markets may be less liquid, more volatile and less subject to
governmental supervision than in the United States. Investments in foreign
countries could be affected by other factors not present in the United States,
including expropriation, confiscatory taxation, lack of uniform accounting and
auditing standards and potential difficulties in enforcing contractual
obligations and could be subject to extended settlement periods.

Unlike the Global Assets Portfolio, the Limited Maturity Portfolio may
invest in debt securities denominated in the currencies of certain emerging
market nations. Investing in the fixed-income markets of developing countries
involves exposure to economies that are generally less diverse and mature, and
to political systems which can be expected to have less stability than those of
developed countries. Historical experience indicates that the markets of
developing countries have been more volatile than the markets of developed
countries. The risks associated with investments in foreign securities,
described above, may be greater with respect to investments in developing
countries.

Non-Investment Grade Securities

Both Portfolios invest in investment grade securities, Limited Maturity
Portfolio, however, may invest up to 15% of its total assets in non-investment
grade securities with a minimum rating of B (as determined by the Standard &
Poor's Ratings Group, Moody's Investors Services, Inc. or by another nationally
recognized statistical ratings organization, or if unrated, deemed to be of
equivalent quality by the Portfolio's investment adviser). Generally,
lower-rated securities and unrated securities of comparable quality, sometimes
referred to as junk bonds, offer a higher current yield than is offered by
higher-rated securities, but also (i) will likely have some quality and
protective characteristics that, in the judgement of the rating organizations,
are outweighed by large uncertainties or major risk exposures to adverse
conditions and (ii) are predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance with the terms of the
obligation. The market values of these securities also tend to be more sensitive
to individual corporate developments and changes in economic conditions than
higher-quality bonds. In addition, medium and lower-rated securities and
comparable unrated securities generally present a higher degree of credit risk.
The risk of loss due to default by these issuers is significantly greater
because medium and lower-rated securities and unrated securities of comparable
quality generally are unsecured and frequently are subordinated to the prior
payment of senior indebtedness.

The investment adviser of Limited Maturity Portfolio, under the supervision
of the Manager and the Board of Directors, in evaluating the creditworthiness of
an issue whether rated or unrated, takes various factors into

<PAGE>

consideration, which may include, as applicable, the issuer's financial
resources, its sensitivity to economic conditions and trends, the operating
history of and the community support for the facility financed by the issue, the
ability of the issuer's management and regulatory matters.

In addition, the market value of securities in lower-rated categories is
more volatile than that of higher-quality securities, and the markets in which
medium and lower-rated or unrated securities are traded are more limited than
those in which higher-rated securities are traded. The existence of limited
markets may make it more difficult for the Limited Maturity Portfolio to obtain
accurate market quotations for purposes of valuing its portfolio and calculating
its net asset value. Moreover, the lack of a liquid trading market may restrict
the availability of securities for the Portfolio to purchase and may also have
the effect of limiting the ability of the Portfolio to sell securities at their
fair value either to meet redemption requests or to respond to changes in the
economy or the financial markets.

Lower-rated debt obligations also present risks based on payment
expectations. If an issuer calls the obligation for redemption, the Limited
Maturity Portfolio may have to replace the security with a lower-yielding
security, resulting in a decreased return for investors. Also, as the principal
value of bonds moves inversely with movements in interest rates, in the event of
rising interest rates the value of the securities held by the Portfolio may
decline proportionately more than a portfolio consisting of higher-rated
securities. If the Portfolio experiences unexpected net redemptions, it may be
forced to sell its higher-rated bonds, resulting in a decline in the overall
credit quality of the securities held by the Portfolio and increasing the
exposure of the Portfolio to the risks of lower-rated securities. Investments in
zero coupon bonds may be more speculative and subject to greater fluctuations in
value due to changes in interest rates than bonds that pay interest currently.

Subsequent to its purchase by the Limited Maturity Portfolio, an issue of
securities may cease to be rated or its rating may be reduced below the minimum
required for purchase by the Portfolio. Neither event will require sale of these
securities by the Portfolio, but the investment adviser will consider this event
in its determination of whether the Portfolio should continue to hold the
securities.

As of October 31, 1994, the year-end dollar weighted average ratings of the
debt obligations held by the Limited Maturity Portfolio, expressed as a
percentage of such Portfolio's total investments, were as follows:

Percentage of Total
Ratings Investments
------- -------------------
AAA/Aaa 53.62%
AA/Aa 21.79%
A/A 7.65%
BBB/Baa -
B/B -
Unrated 13.70%

Other Investments and Investment Techniques

Both Portfolios may also engage in various hedging and income enhancement
strategies, including investing in derivatives, the purchase and sale of put and
call options and related short-term trading. Below are those investments in
which Limited Maturity Portfolio may invest and in which Global Assets Portfolio
currently does not invest.

Zero Coupon Securities

The Limited Maturity Portfolio may invest up to 10% of its total assets in
zero coupon securities. Zero coupon securities are securities that are sold at a
discount to par value and on which interest payments are not made during the
life of the security. Upon maturity, the holder is entitled to receive the par
value of the security. While interest payments are not made on such securities,
holders of such securities are deemed to have received annually "phantom
income."

<PAGE>

The Portfolio accrues income with respect to these securities prior to the
receipt of cash payments. Zero coupon securities may be subject to greater
fluctuation in value and lesser liquidity in the event of adverse market
conditions than comparable rated securities paying cash interest at regular
intervals.

Convertible Securities

The Limited Maturity Portfolio may invest up to 5% of its total assets in
convertible securities. A convertible security is generally a corporate bond (or
preferred stock) which may be converted at a stated price within a specified
period of time into a certain quantity of the common stock of the same or a
different issuer. Convertible securities are senior to common stocks in a
corporation's capital structure, but are usually subordinated to similar
nonconvertible securities. While providing a fixed income stream (generally
higher in yield than the income derivable from a common stock but lower than
that afforded by a similar nonconvertible security), a convertible security also
affords an investor the opportunity, through its conversion feature, to
participate in the capital appreciation dependent upon a market price advance in
the convertible security's underlying common stock. The Portfolio may from time
to time hold common stock received upon the conversion of a convertible
security. The Portfolio does not intend to retain the common stock in its
portfolio and will sell it as soon as reasonably practicable. Convertible
securities also include preferred stock which technically is an equity security.

In general, the market value of a convertible security is at least the
higher of its "investment value" (i.e., its value as a fixed-income security) or
its "conversion value" (i.e., its value upon conversion into its underlying
common stock). As a fixed-income security, a convertible security tends to
increase in market value when interest rates decline and tends to decrease in
value when interest rates rise. However, the price of a convertible security is
also influenced by the market value of the security's underlying stock. The
price of a convertible security tends to increase as the market value of the
underlying stock rises, whereas it tends to decrease as the market value of the
underlying stock declines.

Securities of Other Investment Companies

The Limited Maturity Portfolio may invest up to 5% of its total assets in
shares of closed-end investment companies or investment trusts. If the Portfolio
does invest in securities of other investment companies, shareholders of the
Portfolio may be subject to duplicate management and advisory fees.

For a more complete discussion of the risks attendant to Limited Maturity
Portfolio investments, please see pages 7 through 14 of the Limited Maturity
Portfolio (formerly, Short-Term Global Income Portfolio) Prospectus which
accompanies this Prospectus and Proxy Statement and is incorporated herein by
reference.

THE PROPOSED TRANSACTION

Agreement and Plan of Reorganization and Liquidation

The terms and conditions under which the proposed transaction may be
consummated are set forth in the Plan. Significant provisions of the Plan are
summarized below; however, this summary is qualified in its entirety by
reference to the Plan, a copy of which is attached as Appendix A to this
Prospectus and Proxy Statement.

The Plan contemplates (i) Limited Maturity Portfolio acquiring all of the
assets of Global Assets Portfolio in exchange solely for Class A shares of
Limited Maturity Portfolio and the assumption by Limited Maturity Portfolio of
Global Assets Portfolio's liabilities, if any, as of the Closing Date (hereafter
defined) and (ii) the constructive distribution on the date of the exchange,
expected to occur on or about January 19, 1996 (the "Closing Date") of such
Class A shares of Limited Maturity Portfolio to the Class A shareholders of
Global Assets Portfolio as provided for by the Plan.

<PAGE>

The assets of Global Assets Portfolio to be acquired by Limited Maturity
Portfolio shall include, without limitation, all cash, cash equivalents,
securities, receivables (including interest and dividends receivable) and other
property of any kind owned by Global Assets Portfolio and any deferred or
prepaid assets shown as assets on the books of Global Assets Portfolio. Limited
Maturity Portfolio will assume from Global Assets Portfolio all debts,
liabilities, obligations and duties of Global Assets Portfolio of whatever kind
or name, if any; provided, however, that Global Assets Portfolio will utilize
its best efforts, to the extent practicable, to discharge all of its known
debts, liabilities, obligations and duties prior to the Closing Date. Limited
Maturity Portfolio will deliver to Global Assets Portfolio Class A shares of
Limited Maturity Portfolio, which Global Assets Portfolio will then distribute
to its Class A shareholders.

The value of Global Assets Portfolio assets to be acquired and liabilities
to be assumed by Limited Maturity Portfolio and the net asset value of a share
of Limited Maturity Portfolio will be determined as of 4:15 P.M., New York time,
on the Closing Date in accordance with the valuation procedures of the
respective Portfolio's then-current Prospectus and the Fund's Statement of
Additional Information.

As soon as practicable after the Closing Date, Global Assets Portfolio will
liquidate and distribute pro rata to its shareholders of record the Class A
shares of Limited Maturity Portfolio received by Global Assets Portfolio in
exchange for such shareholders' interest in Global Assets Portfolio evidenced by
their shares of capital stock of Global Assets Portfolio. Such liquidation and
distribution will be accomplished by opening accounts on the books of Limited
Maturity Portfolio in the names of Global Assets Portfolio shareholders and by
transferring thereto the shares of Limited Maturity Portfolio previously
credited to the account of Global Assets Portfolio on those books. Each
shareholder account shall represent the respective pro rata number of Limited
Maturity Portfolio shares due to such Global Assets Portfolio shareholder.
Fractional shares of Global Assets Portfolio will be rounded to the third
decimal place.

Accordingly, every participating shareholder of Global Assets Portfolio will
own Class A shares of Limited Maturity Portfolio immediately after the
reorganization that, except for rounding, will have a total value equal to the
total value of that shareholder's Class A shares of Global Assets Portfolio
immediately prior to the reorganization. Moreover, because shares of Limited
Maturity Portfolio will be issued at net asset value in exchange for net assets
of Global Assets Portfolio that, except for rounding, will equal the aggregate
value of those shares, the net asset value per share of Limited Maturity
Portfolio will be unchanged. Thus, the reorganization will not result in
dilution of the value of any shareholder account. However, in general, each
Global Assets Portfolio shareholder will have a percentage of ownership in
Limited Maturity Portfolio substantially less than such shareholder's current
percentage of ownership of Global Assets Portfolio because, while such
shareholder will have the same dollar amount invested initially in Limited
Maturity Portfolio that he or she had invested in Global Assets Portfolio, his
or her investment will represent a smaller percentage of the combined net assets
of Limited Maturity Portfolio and Global Assets Portfolio.

Any transfer taxes payable upon issuance of shares of Limited Maturity
Portfolio in a name other than that of the registered holder of the shares on
the books of Global Assets Portfolio as of that time shall be paid by the person
to whom such shares are to be issued as a condition of such transfer. Any
reporting responsibility of Global Assets Portfolio will continue to be the
responsibility of Global Assets Portfolio up to and including the Closing Date
and such later date on which Global Assets Portfolio is liquidated.

The consummation of the proposed transaction is subject to a number of
conditions set forth in the Plan, some of which may be waived by the Board of
Directors of the Fund. The Plan may be terminated and the proposed transaction
abandoned at any time, before or after approval by the shareholders of Global
Assets Portfolio, prior to the Closing Date. In addition, the Plan may be
amended in any mutually agreeable manner, except that no amendment may be made
subsequent to the Meeting of shareholders of Global Assets Portfolio that would
detrimentally affect the value of Limited Maturity Portfolio shares to be
distributed.

<PAGE>

Reasons for the Reorganization and Liquidation

The Fund's Board of Directors, including a majority of the Independent
Directors, has determined that the interests of shareholders of both Portfolios
will not be diluted as a result of the proposed transaction and that the
proposed transaction is in the best interests of the shareholders of both
Portfolios.

The reasons for the proposed transaction are described above under
"Synopsis-Reasons for the Proposed Reorganization and Liquidation." The Fund's
Board of Directors based its decision to approve the Plan on an inquiry into a
number of factors, including the following:

(1) the relative past growth in assets and investment performance and
future prospects of the Portfolios;

(2) the effect of the proposed transaction on the expense ratios of each
Portfolio;

(3) the costs of the reorganization, which will be paid for by each
Portfolio in proportion to its respective asset levels;

(4) the tax-free nature of the reorganization to the Portfolios and
their shareholders;

(5) the potential benefits to PMF, PMFD and PSI (see "Synopsis-
Fees and Expenses" above); and

(6) the compatibility of the investment objectives, policies and
restrictions of the Portfolios.

If the Plan is not approved by Global Assets Portfolio shareholders, the
Fund's Board of Directors may consider other appropriate action, such as the
liquidation of Global Assets Portfolio or a merger or other business combination
with an investment company other than Limited Maturity Portfolio.

Description of Securities to be Issued

The Fund has issued shares of capital stock, par value $.001 per share.
Limited Maturity Portfolio offers three classes of shares designated Class A,
Class B and Class C shares. Class A shares of the Limited Maturity Portfolio
will be issued to Global Assets Portfolio Class A shareholders on the Closing
Date. Each Class A share represents an equal and proportional interest in
Limited Maturity Portfolio. The Fund's Articles of Incorporation authorize the
Fund to issue 2,000,000,000 shares. Shares entitle their holders to one vote per
full share and fractional votes for fractional shares held. Each share of
Limited Maturity Portfolio has equal voting, dividend and liquidation rights
with all other shares of Limited Maturity Portfolio except that each class bears
certain distribution expenses and has voting rights with respect to certain
distribution and service plans.

Tax Considerations

Prior to the Closing, the Fund will receive an opinion from Shereff,
Friedman, Hoffman & Goodman, LLP, or a private letter ruling from the IRS, to
the effect that (1) the proposed transaction described above will constitute a
reorganization within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code; (2) no gain or loss will be recognized by shareholders of Limited
Maturity Portfolio upon their receipt of shares, including fractional shares, of
Limited Maturity Portfolio in exchange for their shares of Global Assets
Portfolio (Internal Revenue Code Section 354(a)(1)); (3) no gain or loss will be
recognized by Global Assets Portfolio upon the transfer of its assets to Limited
Maturity Portfolio in exchange solely for Class A shares of Limited Maturity
Portfolio and the assumption by Limited Maturity Portfolio of Global Assets
Portfolio's liabilities, if any, and the subsequent distribution of those shares
to its shareholders in liquidation thereof (Internal Revenue Code Sections
361(a) and 357(a)); (4) no gain or loss will be recognized by Limited Maturity
Portfolio upon the receipt of such assets in exchange solely for Limited
Maturity Portfolio shares and its assumption of Global Assets Portfolio's
liabilities, if any (Internal Revenue Code Section 1032(a)); (5) Limited
Maturity Portfolio's basis for the assets received pursuant to the
reorganization will be the same as the basis thereof in the hands of Global
Assets Portfolio immediately before the reorganization, and the holding period
of those assets in the hands of Limited Maturity Portfolio will include the
holding period thereof in Global

<PAGE>

Assets Portfolio's hands (Internal Revenue Code Sections 362(b) and 1223(2));
(6) Global Assets Portfolio shareholders' basis for the shares of Limited
Maturity Portfolio to be received by them pursuant to the reorganization will be
the same as their basis for the shares of Global Assets Portfolio constructively
surrendered in exchange therefor (Internal Revenue Code Section 358(a)(1)); and
(7) the holding period of the shares of Limited Maturity Portfolio to be
received by the shareholders of Global Assets Portfolio pursuant to the
reorganization will include the period during which the shares of Global Assets
Portfolio constructively surrendered in exchange therefor were held, provided
the latter shares were held as capital assets by the shareholders on the date of
the exchange (Internal Revenue Code Section 1223(1)).

Certain Information About the Fund and its Portfolios

Organization. The Fund is a Maryland corporation and the rights of its
shareholders are governed by its Articles of Incorporation, By-Laws and the
Maryland General Corporation Law.

Capitalization. The Fund has issued shares of capital stock, par value $.001
per share. The Fund's Articles of Incorporation authorize the Fund to issue
2,000,000,000 shares to be divided initially into 250,000,000 shares of Class A
Capital Stock of the Global Assets Portfolio, 250,000,000 shares of Class B
Capital Stock of the Global Assets Portfolio, 500,000,000 shares of Class A
Capital Stock of the Limited Maturity Portfolio, 500,000,000 shares of Class B
Capital Stock of the Limited Maturity Portfolio and 500,000,000 shares of Class
C Capital Stock of the Limited Maturity Portfolio.

Shareholder Meetings and Voting Rights. Generally, neither Portfolio is
required to hold annual meetings of its shareholders. The Fund is required to
call a meeting of shareholders of both Portfolios for the purpose of voting upon
the question of removal of a Director when requested in writing to do so by the
holders of at least 10% of the Fund's outstanding shares. In addition, the Fund
is required to call a meeting of shareholders for the purpose of electing
Directors if, at any time, less than a majority of the Directors holding office
were elected by shareholders.

Shareholders of each Portfolio are entitled to one vote for each share on
all matters submitted to a vote of its shareholders under Maryland law. Approval
of certain matters, such as an amendment to the Articles of Incorporation, a
merger, consolidation or transfer of all or substantially all assets,
dissolution and removal of a Director, requires the affirmative vote of a
majority of the votes entitled to be cast. Other matters require the approval of
the affirmative vote of a majority of the votes cast at a meeting at which a
quorum is present.

The Fund's By-Laws provide that a majority of the outstanding shares shall
constitute a quorum for the transaction of business at a shareholders' meeting.
Matters requiring a larger vote by law or under the organizational documents for
the Fund are not affected by such quorum requirements.

Shareholder Liability. Under Maryland law, shareholders of each Portfolio
have no personal liability as such for either Portfolio's acts or obligations.

Liability and Indemnification of Directors. Under the Fund's Articles of
Incorporation and Maryland law, a Director or officer of the Fund is not liable
to the Fund or its shareholders for monetary damages for breach of fiduciary
duty as a Director or officer except to the extent such exemption from liability
or limitation thereof is not permitted by law, including the Investment Company
Act.

Under the Investment Company Act, a Director may not be protected against
liability to the Fund and its security holders to which he would otherwise be
subject as a result of his willful misfeasance, bad faith or gross negligence in
the performance of his duties, or by reason of reckless disregard of his
obligations and duties. The staff of the SEC interprets the Investment Company
Act to require additional limits on indemnification of Directors and officers.

<PAGE>

Pro Forma Capitalization and Ratios

The following table shows the capitalization of each Portfolio as of
September 30, 1995 and the pro forma combined capitalization of both Portfolios
as if the reorganization had occurred on that date.

Global
Assets Limited Maturity Portfolio Pro Forma Combined
Portfolio ---------------------------------- ------------------------
Class A Class A Class B Class C Class A Class B Class C
------- ------- ------- ------- ------- -------

<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets ................ $26,715,657 $18,626,946 $111,767,241 $751 $45,339,868 $111,760,497 $751

Net Asset Value Per share . $1.77 $8.39 $8.42 $8.42 $8.39 $8.42 $8.42

Shares Outstanding ........ 15,080,091 2,220,351 13,280,191 89 5,404,577 13,280,191 89
</TABLE>

The following table shows the ratio of expenses to average net assets and
the ratios of net investment income to average net assets of Global Assets
Portfolio and the Limited Maturity Portfolio for the fiscal year ended October
31, 1994. The ratios are also shown on a pro forma combined basis, assuming the
reorganization occurs on or about January 19, 1996.

Global
Assets Limited Maturity Portfolio Pro Forma Combined
Portfolio -------------------------- --------------------------
Class A Class A Class B Class C Class A Class B Class C
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of expenses to average
net assets ................. 1.73% 1.17% 1.97% .93% 1.24% 1.84% 1.84%

Ratio of net investment
income to average net
assets ...................... 4.09% 7.67% 6.82% 7.02% 7.60% 6.95% 6.11%
</TABLE>

INFORMATION ABOUT LIMITED MATURITY PORTFOLIO

Financial Information

For condensed financial information for Limited Maturity Portfolio, see
"Financial Highlights" in the Limited Maturity Portfolio Prospectus, which
accompanies this Prospectus and Proxy Statement. Also see Appendix B which
contains Limited Maturity Portfolio's annual and semi-annual reports to
shareholders for the fiscal year ended October 31, 1994 and the six months ended
April 30, 1995, respectively.

General

For a discussion of the organization, classification and sub-classification
of Limited Maturity Portfolio, see "General Information" and "Fund Highlights"
in the Limited Maturity Portfolio Prospectus.

Investment Objective and Policies

For a discussion of Limited Maturity Portfolio's investment objective and
policies and risk factors associated with an investment in The Limited Maturity
Portfolio, see "How the Fund Invests" in the Limited Maturity Portfolio
Prospectus.

Directors

For a discussion of the responsibilities of the Fund's Board of Directors,
see "How the Fund is Managed" in the Limited Maturity Portfolio Prospectus.

18
<PAGE>

Manager and Portfolio Manager

For a discussion of Limited Maturity Portfolio's Manager, subadviser and
portfolio manager, see "How the Fund is Managed-Manager" in the Limited Maturity
Portfolio Prospectus.

Performance

For a discussion of Limited Maturity Portfolio's performance during the
fiscal year ended October 31, 1994, see Limited Maturity Portfolio's Prospectus,
which accompanies this Prospectus and Proxy Statement. Also see Appendix B which
contains Limited Maturity Portfolio's annual and semi-annual reports to
shareholders for the fiscal year ended October 31, 1994 and the six months ended
April 30, 1995, respectively.

Limited Maturity Portfolio's Shares

For a discussion of Limited Maturity Portfolio's Class A, Class B and Class
C shares, including voting rights, exchange rights and the conversion feature of
Class B shares, and how the shares may be purchased and redeemed, see
"Shareholder Guide" and "How the Fund is Managed" in the Limited Maturity
Portfolio Prospectus.

Net Asset Value

For a discussion of how the offering price of Limited Maturity Portfolio
Class A, Class B and Class C shares is determined, see "How the Fund Values its
Shares" in the Limited Maturity Portfolio Prospectus.

Taxes, Dividends and Distributions

For a discussion of Limited Maturity Portfolio's policy with respect to
dividends and distributions and the tax consequences of an investment in Limited
Maturity Portfolio shares, see "Taxes, Dividends and Distributions" in the
Limited Maturity Portfolio Prospectus.

Additional Information

The Fund is subject to the informational requirements of the Investment
Company Act and in accordance therewith files reports and other information with
the Securities and Exchange Commission. Proxy material, reports and other
information filed by the Fund on behalf of either Portfolio can be inspected and
copied at the public reference facilities maintained by the SEC at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's regional offices
in New York (7 World Trade Center, Suite 1300, New York, New York 10048) and
Chicago (Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois
60661-2511). Copies of such material can be obtained at prescribed rates from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549.

INFORMATION ABOUT GLOBAL ASSETS PORTFOLIO

Financial Information

For condensed financial information for Global Assets Portfolio, see
"Financial Highlights" in the Global Assets Portfolio Prospectus, which
accompanies this Prospectus and Proxy Statement. Also see Appendix C which
contains Global Assets Portfolio's annual and semi-annual reports to
shareholders for the fiscal year ended October 31, 1994 and the six months ended
April 30, 1995, respectively.

General

For a discussion of the organization, classification and sub-classification
of Global Assets Portfolio, see "General Information" and "Fund Highlights" in
the Global Assets Portfolio Prospectus.

<PAGE>

Investment Objective and Policies

For a discussion of Global Assets Portfolio's investment objective and
policies and risk factors associated with an investment in Global Assets
Portfolio, see "How the Fund Invests" in the Global Assets Portfolio Prospectus.

Directors

For a discussion of the responsibilities of the Fund's Board of Directors,
see "How the Fund is Managed" in the Global Assets Portfolio Prospectus.

Manager and Portfolio Manager

For a discussion of Global Assets Portfolio's Manager, subadviser and
portfolio manager, see "How the Fund is Managed-Manager" in the Global Assets
Portfolio Prospectus.

Performance

For a discussion of Global Assets Portfolio's performance during the fiscal
year ended October 31, 1994, see the Global Assets Portfolio Prospectus, which
accompanies this Prospectus and Proxy Statement. Also see Appendix C which
contains Global Assets Portfolio's annual and semi-annual reports to
shareholders for the fiscal year ended October 31, 1994 and the six months ended
April 30, 1995, respectively.

Global Assets Portfolio's Shares

For a discussion of Global Assets Portfolio's Class A shares, including
voting rights and exchange rights, and how the shares may be purchased and
redeemed, see "Shareholder Guide" and "How the Fund is Managed" in the Global
Assets Portfolio Prospectus.

Net Asset Value

For a discussion of how the offering price of Global Assets Portfolio's
Class A shares is determined, see "How the Fund Values its Shares" in the Global
Assets Portfolio Prospectus.

Taxes, Dividends and Distributions

For a discussion of Global Assets Portfolio's policy with respect to
dividends and distributions and the tax consequences of an investment in Class A
shares, see "Taxes, Dividends and Distributions" in the Global Assets Portfolio
Prospectus.

Additional Information

The Fund is subject to the information requirements of the Investment
Company Act and in accordance therewith files reports and other information with
the Securities and Exchange Commission. Proxy material, reports and other
information filed by the Fund on behalf of either Portfolio can be inspected and
copied at the public reference facilities maintained by the SEC at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's regional offices
in New York (7 World Trade Center, Suite 1300, New York, New York 10048) and
Chicago (Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois
60661-2511). Copies of such material can be obtained at prescribed rates from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549.

VOTING INFORMATION

If the accompanying form of Proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the Proxy. However, if no instructions are specified, shares
will be

<PAGE>

voted for the proposal. A Proxy may be revoked at any time prior to the time it
is voted by written notice to the Secretary of the Fund or by attendance at the
Meeting. If sufficient votes to approve the proposal are not received, the
persons named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of Proxies. Any such adjournment will require the
affirmative vote of a majority of those shares present at the Meeting or
represented by proxy. When voting on a proposed adjournment, the persons named
as proxies will vote all shares that they are entitled to vote, for the proposed
adjournment, unless directed to disapprove the proposal, in which case such
shares will be voted against the proposed adjournment. In the event that the
Meeting is adjourned, the same procedures will apply at a later Meeting date.

If a Proxy that is properly executed and returned, accompanied by
instructions to withhold authority to vote (an abstention) or, represents a
broker "non-vote" (that is, a Proxy from a broker or nominee indicating that
such person has not received instructions from the beneficial owner or other
person entitled to vote shares on a particular matter with respect to which the
broker or nominee does not have discretionary power), the shares represented
thereby will be considered not to be present at the Meeting for purposes of
determining the existence of a quorum for the transaction of business and be
deemed not cast with respect to such proposal. If no instructions are received
by the broker or nominee from the shareholder with reference to routine matters,
the shares represented thereby may be considered for purposes of determining the
existence of a quorum for the transaction of business and will be deemed cast
with respect to such proposal. Also, a properly executed and returned Proxy
marked with an abstention will be considered present at the Meeting for purposes
of determining the existence of a quorum for the transaction of business.
However, abstentions and broker "non-votes" do not constitute a vote "for" or
"against" the matter, but have the effect of a negative vote on matters which
require approval by a requisite percentage of the outstanding shares.

The close of business on November 2, 1995 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
Meeting. On that date, Global Assets Portfolio had 14,562,200 Class A shares and
no Class B shares outstanding and entitled to vote.

Each share of Global Assets Portfolio will be entitled to one vote at the
Meeting. It is expected that the Notice of Special Meeting, Prospectus and Proxy
Statement and form of Proxy will be mailed to shareholders on or about November
17, 1995.

As of November 2, 1995, the Directors and Officers of the Fund, as a group,
owned less than 1% of the outstanding shares of the Global Assets Portfolio.

As of November 2, 1995, Champlain Enterprises Inc., Attn: Antony Von Elbe,
518 Rugar Street, Plattsburgh, New York owned 916,964 Class A shares
(approximately 6% of the outstanding Class A shares).

As of November 2, 1995, Prudential Securities was the record holder for
other beneficial owners of less than 1% of the outstanding Class A shares. In
the event of any meetings of shareholders, Prudential Securities will forward,
or cause the forwarding of, proxy materials to the beneficial owners for which
it is the record holder.

The expenses of reorganization and solicitation will be borne by each
Portfolio in proportion to their respective assets and will include
reimbursement of brokerage firms and others for expenses in forwarding proxy
solicitation material to shareholders. The Fund's Board of Directors has
retained Shareholder Communications Corporation, a proxy solicitation firm, to
assist in the solicitation of proxies for the Meeting. The fees and expenses of
Shareholder Communications Corporation are not expected to exceed $6,600,
excluding mailing and printing costs. The solicitation of Proxies will be
largely by mail but may include telephonic, telegraphic or oral communication by
regular employees of Prudential Securities and its affiliates, including
Prudential Mutual Fund Management, Inc. This cost, including specified expenses,
also will be borne by each Portfolio in proportion to their respective assets.

OTHER MATTERS

No business other than as set forth herein is expected to come before the
Meeting, but should any other matter requiring a vote of shareholders of Global
Assets Portfolio arise, including any question as to an adjournment of the

<PAGE>

Meeting, the persons named in the enclosed Proxy will vote thereon according to
their best judgment in the interests of Global Assets Portfolio, taking into
account all relevant circumstances.

SHAREHOLDER'S PROPOSALS

A Global Assets Portfolio shareholder proposal intended to be presented at
any subsequent meeting of the shareholders of Global Assets Portfolio must be
received by Global Assets Portfolio a reasonable time before the Directors'
solicitation relating to such meeting is made in order to be included in Global
Assets Portfolio's Proxy Statement and form of Proxy relating to that meeting.
The mere submission of a proposal by a shareholder does not guarantee that such
proposal will be included in the proxy statement because certain rules under the
federal securities laws must be complied with before inclusion of the proposal
is required. In the event that the Plan is approved at this Meeting, it is not
expected that there will be any future shareholder meetings of Global Assets
Portfolio.

It is the present intent of the Fund's Board of Directors not to hold annual
meetings of shareholders unless the election of Directors is required under the
Investment Company Act nor to hold special meetings of shareholders unless
required by the Investment Company Act or state law.

S. Jane Rose
Secretary

Dated: November 14, 1995

<PAGE>

APPENDIX A

Agreement and Plan of Reorganization and Liquidation

Agreement and Plan of Reorganization and Liquidation (Agreement) made as of
the 28th day of September, 1995, by and between Prudential Global Limited
Maturity Fund, Inc. (the Fund) Global Assets Portfolio and the Fund's Limited
Maturity Portfolio. The Fund is a corporation organized under the laws of the
State of Maryland and maintains its principal place of business at One Seaport
Plaza, New York, New York 10292. Shares of Limited Maturity Portfolio are
divided into three classes, designated Class A, Class B and Class C. The Global
Assets Portfolio offers one class of shares designated Class A.

This Agreement is intended to be, and is adopted as, a plan of
reorganization pursuant to Section 368(a)(1)(C) of the Internal Revenue Code of
1986, as amended (Internal Revenue Code). The reorganization will comprise the
transfer of all of the assets of Global Assets Portfolio to Limited Maturity
Portfolio, in exchange solely for Class A shares of the Limited Maturity
Portfolio and Limited Maturity Portfolio's assumption of Global Assets
Portfolio's liabilities, if any, and the constructive distribution, after the
Closing Date hereinafter referred to, of such Class A shares of the Limited
Maturity Portfolio to the shareholders of Global Assets Portfolio in liquidation
of Global Assets Portfolio as provided herein, all upon the terms and conditions
as hereinafter set forth.

In consideration of the premises and of the covenants and agreements set
forth herein, the parties covenant and agree as follows:

1. Transfer of Assets of Global Assets Portfolio in Exchange for Class A
shares of the Limited Maturity Portfolio and Assumption of Liabilities, if any,
and Liquidation of Global Assets Portfolio.

1.1 Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Fund, on
behalf of Global Assets Portfolio, agrees to sell, assign, transfer and
deliver Global Assets Portfolio's assets, as set forth in paragraph 1.2, to
Limited Maturity Portfolio, and the Fund, on behalf of Limited Maturity
Portfolio, agrees (a) to issue and deliver to Global Assets Portfolio in
exchange therefor the number of shares in Limited Maturity Portfolio
determined by dividing the net asset value of Global Assets Portfolio
(computed in the manner and as of the time and date set forth in paragraph
2.1) by the net asset value allocable to a share of the Limited Maturity
Portfolio (computed in the manner and as of the time and date set forth in
paragraph 2.2); and (b) to assume all of Global Assets Portfolio's
liabilities, if any, as set forth in paragraph 1.3. Such transactions shall
take place at the closing provided for in paragraph 3 (Closing).

1.2 The assets of Global Assets Portfolio to be acquired by Limited
Maturity Portfolio shall include without limitation all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable) and other property of any kind owned by Global Assets Portfolio
and any deferred or prepaid expenses shown as assets on the books of Global
Assets Portfolio on the closing date provided in paragraph 3 (Closing Date).
Limited Maturity Portfolio has no plan or intent to sell or otherwise
dispose of any assets of Global Assets Portfolio.

1.3 Except as otherwise provided herein, Limited Maturity Portfolio will
assume from Global Assets Portfolio all debts, liabilities, obligations and
duties of Global Assets Portfolio of whatever kind or nature, whether
absolute, accrued, contingent or otherwise, whether or not determinable as
of the Closing Date and whether or not specifically referred to in this
Agreement; provided, however, that Global Assets Portfolio agrees to utilize
its best efforts to discharge all of its known debts, liabilities,
obligations and duties prior to the Closing Date.

1.4 On or immediately prior to the Closing Date, Global Assets Portfolio
will declare and pay to its shareholders of record dividends and/or other
distributions so that it will have distributed substantially all (and in

A-1

<PAGE>

any event not less than ninety-eight percent) of its investment company
taxable income (computed without regard to any deduction for dividends
paid), net tax-exempt interest income, if any, and realized net capital
gains, if any, for all taxable years through its liquidation.

1.5 On a date (Liquidation Date), as soon after the Closing Date as is
conveniently practicable, Global Assets Portfolio will distribute pro rata
to its Class A shareholders of record, determined as of the close of
business on the Closing Date, the Class A shares of Limited Maturity
Portfolio received by Global Assets Portfolio pursuant to paragraph 1.1 in
exchange for their interests in Global Assets Portfolio. Such distribution
will be accomplished by opening accounts on the books of the Limited
Maturity Portfolio in the names of Global Assets Portfolio shareholders and
transferring thereto the shares credited to the account of Global Assets
Portfolio on the books of Limited Maturity Portfolio. Each account opened
shall be credited with the respective pro rata number of Limited Maturity
Portfolio Class A shares due each Global Assets Portfolio Class A
shareholder. Fractional shares of Limited Maturity Portfolio shall be
rounded to the third decimal place.

1.6 The Limited Maturity Portfolio shall not issue certificates
representing its shares in connection with such exchange. With respect to
any Global Assets Portfolio shareholder holding Global Assets Portfolio
stock certificates as of the Closing Date, until Limited Maturity Portfolio
is notified by Global Assets Portfolio's transfer agent that such
shareholder has surrendered his or her outstanding Global Assets Portfolio
stock certificates or, in the event of lost, stolen or destroyed stock
certificates, posted adequate bond or submitted a lost certificate form, as
the case may be, Limited Maturity Portfolio will not permit such shareholder
to (1) receive dividends or other distributions on Limited Maturity
Portfolio shares in cash (although such dividends and distributions shall be
credited to the account of such shareholder established on Limited Maturity
Portfolio's books pursuant to paragraph 1.5, as provided in the next
sentence), (2) exchange Limited Maturity Portfolio shares credited to such
shareholder's account for shares of other Prudential Mutual Funds, or (3)
pledge or redeem such shares. In the event that a shareholder is not
permitted to receive dividends or other distributions on Limited Maturity
Portfolio shares in cash as provided in the preceding sentence, Limited
Maturity Portfolio shall pay such dividends or other distributions in
additional Limited Maturity Portfolio shares, notwithstanding any election
such shareholder shall have made previously with respect to the payment of
dividends or other distributions on shares of Global Assets Portfolio.
Global Assets Portfolio will, at its expense, request its shareholders to
surrender their outstanding Global Assets Portfolio stock certificates, post
adequate bond or submit a lost certificate form, as the case may be.

1.7 Ownership of the Limited Maturity Portfolio shares will be shown on
the books of its transfer agent. Shares of Limited Maturity Portfolio will
be issued in the manner described in Limited Maturity Portfolio's
then-current prospectus and the Fund's then-current statement of additional
information.

1.8 Any transfer taxes payable upon issuance of shares of Limited
Maturity Portfolio in a name other than the registered holder of the shares
on the books of Global Assets Portfolio as of that time shall be paid by the
person to whom such shares are to be issued as a condition to the
registration of such transfer.

1.9 Any reporting responsibility with the Securities and Exchange
Commission (SEC) or any state securities commission of Global Assets
Portfolio is and shall remain the responsibility of Global Assets Portfolio
up to and including the Liquidation Date.

1.10 All books and records of Global Assets Portfolio, including all
books and records required to be maintained under the Investment Company Act
of 1940 (Investment Company Act) and the rules and regulations thereunder,
shall be available to Limited Maturity Portfolio from and after the Closing
Date and shall be turned over to Limited Maturity Portfolio on or prior to
the Liquidation Date.

A-2

<PAGE>

2. Valuation

2.1 The value of Global Assets Portfolio's assets and liabilities to be
acquired and assumed, respectively, by Limited Maturity Portfolio shall be
the net asset value computed as of 4:15 p.m., New York time, on the Closing
Date (such time and date being hereinafter called the Valuation Time), using
the valuation procedures set forth in Global Assets Portfolio's then-current
prospectus and the Fund's then-current statement of additional information.

2.2 The net asset value of a share of the Limited Maturity Portfolio
shall be the net asset value per such share computed as of the Valuation
Time, using the valuation procedures set forth in Limited Maturity
Portfolio's then-current prospectus and the Fund's then-current statement of
additional information.

2.3 The number of Limited Maturity Portfolio shares to be issued
(including fractional shares, if any) in exchange for Global Assets
Portfolio's net assets shall be calculated as set forth in paragraph 1.1.

2.4 All computations of net asset value shall be made by or under the
direction of Prudential Mutual Fund Management, Inc. (PMF) in accordance
with its regular practice as manager of the Funds.

3. Closing and Closing Date

3.1 Except as provided in Section 3.3, the Closing Date shall be January
19, 1995; or such later date as the parties may agree. All acts taking place
at the Closing shall be deemed to take place simultaneously as of the close
of business on the Closing Date unless otherwise provided. The Closing shall
be at the office of the Fund or at such other place as the parties may
agree.

3.2 State Street Bank and Trust Company (State Street), as custodian for
Global Assets Portfolio, shall deliver to Limited Maturity Portfolio at the
Closing a certificate of an authorized officer of State Street stating that
(a) Global Assets Portfolio's portfolio securities, cash and any other
assets have been transferred in proper form to the Limited Maturity
Portfolio on the Closing Date and (b) all necessary taxes, if any, have been
paid, or provision for payment has been made, in conjunction with the
transfer of portfolio securities.

3.3 In the event that immediately prior to the Valuation Time (a) the
New York Stock Exchange (NYSE) or other primary exchange is closed to
trading (other than prior to, or following the close of, trading on such
exchange on a regular business day) or trading thereon is restricted or (b)
trading or the reporting of trading on the NYSE or other primary exchange or
elsewhere is disrupted so that accurate appraisal of the value of the net
assets of Global Assets Portfolio and of the net asset value per share of
Limited Maturity Portfolio is impracticable, the Closing Date shall be
postponed until the first business day after the date when such trading
shall have been fully resumed and such reporting shall have been restored.

3.4 Global Assets Portfolio shall deliver to Limited Maturity Portfolio
on or prior to the Liquidation Date the names and addresses of its
shareholders and the number of outstanding shares owned by each such
shareholder, all as of the close of business on the Closing Date, certified
by the Secretary or Assistant Secretary of the Fund on behalf of Global
Assets Portfolio. Limited Maturity Portfolio shall issue and deliver to
Global Assets Portfolio at the Closing a confirmation or other evidence
satisfactory to Global Assets Portfolio that shares of the Limited Maturity
Portfolio have been or will be credited to Global Assets Portfolio's account
on the books of Limited Maturity Portfolio. At the Closing each party shall
deliver to the other such bills of sale, checks, assignments,share
certificates, receipts and other documents as such other party or its
counsel may reasonably request to effect the transactions contemplated by
this Agreement.

A-3

<PAGE>

4. Representations and Warranties

4.1 Global Assets Portfolio represents and warrants as follows:

4.1.1 Global Assets Portfolio is a portfolio of the Fund, a
corporation duly organized and validly existing under the laws of the
State of Maryland;

4.1.2 Global Assets Portfolio is a portfolio of an open-end
management investment company duly registered under the Investment
Company Act, and such registration is in full force and effect;

4.1.3 Global Assets Portfolio is not, and the execution, delivery
and performance of this Agreement on behalf of Global Assets Portfolio
will not result, in violation of any provision of the Articles of
Incorporation or By-Laws of the Fund or of any material agreement,
indenture, instrument, contract, lease or other undertaking to which
Global Assets Portfolio is a party or by which Global Assets Portfolio
is bound;

4.1.4 All material contracts or other commitments of the Fund on
behalf of Global Assets Portfolio except this Agreement will be
terminated on or prior to the Closing Date without Global Assets
Portfolio or Limited Maturity Portfolio incurring any liability or
penalty with respect thereto;

4.1.5 No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against Global Assets Portfolio
or any of its properties or assets. Global Assets Portfolio knows of no
facts that might form the basis for the institution of such proceedings,
and Global Assets Portfolio is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body that materially and adversely affects its business or its ability
to consummate the transactions herein contemplated;

4.1.6 The Portfolio of Investments, Statement of Assets and
Liabilities, Statement of Operations, Statement of Changes in Net
Assets, and Financial Highlights of Global Assets Portfolio at October
31, 1994 and for the year then ended (copies of which have been
furnished to Limited Maturity Portfolio) have been audited by Deloitte &
Touche LLP, independent accountants, in accordance with generally
accepted auditing standards. Such financial statements are prepared in
accordance with generally accepted accounting principles and present
fairly, in all material respects, the financial condition, results of
operations, changes in net assets and financial highlights of Global
Assets Portfolio as of and for the period ended on such date, and there
are no material known liabilities of Global Assets Portfolio (contingent
or otherwise) not disclosed therein;

4.1.7 Since October 31, 1994, there has not been any material
adverse change in Global Assets Portfolio's financial condition, assets,
liabilities or business other than changes occurring in the ordinary
course of business, or any incurrence by Global Assets Portfolio of
indebtedness maturing more than one year from the date such indebtedness
was incurred, except as otherwise disclosed to and accepted by Limited
Maturity Portfolio. For the purposes of this paragraph 4.1.7, a decline
in net asset value, net asset value per share or change in the number of
shares outstanding shall not constitute a material adverse change;

4.1.8 At the date hereof and at the Closing Date, all federal and
other tax returns and reports of Global Assets Portfolio required by law
to have been filed on or before such dates shall have been timely filed,
and all federal and other taxes shown as due on said returns and reports
shall have been paid insofar as due, or provision shall have been made
for the payment thereof, and, to the best of Global Assets Portfolio's
knowledge, all federal or other taxes required to be shown on any such
return or report have been shown on such return or report, no such
return is currently under audit and no assessment has been asserted with
respect to such returns;

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4.1.9 For each past taxable year since it commenced operations,
Global Assets Portfolio has met the requirements of Subchapter M of the
Internal Revenue Code for qualification and treatment as a regulated
investment company and intends to meet those requirements for the
current taxable year; and, for each past calendar year since it
commenced operations, Global Assets Portfolio has made such
distributions as are necessary to avoid the imposition of federal excise
tax or has paid or provided for the payment of any excise tax imposed;

4.1.10 All issued and outstanding shares of Global Assets Portfolio
are, and at the Closing Date will be, duly and validly authorized,
issued and outstanding, fully paid and non-assessable. All issued and
outstanding shares of Global Assets Portfolio will, at the time of the
Closing, be held in the name of the persons and in the amounts set forth
in the list of shareholders submitted to Limited Maturity Portfolio in
accordance with the provisions of paragraph 3.4. Global Assets Portfolio
does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of its shares, nor is there outstanding
any security convertible into any of its shares;

4.1.11 At the Closing Date, Global Assets Portfolio will have good
and marketable title to its assets to be transferred to Limited Maturity
Portfolio pursuant to paragraph 1.1, and full right, power and authority
to sell, assign, transfer and deliver such assets hereunder free of any
liens, claims, charges or other encumbrances, and, upon delivery and
payment for such assets, Limited Maturity Portfolio will acquire good
and marketable title thereto;

4.1.12 The execution, delivery and performance of this Agreement has
been duly authorized by the Board of Directors of the Fund on behalf of
Global Assets Portfolio and by all necessary corporate action, other
than shareholder approval, on the part of the Fund on behalf of Global
Assets Portfolio, and this Agreement constitutes a valid and binding
obligation of Global Assets Portfolio, subject to shareholder approval;

4.1.13 The information furnished and to be furnished by Global
Assets Portfolio for use in applications for orders, registration
statements, proxy materials and other documents that may be necessary in
connection with the transactions contemplated hereby is and shall be
accurate and complete in all material respects and is in compliance and
shall comply in all material respects with applicable federal securities
and other laws and regulations; and

4.1.14 On the effective date of the registration statement filed
with the SEC by the Fund on Form N-14 relating to the shares of the
Limited Maturity Portfolio issuable hereunder, and any supplement or
amendment thereto (Registration Statement), at the time of the meeting
of the shareholders of Global Assets Portfolio and on the Closing Date,
the Proxy Statement of Global Assets Portfolio, the Prospectus of the
Limited Maturity Portfolio and the Statement of Additional Information
of the Fund relating to both Global Assets Portfolio and Limited
Maturity Portfolio to be included in the Registration Statement
(collectively, Proxy Statement) (i) will comply in all material respects
with the provisions and regulations of the Securities Act of 1933 (1933
Act), Securities Exchange Act of 1934 (1934 Act) and the Investment
Company Act and the rules and regulations thereunder and (ii) will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein in light of the
circumstances under which they were made or necessary to make the
statements therein not misleading; provided, however, that the
representations and warranties in this paragraph 4.1.14 shall not apply
to statements in or omissions from the Proxy Statement and Registration
Statement made in reliance upon and in conformity with information
furnished by Limited Maturity Portfolio for use therein.

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4.2 Limited Maturity Portfolio represents and warrants as follows:

4.2.1 Limited Maturity Portfolio is a portfolio of the Fund, a
corporation duly organized and validly existing under the laws of the
State of Maryland;

4.2.2 Limited Maturity Portfolio is a portfolio of an open-end
management investment company duly registered under the Investment
Company Act, and such registration is in full force and effect;

4.2.3 Limited Maturity Portfolio is not, and the execution, delivery
and performance of this Agreement will not result, in violation of the
Fund of any provision of the Articles of Incorporation or By-Laws of the
Fund or of any material agreement, indenture, instrument, contract,
lease or other undertaking to which Limited Maturity Portfolio is a
party or by which Limited Maturity Portfolio is bound;

4.2.4 No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently
pending or threatened against Limited Maturity Portfolio or any of its
properties or assets, except as previously disclosed in writing to
Global Assets Portfolio. Limited Maturity Portfolio knows of no facts
that might form the basis for the institution of such proceedings, and
Limited Maturity Portfolio is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body that materially and adversely affects its business or its ability
to consummate the transactions herein contemplated;

4.2.5 The Portfolio of Investments, Statement of Assets and
Liabilities, Statement of Operations, Statement of Changes in Net
Assets, and Financial Highlights of Limited Maturity Portfolio at
October 31, 1994 and for the fiscal year then ended (copies of which
have been furnished to Global Assets Portfolio) have been audited by
Deloitte & Touche LLP, independent accountants, in accordance with
generally accepted auditing standards. Such financial statements are
prepared in accordance with generally accepted accounting principles and
present fairly, in all material respects, the financial condition,
results of operations, changes in net assets and financial highlights of
Limited Maturity Portfolio as of and for the period ended on such date,
and there are no material known liabilities of Limited Maturity
Portfolio (contingent or otherwise) not disclosed therein;

4.2.6 Since October 31, 1994, there has not been any material
adverse change in Limited Maturity Portfolio's financial condition,
assets, liabilities or business other than changes occurring in the
ordinary course of business, or any incurrence by Limited Maturity
Portfolio of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and accepted
by Global Assets Portfolio. For the purposes of this paragraph 4.2.6, a
decline in net asset value per share or a decrease in the number of
shares outstanding shall not constitute a material adverse change;

4.2.7 At the date hereof and at the Closing Date, all federal and
other tax returns and reports of Limited Maturity Portfolio required by
law to have been filed on or before such dates shall have been filed,
and all federal and other taxes shown as due on said returns and reports
shall have been paid insofar as due, or provision shall have been made
for the payment thereof, and, to the best of Limited Maturity
Portfolio's knowledge, all federal or other taxes required to be shown
on any such return or report are shown on such return or report, no such
return is currently under audit and no assessment has been asserted with
respect to such returns;

4.2.8 For each past taxable year since it commenced operations,
Limited Maturity Portfolio has met the requirements of Subchapter M of
the Internal Revenue Code for qualification and treatment as a regulated
investment company and intends to meet those requirements for the
current taxable year; and, for each past calendar year since it
commenced operations, Limited Maturity Portfolio has made such

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distributions as are necessary to avoid the imposition of federal excise
tax or has paid or provided for the payment of any excise tax imposed;

4.2.9 All issued and outstanding shares of Limited Maturity
Portfolio are, and at the Closing Date will be, duly and validly
authorized, issued and outstanding, fully paid and non-assessable.
Except as contemplated by this Agreement, Limited Maturity Portfolio
does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of its shares nor is there outstanding any
security convertible into any of its shares;

4.2.10 The execution, delivery and performance of this Agreement has
been duly authorized by the Board of Directors of the Fund, on behalf of
Limited Maturity Portfolio and by all necessary corporate action on the
part of the Fund, on behalf of Limited Maturity Portfolio, and this
Agreement constitutes a valid and binding obligation of the Fund, on
behalf of Limited Maturity Portfolio;

4.2.11 The shares of Limited Maturity Portfolio to be issued and
delivered to Global Assets Portfolio pursuant to this Agreement will, at
the Closing Date, have been duly authorized and, when issued and
delivered as provided in this Agreement, will be duly and validly issued
and outstanding shares of Limited Maturity Portfolio, fully paid and
non-assessable;

4.2.12 The information furnished and to be furnished by Limited
Maturity Portfolio for use in applications for orders, registration
statements, proxy materials and other documents which may be necessary
in connection with the transactions contemplated hereby is and shall be
accurate and complete in all material respects and is and shall comply
in all material respects with applicable federal securities and
other laws and regulations; and

4.2.13 On the effective date of the Registration Statement, at the
time of the meeting of the shareholders of Global Assets Portfolio and
on the Closing Date, the Proxy Statement and the Registration Statement
(i) will comply in all material respects with the provisions of the 1933
Act, the 1934 Act and the Investment Company Act and the rules and
regulations under such Acts, (ii) will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (iii) with respect to the Registration Statement, at the
time it becomes effective, it will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties in this paragraph 4.2.13 shall not apply to statements in
or omissions from the Proxy Statement and the Registration Statement
made in reliance upon and in conformity with information furnished by
Global Assets Portfolio for use therein.

5. Covenants of Limited Maturity Portfolio and Global Assets Portfolio

5.1 Global Assets Portfolio and Limited Maturity Portfolio each
covenants to operate its respective business in the ordinary course between
the date hereof and the Closing Date, it being understood that the ordinary
course of business will include declaring and paying customary dividends and
other distributions and such changes in operations as are contemplated by
the normal operations of each of them, except as may otherwise be required
by paragraph 1.4 hereof.

5.2 Global Assets Portfolio covenants to call a shareholders' meeting to
consider and act upon this Agreement and to take all other action necessary
to obtain approval of the transactions contemplated hereby (including the
determinations of its Board of Directors of the Fund as set forth in Rule
17a-8(a) under the Investment Company Act).

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5.3 Global Assets Portfolio covenants that the Limited Maturity
Portfolio shares to be received by Global Assets Portfolio in accordance
herewith are not being acquired for the purpose of making any distribution
thereof other than in accordance with the terms of this Agreement.

5.4 Global Assets Portfolio covenants that it will assist Limited
Maturity Portfolio in obtaining such information as Limited Maturity
Portfolio reasonably requests concerning the beneficial ownership of Global
Assets Portfolio's shares.

5.5 Subject to the provisions of this Agreement, each of Global Assets
Portfolio and Limited Maturity Portfolio will take, or cause to be taken,
all action, and will do, or cause to be done, all things, reasonably
necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.

5.6 Global Assets Portfolio covenants to prepare the Proxy Statement in
compliance with the 1934 Act, the Investment Company Act and the rules and
regulations under each Act.

5.7 Global Assets Portfolio covenants that it will, from time to time,
as and when requested by Limited Maturity Portfolio, execute and deliver or
cause to be executed and delivered all such assignments and other
instruments, and will take or cause to be taken such further action, as
Limited Maturity Portfolio may deem necessary or desirable in order to vest
in and confirm to Limited Maturity Portfolio title to and possession of all
the assets of Global Assets Portfolio to be sold, assigned, transferred and
delivered hereunder and otherwise to carry out the intent and purpose of
this Agreement.

5.8 Limited Maturity Portfolio covenants to use all reasonable efforts
to obtain the approvals and authorizations required by the 1933 Act, the
Investment Company Act (including the determinations of the Funds Board of
Directors as set forth in Rule 17a-8(a) thereunder) and such of the state
Blue Sky or securities laws as it may deem appropriate in order to continue
its operations after the Closing Date.

5.9 Limited Maturity Portfolio covenants that it will, from time to
time, as and when requested by Global Assets Portfolio, execute and deliver
or cause to be executed and delivered all such assignments and other
instruments, and will take and cause to be taken such further action, as
Global Assets Portfolio may deem necessary or desirable in order to (i) vest
in and confirm to Global Assets Portfolio title to and possession of all the
shares of the Limited Maturity Portfolio to be transferred to Global Assets
Portfolio pursuant to this Agreement and (ii) assume all of Global Asset
Portfolio's liabilities in accordance with this Agreement.

6. Conditions Precedent to Obligations of Global Assets Portfolio

The obligations of Global Assets Portfolio to consummate the transactions
provided for herein shall be subject to the performance by Limited Maturity
Portfolio of all the obligations to be performed by it hereunder on or before
the Closing Date and the following further conditions:

6.1 All representations and warranties of Limited Maturity Portfolio
contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date.

6.2 Limited Maturity Portfolio shall have delivered to Global Assets
Portfolio on the Closing Date a certificate executed in its name by the
President or a Vice President of the Fund on behalf of Limited Maturity
Portfolio, in form and substance satisfactory to Global Assets Portfolio and
dated as of the Closing Date, to the effect that the representations and
warranties of Limited Maturity Portfolio in this Agreement are true and
correct at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and as to such other matters as
Global Assets Portfolio shall reasonably request.

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<PAGE>

6.3 Global Assets Portfolio shall have received on the Closing Date a
favorable opinion from Shereff, Friedman, Hoffman & Goodman, LLP, counsel to
Limited Maturity Portfolio, dated as of the Closing Date, to the effect
that:

6.3.1 Limited Maturity Portfolio is a portfolio of the Fund, a
corporation which has been duly incorporated and is an existing
corporation in good standing in the State of Maryland;

6.3.2 This Agreement has been duly authorized, executed and
delivered by the Fund, on behalf of Limited Maturity Portfolio, and,
assuming due authorization, execution and delivery of the Agreement by
the Fund, on behalf of Global Assets Portfolio, is a valid and binding
obligation of Limited Maturity Portfolio enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and further subject to the qualifications set forth in the
next succeeding sentence. Such counsel may state that they express no
opinion as to the validity or enforceability of any provision regarding
choice of New York Law to govern this Agreement;

6.3.3 The shares of the Limited Maturity Portfolio to be distributed
to Global Assets Portfolio shareholders under this Agreement, assuming
their due authorization and delivery as contemplated by this Agreement,
will be validly issued and outstanding and fully paid and
non-assessable, and no shareholder of Limited Maturity Portfolio has any
pre-emptive right to subscribe therefor or purchase such shares;

6.3.4 The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, (i)
conflict with the Fund's Articles of Incorporation or By-Laws or (ii)
result in a default or a breach of (a) the Management Agreement dated
October 25, 1990 between the Fund and Prudential Mutual Fund Management,
Inc., (b) the Custodian Contract dated October 25, 1990 between the Fund
and State Street Bank and Trust Company, (c) the Distribution Agreement
(relating to Class A shares) dated August 1, 1994 and amended and
restated as of June 5, 1995 between the Fund and Prudential Mutual Fund
Distributors, Inc., and (d) the Transfer Agency and Service Agreement
dated October 25, 1990 between the Fund and Prudential Mutual Fund
Services, Inc.; provided, however, that such counsel may state that they
express no opinion in their opinion pursuant to this paragraph 6.3.4
with respect to federal or state securities laws, other antifraud laws
and fraudulent transfer laws; provided further that insofar as
performance by Limited Maturity Portfolio of its obligations under this
Agreement is concerned, such counsel may state that they express no
opinion as to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights;

6.3.5 To the knowledge of such counsel, no consent, approval,
authorization, filing or order of any court or governmental authority is
required for the consummation by Limited Maturity Portfolio of the
transactions contemplated herein, except such as have been obtained
under the 1933 Act, the 1934 Act and the Investment Company Act and such
as may be required under state Blue Sky or securities laws;

6.3.6 The Fund has been registered with the SEC as an investment
company, and, to the knowledge of such counsel, no order has been issued
or proceeding instituted to suspend such registration; and

6.3.7 Such counsel knows of no litigation or any governmental
proceeding instituted or threatened against Limited Maturity Portfolio
that would be required to be disclosed in the Registration Statement and
is not so disclosed.

In rendering such opinion, such counsel may state that insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Fund and certificates of public
officials.

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7. Conditions Precedent to Obligations of Limited Maturity Portfolio

The obligations of Limited Maturity Portfolio to complete the transactions
provided for herein shall be subject to the performance by Global Assets
Portfolio of all the obligations to be performed by it hereunder on or before
the Closing Date and the following further conditions:

7.1 All representations and warranties of Global Assets Portfolio
contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date.

7.2 Global Assets Portfolio shall have delivered to Limited Maturity
Portfolio on the Closing Date a statement of its assets and liabilities,
which statement shall be prepared in accordance with generally accepted
accounting principles consistently applied, together with a list of its
portfolio securities showing the adjusted tax bases of such securities by
lot, as of the Closing Date, certified by the Treasurer of the Fund.

7.3 Global Assets Portfolio shall have delivered to Limited Maturity
Portfolio on the Closing Date a certificate executed in its name by the
President or a Vice President of the Fund, in form and substance
satisfactory to Limited Maturity Portfolio and dated as of the Closing Date,
to the effect that the representations and warranties of Global Assets
Portfolio made in this Agreement are true and correct at and as of the
Closing Date except as they may be affected by the transactions contemplated
by this Agreement,and as to such other matters as Limited Maturity Portfolio
shall reasonably request.

7.4 On or immediately prior to the Closing Date, Global Assets Portfolio
shall have declared and paid to its shareholders of record one or more
dividends and/or other distributions so that it will have distributed
substantially all (and in any event not less than ninety-eight percent) of
its investment company taxable income (computed without regard to any
deduction for dividends paid), net tax-exempt interest income, if any, and
realized net capital gain, if any, for all taxable years through its
liquidation.

7.5 Limited Maturity Portfolio shall have received on the Closing Date a
favorable opinion from Shereff, Friedman, Hoffman & Goodman, LLP, counsel to
Global Assets Portfolio, dated as of the Closing Date, to the effect that:

7.5.1 Global Assets Portfolio is a portfolio of the Fund, a
corporation which has been duly incorporated and which is an existing
corporation in good standing under the laws of the State of Maryland;

7.5.2 This Agreement has been duly authorized, executed and
delivered by the Fund, on behalf of Global Assets Portfolio, and,
assuming due authorization, execution and delivery of the Agreement by
the Fund, on behalf of Limited Maturity Portfolio, is a valid and
binding obligation of Global Assets Portfolio enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and further subject to the qualifications set forth in the
next succeeding sentence. Such counsel may state that they express no
opinion as to the validity or enforceability of any provision regarding
choice of New York Law to govern this Agreement;

7.5.3 The execution and delivery of the Agreement did not, and the
performance by Global Assets Portfolio of its obligations hereunder will
not, (i) violate the Fund's Articles of Incorporation or By-Laws or (ii)
result in a default or a breach of the Management Agreement, dated
October 25, 1990, between the Fund and Prudential Mutual Fund
Management, Inc., the Custodian Agreement, dated October 25, 1990,
between the Fund and State Street Bank and Trust Company, the
Distribution Agreement (Class A shares),

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<PAGE>

dated August 1, 1994 and amended and restated as of June 5, 1995,
between the Fund, on behalf of the Global Assets Portfolio, and
Prudential Mutual Fund Distributors, Inc., and the Transfer Agency and
Service Agreement,dated October 25, 1990, between the Fund and
Prudential Mutual Fund Services, Inc.; provided, however, that such
counsel may state that they express no opinion in their opinion pursuant
to this paragraph 7.5.3 with respect to federal or state securities
laws, other antifraud laws and fraudulent transfer laws; provided
further that insofar as performance by Global Assets Portfolio of its
obligations under this Agreement is concerned, such counsel may state
that they express no opinion as to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;

7.5.4 To the knowledge of such counsel, no consent, approval,
authorization, filing or order of any court or governmental authority is
required for the consummation by Global Assets Portfolio of the
transactions contemplated herein, except such as have been obtained
under the 1933 Act, the 1934 Act and the Investment Company Act and such
as may be required under state Blue Sky or securities laws;

7.5.5 Such counsel knows of no litigation or any governmental
proceeding instituted or threatened against Global Assets Portfolio that
would be required to be disclosed in the Registration Statement and is
not so disclosed; and

7.5.6 The Fund has been registered with the SEC as an investment
company, and, to the knowledge of such counsel, no order has been issued
or proceeding instituted to suspend such registration.

8. Further Conditions Precedent to Obligations of Limited Maturity Portfolio
and Global Assets Portfolio

The obligations of each of Global Assets Portfolio and Limited Maturity
Portfolio hereunder are subject to the further conditions that on or before the
Closing Date:

8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of (a) the Board of Directors of the
Fund on behalf of each of Global Assets Portfolio and Limited Maturity
Portfolio, as to the determinations set forth in Rule 17a-8(a) under the
Investment Company Act, (b) the Board of Directors of the Fund on behalf of
Limited Maturity Portfolio as to the assumption by Limited Maturity
Portfolio of the liabilities of Global Assets Portfolio and (c) the holders
of the outstanding shares of Global Assets Portfolio in accordance with the
provisions of the Fund's Articles of Incorporation, and certified copies of
the resolutions evidencing such approvals shall have been delivered to
Limited Maturity Portfolio and Global Assets Portfolio.

8.2 Any proposed change to Limited Maturity Portfolio's operations that
may be approved by the Board of Directors of the Fund subsequent to the date
of this Agreement but in connection with and as a condition to implementing
the transactions contemplated by this Agreement, for which the approval of
Limited Maturity Portfolio's shareholders is required pursuant to the
Investment Company Act or otherwise, shall have been approved by the
requisite vote of the holders of the outstanding shares of the Limited
Maturity Portfolio in accordance with the Investment Company Act and the
provisions of the Fund's Articles of Incorporation, and certified copies of
the resolution evidencing such approval shall have been delivered to Global
Assets Portfolio.

8.3 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with,
this Agreement or the transactions contemplated herein.

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8.4 All consents of other parties and all consents, orders and permits
of federal, state and local regulatory authorities (including those of the
SEC and of state Blue Sky or securities authorities, including "no-action"
positions of such authorities) deemed necessary by Limited Maturity
Portfolio or Global Assets Portfolio to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of
Limited Maturity Portfolio or Global Assets Portfolio, provided that either
party hereto may for itself waive any part of this condition.

8.5 The Registration Statement shall have become effective under the
1933 Act, and no stop orders suspending the effectiveness thereof shall have
been issued, and to the best knowledge of the parties hereto, no
investigation or proceeding under the 1933 Act for that purpose shall have
been instituted or be pending, threatened or contemplated.

8.6 Global Assets Portfolio and Limited Maturity Portfolio shall have
received on or before the Closing Date a private letter ruling from the
Internal Revenue Service, or an opinion of Shereff, Friedman, Hoffman &
Goodman, LLP satisfactory to Global Assets Portfolio and to Limited Maturity
Portfolio, substantially to the effect that for federal income tax purposes:

8.6.1 The acquisition by Limited Maturity Portfolio of the assets of
Global Assets Portfolio in exchange solely for voting shares of Limited
Maturity Portfolio and the assumption by Limited Maturity Portfolio of
Global Assets Portfolio's liabilities, if any, followed by the
distribution of Limited Maturity Portfolio's voting shares by Global
Assets Portfolio pro rata to its shareholders, pursuant to its
liquidation and constructively in exchange for their Global Assets
Portfolio shares, will constitute a reorganization within the meaning of
Section 368(a)(1)(C) of the Internal Revenue Code, and Global Assets
Portfolio and Limited Maturity Portfolio each will be "a party to a
reorganization" within the meaning of Section 368(b) of the Internal
Revenue Code;

8.6.2 Global Assets Portfolio's shareholders will recognize no gain
or loss upon the constructive exchange of all of their shares of Global
Assets Portfolio solely for shares of Limited Maturity Portfolio in
complete liquidation of Global Assets Portfolio;

8.6.3 No gain or loss will be recognized to Global Assets Portfolio
upon the transfer of its assets to Limited Maturity Portfolio in
exchange solely for shares of Limited Maturity Portfolio and the
assumption by Limited Maturity Portfolio of Global Assets Portfolio's
liabilities, if any, and the subsequent distribution of those shares to
Global Assets Portfolio shareholders in complete liquidation of Global
Assets Portfolio;

8.6.4 No gain or loss will be recognized to Limited Maturity
Portfolio upon the acquisition of Global Assets Portfolio's assets in
exchange solely for shares of Limited Maturity Portfolio and the
assumption of Global Assets Portfolio's liabilities, if any;

8.6.5 Limited Maturity Portfolio's basis for those assets will be
the same as the basis thereof when held by Global Assets Portfolio
immediately before the transfer, and the holding period of such assets
acquired by Limited Maturity Portfolio will include the holding period
thereof when held by Global Assets Portfolio;

8.6.6 Global Assets Portfolio shareholders' basis for the shares of
Limited Maturity Portfolio to be received by them pursuant to the
reorganization will be the same as their basis for the shares of Global
Assets Portfolio to be constructively surrendered in exchange thereof;
and

8.6.7 The holding period of Limited Maturity Portfolio shares to be
received by Global Assets Portfolio shareholders will include the period
during which Global Assets Portfolio shares to be

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constructively surrendered in exchange therefor were held; provided
such Global Assets Portfolio shares were held as capital assets by those
shareholders on the date of the exchange.

9. Finder's Fees and Expenses

9.1 Each party hereto represents and warrants to the other that there
are no finder's fees payable in connection with the transactions provided
for herein.

9.2 The expenses incurred in connection with the entering into and
carrying out of the provisions of this Agreement shall be allocated to
Global Assets Portfolio and Limited Maturity Portfolio pro rata in a fair
and equitable manner in proportion to their respective assets.

10. Entire Agreement; Survival of Warranties

10.1 This Agreement constitutes the entire agreement between the parties
hereto.

10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder.

11. Termination

Either party hereto may at its option terminate this Agreement at or prior
to the Closing Date because of:

11.1 A material breach by the other of any representation, warranty or
covenant contained herein to be performed at or prior to the Closing Date;
or

11.2 A condition herein expressed to be precedent to the obligations of
either party not having been met and it reasonably appearing that it will
not or cannot be met; or

11.3 A mutual written agreement of the Fund on behalf of each of Global
Assets Portfolio and Limited Maturity Portfolio.

In the event of any such termination, there shall be no liability for
damages on the part of either party hereto (other than the liability of each of
them to pay their allocated expenses pursuant to paragraph 9.2) or any Director,
or officer of the Fund.

12. Amendment

This Agreement may be amended, modified or supplemented only in writing by
the parties; provided, however, that following the shareholders' meeting called
by Global Assets Portfolio pursuant to paragraph 5.2, no such amendment may have
the effect of changing the provisions for determining the number of shares of
Limited Maturity Portfolio to be distributed to Global Assets Portfolio
shareholders under this Agreement to the detriment of such shareholders without
their further approval.

13. Notices

Any notice, report, demand or other communication required or permitted by
any provision of this Agreement shall be in writing and shall be given by hand
delivery, or prepaid certified mail or overnight service addressed to Prudential
Mutual Fund Management, Inc., One Seaport Plaza, New York, New York 10292,
Attention: S. Jane Rose.

A-13

<PAGE>

14. Headings; Counterparts; Governing Law; Assignment

14.1 The paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

14.2 This Agreement may be executed in any number of counterparts, each
of which will be deemed an original.

14.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

14.4 This Agreement shall bind and inure to the benefit of the parties
and their respective successors and assigns, and no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by either
party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation other than the parties and their
respective successors and assigns any rights or remedies under or by reason
of this Agreement.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by the President or Vice President of the Fund.

Prudential Global Limited Maturity Fund, Inc.
On behalf of its Limited Maturity Portfolio

/s/ Richard A. Redeker
By:_________________________________________
President

Prudential Global Limited Maturity Fund, Inc.
On behalf of its Global Assets Portfolio

/s/ Robert F. Gunia
By:_________________________________________
Vice President

A-14

<PAGE>

APPENDIX B

Letter to Shareholders

June 9, 1995

Dear Shareholder:

Although the U.S. dollar showed continued weakness through much of the first
quarter of 1995, global bond markets are recovering from their dismal
performance in 1994. Given this environment, we are pleased to report that
the Prudential Short-Term Global Income Fund/Short-Term Global Income Portfolio
produced higher returns than the Lipper Short-Term World Multi-Market Average
for the six-month period ending April 30, 1995.

Fund Performance.

The Short-Term Global Income Portfolio's net asset value (NAV) began the
reporting period with an NAV of $8.56 for Class A, B and C shares. It finished
with NAVs of $8.33 for Class A shares and $8.36 for both Class B and C shares.
Dividends totaling $0.28 for Class A shares and $0.26 for Class B and C shares
were also paid during the period.

CUMULATIVE TOTAL RETURNS1
As of 4/30/95
6 Mos. One Year Since Inception2
<S> <C> <C> <C>
Class A 0.7% -0.7% 17.8%
Class B 0.7% -1.0% 13.9%
Class C 0.7% N/A 1.5%
Lipper ST World -1.2% 0.5% 3.5%
Fund Average3

</TABLE>

AVERAGE ANNUAL RETURNS1
As of3/31/95
One Year Since Inception2
<S> <C> <C>
Class A -4.0% 2.8%
Class B -4.4% 2.8%
Class C N/A -0.5%
</TABLE>

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
1 Source: Prudential Mutual Fund Management Inc. and Lipper Analytical Services,
Inc. Cumulative total returns do not take into account sales charges. The
average annual returns do take into account applicable sales charges. The Fund
charges a maximum front-end sales load of 3% for Class A shares. Class B shares
are subject to a declining contingent deferred sales charge (CDSC) of 3%, 2%,
1% and 1%, for four years. Class C shares have a 1% CDSC for one year. Class
B shares will automatically convert to Class A shares on a quarterly basis,
after approximately five years.
2 Inception of Class A and B 11/01/90; Class C 8/1/94.
3 This figure is the average of 44 funds in the Short-Term World Multi-Market
Average for six-months; 40 funds for one year; and 14 funds since inception
for the period ending April 30, 1995, as measured by Lipper Analytical
Services, Inc.

B-1
<PAGE>

The Fund's Objective.

The Prudential Short-Term Global Income Fund/Short-Term Global Income Portfolio
seeks to maximize total return, the components of which are current income and
capital appreciation by primarily investing in debt securities having remaining
maturities of not more than three years. The Portfolio invests in debt
securities denominated in the U.S. dollar and a range of foreign currencies.
There can be no assurance that the Fund's investment objective will be achieved.

The Portfolio is permitted to invest up to 10% of its total assets in securities
rated below investment grade with a minimum rating of "B" as determined
by Moodys' Investor Services, Standard & Poor's Ratings Group or similar
ratings agency, and in unrated securities of equivalent quality. Investments
in lower rated or unrated securities carry special risks. The Short-Term Global
Income Portfolio is non-diversified, meaning it may invest more than 5% of its
total assets in securities of one or more issuers. Investment in a
non-diversified fund carries greater risk than investment in a diversified
portfolio.

A Global View of World Markets.

Bond markets are beginning to recover from 1994's poor showing. For the
four-month period ending on April 30, 1995, the Lipper Short-Term World
Multi-Market Average posted a gain of 1.4%. Performance was generally positive
across the board in local currency terms and was further bolstered by currency
performance.

Investor perception has clearly changed with signs that the U.S. economy is
indeed slowing and responding to the aggressive interest rate policy of the
U.S. Federal Reserve. Fewer housing starts, sluggish car sales, higher
unemployment numbers and other signs pointed to a so-called "soft landing" for
the U.S. economy, and not to a recession as some had feared.

The U.S. dollar took center stage for much of the reporting period, especially
during March. Failure to pass a balanced budget amendment in Congress coupled
with slim prospects for higher U.S. interest rates served to undermine
confidence in the U.S. currency. The German central bank responded by cutting
its discount rate by 50 basis points and the Japanese followed suit by reducing
their rate by the same amount. The result: the German mark rose 6% DM and the
Japanese yen a stunning 10% -- against the U.S. dollar.

What We Did.

We strongly favored hard currencies of the major, stable economies of central
Europe, such as the German mark or Swiss franc, as strains within the European
currency mechanism developed. During the reporting period the Spanish peseta
and Portuguese escudo were devalued against the mark. This resulted in a
premium being attached to core currency holdings with strong

B-2
<PAGE>

fundamentals (marks or francs). Conversely, Sweden, Italy and Spain had
additional risk assigned to their currencies. These three nations offer some of
the highest yielding bonds in Europe and have made up some ground lost earlier
in the year. We will be carefully monitoring developments here and how they may
affect our investment positions.

The Fund's bond holdings were heavily invested in markets that tended to
perform better on the basis of currency strength and a "flight to quality" by
many investors. For instance, we were drawn to Canada and New Zealand where
significant central bank tightening and undervalued currencies made investments
especially attractive. Attractive yields, a proactive British central bank
plus a strong currency also drew us to bonds from the United Kingdom.

The Outlook.

There are indications that the current global bond rally may have run its
course. Nevertheless foreign markets will remain an attractive investment
choice for U.S. investors, because they offer the potential for better long-term
performance and add an element of diversification to most portfolios.

Please understand that there are special risks involved with foreign investing.
Foreign securities are not guaranteed and may be influenced by currency
fluctuations, political and social developments. Foreign businesses are also
not subject to the same level of risk disclosure as they would be in the United
States. These risks are described fully in the Fund prospectus.

For further insight into what may be in store for global markets, we invite you
to read the following "Portfolio Q & A" feature with new portfolio managers
Simon Wells and Gabriel Irwin.

As always, it is a pleasure to have you as a shareholder of the Prudential
Short-Term Global Income Fund/Short-Term Global Income Portfolio, where we are
committed to managing the Fund for your benefit.

Sincerely,

Simon Wells Gabriel Irwin
Portfolio Manager Portfolio Manager

Richard A. Redeker
President

B-3
<PAGE>

PORTFOLIO Q&A

We are proud to announce that Simon Wells and Gabriel Irwin have joined
Prudential Mutual Funds. They will be managing the Prudential Short-Term
Global Income Fund/Short-Term Global Income Portfolio. We talked to them
about their outlook for the global bond markets in 1995.

Q. Why have global bonds performed so well this year? How long
can it last?

A. You have to view the first quarter rally in the context of
what happened in 1994. Last year was not good for bonds anywhere
in the world. By year-end, short-term investors had been
frightened out of the market and portfolio maturities were
generally low. A number of market participants had shortened
maturities expecting rising interest rates. So when interest
rates started falling, they were forced to buy longer term bonds,
which in turn has fueled bond price increases. Such is life in
the investment world. Our belief is that there isn't much steam
left in this rally, because although world inflation is low, we
are in an economic upturn usually the most bullish environment
for bonds.

Q. Why not just buy U.S. bonds and avoid foreign risk altogether?

A. Foreign bonds do not necessarily follow the U.S.
market. One of the attractions of the foreign bond market for
risk-tolerant U.S. investors is that there are almost invariably
better return opportunities in a number of foreign countries.
Since the 1970s, the U.S. has been the best-performing market in
only one year . This year alone, the Japanese bond market has
returned nearly 25% to U.S. investors. Also, there is always a
strong case for adding foreign bonds to a domestic portfolio for
purposes of diversification.

B-4
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC. Portfolio of Invvestments
SHORT-TERM GLOBAL INCOME PORTFOLIO April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--41.1%
Australia--12.6%
Queensland Treasury
Corp.,
A$ 8,975 8.00%, 5/14/97........... $ 6,416,458
South Australia Fin.
Auth.,
7,815 12.50%, 3/15/98.......... 6,158,327
Victorian Treasury Corp.,
8,500 12.50%, 9/15/97.......... 6,654,026
------------
19,228,811
------------
Denmark--7.2%
Kingdom of Denmark,
DKr 60,100 7.00%, 8/15/97........... 10,962,281
------------
Italy--3.1%
Export Finance of Norway,
Lira 8,000,000 12.25%, 8/5/96........... 4,783,095
------------
United Kingdom--17.9%
Bayerische Hypothelsen
Bank,
(BR PD)5,000 11.125%, 6/24/96......... 8,325,679
United Kingdom Treasury
Bonds,
4,350 13.25%, 1/22/97.......... 7,616,706
5,000 8.75%, 9/1/97............ 8,188,300
2,000 7.25%, 3/30/98........... 3,148,417
------------
27,279,102
------------
United States--0.3%
Cedulas Hipotecarias
Rurales,
US$ 600 7.9%, 9/1/00............. 483,000
------------
Total long-term
investments
(cost US$63,032,550)..... 62,736,289
------------
SHORT-TERM INVESTMENTS--58.7%
Canada--11.9%
Canadian Treasury Bills,*
C$ 10,000 8.25%, 5/18/95........... $ 7,320,477
15,000 8.37%, 8/3/95............ 10,801,125
------------
18,121,602
------------
Mexico--0.1%
Mexican Tesobonos,*
US$ 114 8.40%, 8/17/95........... 108,961
------------
New Zealand--10.6%
New Zealand Treasury
Bills,*
NZ$ 11,075 8.47%, 6/21/95........... 7,347,178
13,400 9.36%, 8/2/95............ 8,815,365
------------
16,162,543
------------
Spain--0.8%
Nordic Investment Bank,
Pts 150,000 13.80%, 11/30/95......... 1,243,819
------------
United Kingdom--3.1%
United Kingdom, C.D.,
Bank of Scotland,
(BR PD)2,500 7.59%, 12/15/95.......... 4,030,526
500 7.50%, 12/19/95.......... 804,875
------------
4,835,401
------------
United States--32.2%
Joint Repurchase
Agreement Account,
US$ 7,371 5.90%, 5/1/95, (Note
5)..................... 7,371,000
United States Treasury
Bills,*
36,000 5.83%, 5/25/95........... 35,847,986
6,000 6.35%, 8/10/95........... 5,901,721
------------
49,120,707
------------
Total short-term
investments
(cost US$87,984,205)..... 89,593,033
------------
</TABLE>

B-5 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
<TABLE>
<CAPTION>
US$
Value
Description (Note 1)
<C> <S> <C>
Total Investments--99.8%
(cost US$151,016,755;
Note 4)................ $152,329,322
Other assets in excess of
liabilities--0.2%........ 310,760
------------
Net Assets--100%......... $152,640,082
------------
------------
</TABLE>

- ---------------
Portfolio securities are classified according to the security's
currency denomination.
* Percentage quoted represents yield to maturity as
of purchase date.
C.D.--Certificates of Deposit.

B-6 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets April 30, 1995
--------------
<S> <C>
Investments, at value (cost $151,016,755)................................................. $ 152,329,322
Foreign currency, at value (cost $3,232).................................................. 3,457
Receivable for investments sold........................................................... 6,664,602
Forward currency contracts--net amount receivable from counterparties..................... 3,872,066
Interest receivable....................................................................... 2,833,563
Receivable for Fund shares sold........................................................... 3,019
Deferred expenses and other assets........................................................ 31,187
--------------
Total assets.......................................................................... 165,737,216
--------------
Liabilities
Payable for investments purchased......................................................... 6,409,241
Forward currency contracts--net amount payable to counterparties.......................... 4,635,652
Payable for Fund shares reacquired........................................................ 1,295,708
Accrued expenses.......................................................................... 313,872
Dividends payable......................................................................... 259,879
Due to Distributors....................................................................... 86,549
Due to Manager............................................................................ 70,785
Withholding taxes payable................................................................. 25,448
--------------
Total liabilities..................................................................... 13,097,134
--------------
Net Assets................................................................................ $ 152,640,082
--------------
--------------
Net assets were comprised of:
Common stock, at par.................................................................... $ 18,270
Paid-in capital in excess of par........................................................ 206,344,469
--------------
206,362,739
Accumulated distributions in excess of net investment income............................ (13,456,092)
Accumulated net realized loss on investments............................................ (40,822,609)
Net unrealized appreciation on investments and foreign currencies....................... 556,044
--------------
Net assets, April 30, 1995................................................................ $ 152,640,082
--------------
--------------
Class A:
Net asset value and redemption price per share
($19,664,988 / 2,359,752 shares of common stock issued and outstanding)............... $8.33
Maximum sales charge (3.00% of offering price).......................................... .26
--------------
Maximum offering price to public........................................................ $8.59
--------------
--------------
Class B:
Net asset value, offering price and redemption price per share
($132,969,327 / 15,909,377 shares of common stock issued and outstanding)............. $8.36
--------------
--------------
Class C:
Net asset value, offering price and redemption price per share
($5,767 / 690 shares of common stock issued and outstanding).......................... $8.36
--------------
--------------
</TABLE>

See Notes to Financial Statements.

B-7

<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
April 30,
Net Investment Income 1995
-----------
<S> <C>
Income
Interest........................... $ 7,554,560
-----------
Expenses
Distribution fee--Class A.......... 15,832
Distribution fee--Class B.......... 589,813
Management fee..................... 490,580
Custodian's fees and expenses...... 265,000
Transfer agent's fees and
expenses......................... 171,000
Reports to shareholders............ 40,000
Registration fees.................. 34,000
Amortization of organization
expenses......................... 20,000
Audit fee.......................... 17,500
Directors' fees.................... 17,500
Legal.............................. 15,000
Miscellaneous...................... 8,080
-----------
Total expenses................... 1,684,305
-----------
Net investment income................ 5,870,255
-----------
Realized and Unrealized
Gain (Loss) on Investments and
Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions............ (5,033,664)
Foreign currency transactions...... 1,092,586
Written option transactions........ (800,657)
-----------
(4,741,735)
-----------
Net change in unrealized
appreciation/
depreciation of:
Investments........................ (1,968,785)
Foreign currencies................. 1,665,176
-----------
(303,609)
-----------
Net loss on investments and foreign
currencies......................... (5,045,344)
-----------
Net Increase in Net Assets
Resulting from Operations............ $ 824,911
-----------
-----------
</TABLE>

PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) April 30, October 31,
in Net Assets 1995 1994
------------ ------------
<S> <C> <C>
Operations
Net investment
income................. $ 5,870,255 $ 22,096,655
Net realized loss on
investments and
foreign currency
transactions......... (4,741,735) (35,450,639)
Net change in
unrealized
appreciation/depreciation
of investments and
foreign currencies... (303,609) 5,768,258
------------ ------------
Net increase (decrease)
in net assets resulting
from operations........ 824,911 (7,585,726)
------------ ------------
Net equalization
debits................. (165,706) --
------------ ------------
Dividends and distributions (Note 1)
Dividends from net
investment income
Class A.............. (493,233) --
Class B.............. (3,309,846) --
Class C.............. (25) --
------------ ------------
(3,803,104) --
------------ ------------
Distributions in excess
of net investment
income
Class A.............. (227,582) --
Class B.............. (1,527,191) --
Class C.............. (12) --
------------ ------------
(1,754,785) --
------------ ------------
Tax return of capital
distributions
Class A.............. -- (2,411,703)
Class B.............. -- (15,406,444)
------------ ------------
-- (17,818,147)
------------ ------------
Fund share transactions
(net of share
conversions) (Note 6)
Proceeds from shares
subscribed........... 7,275,020 11,205,281
Net asset value of
shares issued in
reinvestment of
dividends and
distributions........ 3,264,912 10,703,295
Cost of shares
reacquired........... (70,809,033) (213,168,513)
------------ ------------
Net decrease in net
assets from Fund share
transactions........... (60,269,101) (191,259,937)
------------ ------------
Total decrease........... (65,167,785) (216,663,810)
Net Assets
Beginning of period...... 217,807,867 434,471,677
------------ ------------
End of period............ $152,640,082 $217,807,867
------------ ------------
------------ ------------
</TABLE>

See Notes to Financial Statements. See Notes to Financial Statements.

B-8

<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Notes to Financial Statements
(Unaudited)

Prudential Short-Term Global Income Fund, Inc. (the ``Fund'') is registered
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company. The Fund consists of two series, namely:
Short-Term Global Income Portfolio and Global Assets Portfolio. The Fund was
incorporated in Maryland on February 21, 1990 and had no significant operations
other than the issuance of 5,000 shares each of Class A and Class B common stock
of the Short-Term Global Income Portfolio for $100,000 on September 21, 1990 to
Prudential Mutual Fund Management, Inc. (``PMF''). The Short-Term Global Income
Portfolio (the ``Portfolio'') commenced investment operations on November 1,
1990. The investment objective of the Portfolio is to maximum total return, the
components of which are current income and capital appreciation, by investing
primarily in a portfolio of investment grade debt securities denominated in U.S.
dollar and a range of foreign currencies having remaining maturities of not more
than three years. The ability of the issuers of the debt securities held by the
Fund to meet their obligations may be affected by economic developments in a
specific country or industry.

Note 1. Accounting The following is a summary of
Policies significant accounting policies
followed by the Fund, and the Portfolio in the
preparation of its financial statements.
Securities Valuation: In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current currency value. Government securities for which quotations are
available will be based on prices provided by an independent pricing service or
principal market makers. Other portfolio securities that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, will be valued at the average of the
quoted bid and asked prices provided by an independent pricing service or by
principal market makers. Any security for which the primary market is on an
exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the last bid price quoted on
such day. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Directors.

Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost which approximates market value.

In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:

(i) market value of investment securities, other assets and liabilities--at
the closing daily rate of exchange;

(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the fiscal period. Similarly, the
Fund does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of long-term debt
securities sold during the fiscal period.

Net realized loss on foreign currency transactions represents net foreign
exchange gains or losses from sales and maturities of short-term securities,
holding of foreign currencies, currency gains or losses realized between the
trade and settlement dates on security transactions, and the difference between
the amounts of interest and foreign taxes recorded on the Fund's books and the
U.S. dollar equivalent amounts actually received or paid. Net unrealized
currency gains and losses from valuing foreign currency denominated assets and
liabilities at fiscal period end exchange rates are reflected as a component of
net unrealized appreciation/depreciation on investments and foreign currencies.

B-9

<PAGE>

Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. companies as a result of,
among other factors, the possibility of political and economic instability and
the level of governmental supervision and regulation of foreign securities
markets.

Forward Currency Contracts: A forward currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current exchange rates and any
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments. Gain or loss is realized on the settlement date of
the contract equal to the difference between the settlement value of the
original and renegotiated forward contracts. This gain or loss, if any, is
included in net realized gain (loss) on foreign currency transactions. Risks may
arise upon entering into these contracts from the potential inability of the
counterparties to meet the terms of their contracts.

Options: The Fund may either purchase or write options in order to hedge against
adverse market movements or fluctuations in value caused by changes in
prevailing interest rates or foreign currency exchange rates with respect to
securities or currencies which the Fund currently owns or intends to purchase.
When the Fund purchases an option, it pays a premium and an amount equal to that
premium is recorded as an investment. When the Fund writes an option, it
receives a premium and an amount equal to that premium is recorded as a
liability. The investment or liability is adjusted daily to reflect the current
market value of the option. If an option expires unexercised, the Fund realizes
a gain or loss to the extent of the premium received or paid. If an option is
exercised, the premium received or paid is an adjustment to the proceeds from
the sale or the cost basis of the purchase in determining whether the Fund has
realized a gain or loss. The difference between the premium and the amount
received or paid on effecting a closing purchase or sale transaction is also
treated as a realized gain or loss. Gain or loss on purchased options is
included in net realized gain (loss) on investment transactions. Gain or loss on
written options is presented separately as net realized gain (loss) on written
option transactions.

The Fund, as writer of an option, has no control over whether the underlying
securities or currencies may be sold (called) or purchased (put). As a result,
the Fund bears the market risk of an unfavorable change in the price of the
security or currency underlying the written option. The Fund, as purchaser of an
option, bears the risk of the potential inability of the counterparties to meet
the terms of their contracts.

Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from security and currency
transactions are calculated on the identified cost basis. Interest income is
recorded on the accrual basis.

Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares based upon
the relative proportion of net assets of each class at the beginning of the day.
Equalization: The Fund follows the accounting practice known as equalization by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net investment
income per share is unaffected by sales or reacquisitions of the Fund's shares.
Dividends and Distributions: The Fund declares daily and pays dividends from
book basis net investment income monthly and makes distributions at least
annually of any net capital gains. Dividends and distributions are recorded on
the ex-dividend date.

Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions.

Reclassification of Capital Accounts: The Portfolio accounts and reports for
distributions to shareholders in accordance with Statement of Position 93-2:
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies. The
effect of applying this statement was to increase accumulated distributions in
excess of net investment income and decrease accumulated net realized loss on
investments by $2,627,110. This was primarily the result of net foreign currency
losses incurred for the six months ended April 30, 1995. Net investment income,
net realized gains and net assets were not affected by this change. Included in
accumulated distributions in excess of net investment income as of April 30,
1995 is $11,290,809 of equalization debits.

Federal Income Taxes: For federal income tax purposes, each portfolio in the
Fund is treated as a separate taxpaying entity. It is the Portfolio's intent to
continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its

B-10

<PAGE>

taxable income to shareholders. Therefore, no federal income tax provision is
required.

Withholding taxes on foreign interest have been provided for in accordance
with the Fund's understanding of the applicable country's tax rules and rates.
Deferred Organization Expenses: Approximately $200,000 of organization and
initial registration costs were incurred. These costs have been deferred and are
being amortized over the period of benefit not to exceed 60 months from the date
the Portfolio commenced investment operations. PMF has agreed not to redeem the
10,000 shares purchased until all organization expenses have been amortized.

Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management
(``PMF''). Pursuant to this agreement, PMF has responsibility for all investment
advisory services and supervises the subadviser's performance of such services.
PMF has entered into a subadvisory agreement with The Prudential Investment
Corporation (``PIC''); PIC furnishes investment advisory services in connection
with the management of the Fund. PMF pays for the cost of the subadviser's
services, the compensation of officers of the Fund, occupancy and certain
clerical and bookkeeping costs of the Fund. The Fund bears all other costs and
expenses.

The management fee paid PMF is computed daily and payable monthly at an
annual rate of .55 of 1% of the average daily net assets of the Portfolio.

The Portfolio has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund, and with Prudential Securities Incorporated (``PSI''), which
acts as distributor of the Class B and Class C shares of the Fund. The Portfolio
reimburses PMFD and compensates PSI for distributing and servicing the Fund's
Class A, Class B and Class C shares, pursuant to plans of distribution (the
``Class A, B and C Plans''). The distribution fees are accrued daily and payable
monthly.

Pursuant to the Class A Plan, the Portfolio reimburses PMFD for its expenses
with respect to Class A shares at an annual rate of up to .30 of 1% of the
average daily net assets of the Class A shares. Such expenses under the Class A
Plan were .15 of 1% of the average daily net assets of the Class A shares for
the six months ended April 30, 1995. PMFD pays various broker-dealers, including
PSI and Pruco Securities Corporation (``Prusec''), affiliated broker-dealers,
for account servicing fees and other expenses incurred by such broker-dealers.

PMFD has advised the Portfolio that it has received approximately $2,100 in
front-end sales charges resulting from sales of Class A shares during the six
months ended April 30, 1995. From these fees, PMFD paid such sales charges to
dealers which in turn paid commissions to salespersons.

PSI has advised the Portfolio that for the six months ended April 30, 1995,
it received approximately $278,800 in contingent deferred sales charges imposed
upon certain redemptions by Class B shareholders.

PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.

Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS'') a
With Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and
during the six months ended April 30, 1995, the Portfolio incurred fees of
approximately $130,800 for the services of PMFS. As of April 30, 1995,
approximately $20,600 of such fees were due to PMFS. Transfer agent fees and
expenses in the Statement of Operations include certain out-of-pocket expenses
paid to non-affiliates.

Note 4. Portfolio Purchases and sales of invest-
Securities ment securities, other than
short-term investments and options, for the six
months ended April 30, 1995 aggregated $103,456,830 and $181,991,600,
respectively.

The United States federal income tax basis of the Fund's investments at April
30, 1995 was substantially the same as for financial reporting purposes and,
accordingly, net unrealized appreciation of investments, for United States
federal income tax purposes was $1,312,567 (gross unrealized
appreciation--$2,304,151; gross unrealized depreciation--$991,584).

For federal income tax purposes, the Portfolio had a capital loss
carryforward as of October 31, 1994, of approximately $38,708,000 of which
$26,697,000 expires in 2001 and $12,011,000 expires in 2002. Accordingly, no
capital gains distributions are expected to be paid to shareholders until future
net gains have been realized in excess of such carryforward.

B-11

<PAGE>

Transactions in options written during the six months ended April 30, 1995
were as follows:
<TABLE>
<CAPTION>
Number of
Contracts Premiums
(000) Received
---------- ---------
<S> <C> <C>
Options outstanding at October 31,
1994................................. -- --
Options written........................ 24,626 $ 168,894
Options terminated in closing purchase
transactions......................... (24,626) (168,894)
---------- ---------
Options outstanding at April 30,
1995................................. -- --
---------- ---------
---------- ---------
</TABLE>

At April 30, 1995, the Portfolio had outstanding forward currency contracts,
both to purchase and sell foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Purchase Contracts Payable Value (Depreciation)
- ------------------ --------------- ------------ -----------
<S> <C> <C> <C>
Australian
Dollars,
expiring
5/10/95......... $ 26,489,322 $ 25,968,304 $ (521,018)
British Pounds,
expiring
5/10-6/12/95.... 3,712,652 3,750,292 37,640
Deutschemarks,
expiring
5/2-11/1/95..... 145,262,639 147,001,481 1,738,842
French Francs,
expiring
10/10/95........ 3,946,325 3,870,606 (75,719)
Japanese Yen,
expiring
6/6-6/12/95..... 10,375,235 10,405,356 30,121
Spanish Pesetas,
expiring
9/11-11/2/95.... 25,156,046 26,679,412 1,523,366
Swedish Krona,
expiring
9/29/95......... 3,120,000 3,172,701 52,701
--------------- ------------ -----------
$ 218,062,219 $220,848,152 $ 2,785,933
--------------- ------------ -----------
--------------- ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- ------------------ --------------- ------------ -----------
<S> <C> <C> <C>
Australian
Dollars,
expiring
5/10-6/13/95.... $ 45,026,076 $ 44,624,706 $ 401,370
British Pounds,
expiring
5/10-6/12/95.... 15,990,500 16,127,270 (136,770)
Canadian Dollars,
expiring
5/18/95......... 7,648,094 7,745,769 (97,675)
Deutschemarks,
expiring
5/2-11/1/95..... 163,950,682 165,880,839 (1,930,157)

<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- ------------------ --------------- ------------ -----------
<S> <C> <C> <C>
French Francs,
expiring
10/10/95........ $ 3,965,903 $ 3,989,382 $ (23,479)
Italian Lira,
expiring
5/18/95......... 2,901,114 2,950,273 (49,159)
Japanese Yen,
expiring
6/6/95.......... 10,000,000 10,112,847 (112,847)
Spanish Pesetas,
expiring
9/11-11/2/95.... 26,538,702 28,103,482 (1,564,780)
Swedish Krona,
expiring
9/29/95......... 3,140,000 3,176,022 (36,022)
--------------- ------------ -----------
$ 279,161,071 $282,710,590 $(3,549,519)
--------------- ------------ -----------
--------------- ------------ -----------
</TABLE>

Note 5. Joint The Portfolio, along with
Repurchase other affiliated registered
Agreement investment companies,
Account transfers uninvested cash
balances into a single joint account, the daily
aggregate balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or Federal agency obligations. As of April 30,
1995, the Portfolio has a 1.09% undivided interest in the repurchase agreements
in the joint account. The undivided interest for the Portfolio represents
$7,371,000 in principal amount. As of such date, each repurchase agreement in
the joint account and the value of the collateral therefor were as follows:

Bear, Stearns & Co., 5.92%, in the principal amount of $125,000,000,
repurchase price $125,061,667, due 5/1/95. The value of the collateral including
accrued interest is $127,647,875.

UBS Securities Inc., 5.93%, in the principal amount of $100,000,000,
repurchase price $100,049,417, due 5/1/95. The value of the collateral including
accrued interest is $102,062,500.

Morgan Stanley and Co., Inc., 5.93%, in the principal amount of $225,000,000,
repurchase price $225,111,188, due 5/1/95. The value of the collateral including
accrued interest is $229,640,625.

CS First Boston Corp., 5.93%, in the principal amount of $225,000,000,
repurchase price $225,111,188, due 5/1/95. The value of the collateral including
accrued interest is $229,640,625.

B-12

<PAGE>

Note 6. Capital The Portfolio currently offers
Class A, Class B and Class C shares. Class A
shares are sold with a front-end sales charge of up to 3.0%. Class B shares are
sold with a contingent deferred sales charge which declines from 3% to zero
depending on the period of time the shares are held. Class C shares are sold
with a contingent deferred sales charge of 1% during the first year. Class B
shares will automatically convert to Class A shares on a quarterly basis
approximately five years after purchase.

The Fund has authorized 1.5 billion shares of common stock at $.001 par value
per share equally divided into Class A, B and C shares. Of the 18,269,819 shares
of common stock issued and outstanding at April 30, 1995, PMF owned 10,000
shares.

Transactions in shares of common stock for the six months ended April 30,
1995 and the year ended October 31, 1994 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Six months ended
April 30, 1995:
Shares sold................... 754,368 $ 6,127,022
Shares issued in reinvestment
of
dividends and
distributions............... 52,804 435,218
Shares reacquired............. (2,433,145) (20,204,154)
----------- -------------
Net decrease in shares
outstanding before
conversion.................. (1,625,973) (13,641,914)
Shares issued upon conversion
from Class B................ 615,866 5,109,638
----------- -------------
Net decrease in shares
outstanding................. (1,010,107) $ (8,532,276)
----------- -------------
----------- -------------
Year ended October 31, 1994:
Shares sold................... 551,897 $ 4,763,324
Shares issued in reinvestment
of
dividends and
distributions............... 194,713 1,743,925
Shares reacquired............. (3,776,033) (34,191,806)
----------- -------------
Net decrease in shares
outstanding................. (3,029,423) $ (27,684,557)
----------- -------------
----------- -------------
<CAPTION>
Class B Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Six months ended
April 30, 1995:
Shares sold................... 135,676 $ 1,142,480
Shares issued in reinvestment
of
dividends and
distributions............... 338,189 2,829,669
Shares reacquired............. (6,032,300) (50,604,879)
----------- -------------
Net decrease in shares
outstanding before
conversion.................. (5,558,435) (46,632,730)
Shares reacquired upon
conversion into Class A..... (614,385) (5,109,638)
----------- -------------
Net decrease in shares
outstanding................. (6,172,820) $ (51,742,368)
----------- -------------
----------- -------------
Year ended October 31, 1994:
Shares sold................... 710,218 $ 6,441,757
Shares issued in reinvestment
of
dividends and
distributions............... 1,001,413 8,959,370
Shares reacquired............. (20,015,210) (178,976,707)
----------- -------------
Net decrease in shares
outstanding................. (18,303,579) $(163,575,580)
----------- -------------
----------- -------------
<CAPTION>
Class C
- ------------------------------
<S> <C> <C>
Six months ended
April 30, 1995:
Shares sold................... 664 $ 5,518
Shares issued in reinvestment
of dividends and
distributions............... 3 25
----------- -------------
Net increase in shares
outstanding................. 667 $ 5,543
----------- -------------
----------- -------------
August 1, 1994* through
October 31, 1994:
Shares sold................... 23 $ 200
----------- -------------
Increase in shares
outstanding................. 23 $ 200
----------- -------------
----------- -------------
</TABLE>

- ---------------
* Commencement of offering of Class C shares.

B-13

<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, ---------------------------------------------
1995 1994 1993 1992 1991
--------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period....................... $ 8.56 $ 9.29 $ 9.16 $ 9.97 $ 10.00
--------- ------- ------- -------- --------
Income from investment
operations
Net investment income.......... .30 .70 .97 .96 1.03
Net realized and unrealized
gain (loss) on investment and
foreign currency
transactions................. (.25) (.86) (.26) (.95) (.02)
--------- ------- ------- -------- --------
Total from investment
operations................. .05 (.16) .71 .01 1.01
--------- ------- ------- -------- --------
Less distributions
Dividends from net investment
income....................... (.28) -- (.58) (.82) (1.03)
Tax return of capital
distributions................ -- (.57) -- -- --
Distributions from net capital
gains........................ -- -- -- -- (.01)
--------- ------- ------- -------- --------
Total distributions.......... (.28) (.57) (.58) (.82) (1.04)
--------- ------- ------- -------- --------
Net asset value, end of
period....................... $ 8.33 $ 8.56 $ 9.29 $ 9.16 $ 9.97
--------- ------- ------- -------- --------
--------- ------- ------- -------- --------
TOTAL RETURN#:................. 0.68% (1.89)% 7.96% (0.07)% 10.41%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)........................ $19,665 $28,841 $59,458 $101,358 $105,148
Average net assets (000)....... $21,284 $38,000 $70,347 $119,171 $51,830
Ratios to average net assets:
Expenses, including
distribution fees.......... 1.36%* 1.17% 1.02% 1.08% 1.01%
Expenses, excluding
distribution fees.......... 1.21%* 1.02% .87% .93% .86%
Net investment income........ 7.14%* 7.67% 10.81% 9.93% 10.23%
Portfolio turnover rate........ 110% 232% 307% 180% 66%
</TABLE>

- ---------------
* Annualized.
# Total return does not consider the effects of sales loads. Total
return is calculated assuming a purchase of shares on the first
day and a sale on the last day of each period reported and
includes reinvestment of dividends and distributions. Total
returns for periods of less than a full year are not annualized.

See Notes to Financial Statements.

B-14

<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Class B Class C
---------------------------------------------------------------- --------------------
Six August 1,
Six Months Months 1994D
Ended Year Ended October 31, Ended Through
April 30, ----------------------------------------------- April 30, October 31,
1995 1994 1993 1992 1991 1995 1994
------------ -------- -------- -------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period.... $ 8.56 $ 9.29 $ 9.16 $ 9.97 $ 10.00 $ 8.56 $ 8.61
------------ -------- -------- -------- -------- ------ --------
Income from investment
operations
Net investment income.... .27 .62 .88 .88 .95 .27 .14
Net realized and
unrealized gain (loss)
on investment and
foreign currency
transactions........... (.21) (.86) (.26) (.95) (.02) (.21) (.06)
------------ -------- -------- -------- -------- ------ --------
Total from investment
operations........... .06 (.24) .62 (.07) .93 .06 .08
------------ -------- -------- -------- -------- ------ --------
Less distributions
Dividends from net
investment
income................. (.26) -- (.49) (.74) (.95) (.26) --
Tax return of capital
distributions.......... -- (.49) -- -- -- -- (.13)
Distributions from net
capital gains.......... -- -- -- -- (.01) -- --
------------ -------- -------- -------- -------- ------ --------
Total distributions.... (.26) (.49) (.49) (.74) (.96) (.26) (.13)
------------ -------- -------- -------- -------- ------ --------
Net asset value, end of
period................. $ 8.36 $ 8.56 $ 9.29 $ 9.16 $ 9.97 $ 8.36 $ 8.56
------------ -------- -------- -------- -------- ------ --------
------------ -------- -------- -------- -------- ------ --------
TOTAL RETURN#:........... 0.72% (2.62)% 7.00% (0.86)% 9.51% 0.72% 0.75%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).................. $132,969 $188,966 $375,013 $606,899 $669,086 $5,767@ $200@
Average net assets
(000).................. $158,586 $281,143 $474,175 $814,734 $349,607 $1,161@ $199@
Ratios to average net
assets:
Expenses, including
distribution fees.... 1.96%* 1.97% 1.87% 1.93% 1.87% 1.78%* .93%*
Expenses, excluding
distribution fees.... 1.21%* 1.02% .87% .93% .87% 1.03%* .18%*
Net investment
income............... 6.51%* 6.82% 9.42% 9.05% 9.46% 6.72%* 7.02%*
Portfolio turnover
rate................... 110% 232% 307% 180% 66% 110% 232%
<FN>
- ---------------
* Annualized.
D Commencement of offering of Class C shares.
@ Figures are actual and not rounded to the nearest thousand.
# Total return does not consider the effects of sales loads. Total
return is calculated assuming a purchase of shares on the first
day and a sale on the last day of each period reported and
includes reinvestment of dividends and distributions. Total
returns for periods of less than a full year are not annualized.
</FN>
</TABLE>

See Notes to Financial Statements.

B-15

<PAGE>

Directors

Stephen C. Eyre
Delayne Dedrick Gold
Don G. Hoff
Harry A. Jacobs, Jr.
Sidney R. Knafel
Robert E. La Blanc
Lawrence C. McQuade
Thomas A. Owens, Jr.
Richard A. Redeker
Clay T. Whitehead

Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary

Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292

Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101

Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport PlazaNew York, NY 10292

Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171

Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906

Independent Accountants
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281

Legal Counsel
Shereff, Friedman, Hoffman & Goodman
919 Third Avenue
New York, NY 10022

Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll Free (800) 225-1852, Collect (908) 417-7555

The accompanying financial statements as of April 30, 1995 were
not audited and, accordingly, no opinion is expressed on them.

This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.

74436H101
74436H200 MF 144E2
74436H507 (LOGO) Cat #4443640

B-16
<PAGE>

SEMI-ANNUAL REPORT April 30, 1995

Prudential
Short-Term Global Income Fund, Inc.

(ICON)

Short-Term
Global Income
Portfolio

(LOGO)

<PAGE>

Letter to Shareholders

December 19, 1994

Dear Shareholder:

Difficult is a kind word for the market environment that faced global fixed
income funds over the past 12 months, affecting the Prudential Short-Term
Global Income Fund / Short-Term Global Income Portfolio and the entire asset
group. The volatile interest rate and currency market conditions in 1994 were
to global fixed income instruments what 1987 was to equities -- extremely
unfavorable. Nevertheless, we are pleased to have this opportunity to update
you on your Fund's activities. Performance, although negative, and weaker
against the universe over the latter part of the year, was slightly below other
similar funds of this type for the 12-month period covered by this report, as
reflected in the Lipper Short-Term Multi-Market Average shown below.

<TABLE>
HISTORICAL TOTAL RETURNS1
As of October 31, 1994
<CAPTION>
One Year Since Inception2
<S> <C> <C>
Class A -1.9% +17.0%
Class B -2.6 +13.1
Class C N/A +0.8
Lipper ST World
Multi-Mkt Avg.3 0.7 N/A
</TABLE>

<TABLE>
HISTORICAL TOTAL RETURNS4
As of September 30, 1994
<CAPTION>
One Year Since Inception2
<S> <C> <C>
Class A -4.4% +3.1%
Class B -5.3 +2.7
Class C N/A N/A
</TABLE>

1 Source: Prudential Mutual Fund Management. Past performance is not a
guarantee of future results. Investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost. These figures do not take into account sales
charges.
2 Inception dates: 11/01/90 Class A and Class B; 8/1/94 Class C.
3 This is the average of 63 funds for one year in the Short-Term World
Multi-Market Average, according to Lipper Analytical Services, Inc.
4 Source: Prudential Mutual Fund Management. These figures take into account
applicable sales charges. The Fund charges a maximum sales load of 3% for Class
A shares. Class B shares are subject to a declining contingent deferred sales
charge of 3%, 2%, 1% and 1% during the first four years. Class C shares are
subject to a 1% contingent deferred sales charge on shares redeemed during the
first year. Class C performance is not yet applicable since the share class has
only been in existence since August.
-1-

B-17
<PAGE>

Fund Overview

The Fund invests primarily in short-term, worldwide debt securities with
remaining maturities of not more than three years. The Fund's net asset value
as of October 31, 1994 was $8.56 for Class A, Class B and Class C shares. The
Fund also paid dividends of $0.57 per Class A share, $0.49 per Class B shares
and $0.13 per Class C shares for the 12-month period ended October 31, 1994.

Bond Markets

In sharp contrast to the positive market environment of 1993 that offered
strong opportunities in bond and currency markets, 1994 was hard on both
fronts. Led by dollar bloc countries (US, Canada, Australia and New Zealand),
world growth surged in 1994. Unfortunately, strong growth, while hailed
positively on most fronts, is NOT a scenario that generally behooves bond
investors. Inflation concerns, accompanied by upward interest rate pressures,
weighed very heavily on bond prices this year. The result was negative return
in almost every bond market around the world, including the United States. This
environment impacted global fixed income funds and your Fund.

The US Federal Reserve's tightening moves were followed by hikes in other
dollar bloc bond markets. European bond holdings, which dramatically helped the
Fund in 1993, produced much more mixed results in 1994. During the first half
of the year, as European economies began to recover and Central Banks
stimulated with short-term rate cuts, short-term bonds outperformed the long
end of most markets. Subsequently, the depth and speed with which the same
economies rebounded resulted in sharp reversals of monetary policy, and their
bond markets gave back significant ground.

The dramatic rise in market interest rates in many countries far exceeded
official interest rate hikes, affecting the performance of the portfolio. We
have moved to shorter-dated maturities to reduce price volatility and, in the
process, have locked in quite attractive yields. We are poised to take
advantage of some limited emerging market opportunities which should add value
in a static or rising interest rate environment. These include attractively
priced securities in Argentina and Brazil (most dollar-denominated, including
some floating rate notes).

Currency Markets

Further confounding the environment for global funds was the volatile trading
pattern exhibited by the U.S. dollar. While rising interest rates in the US
(accompanied by a cumulative hike of 225 basis points engineered by the Federal
Reserve) would in most periods have pushed the US dollar higher, concerns about
trade policy with Japan, our chronic (and rising) current account deficit, and
general lack of confidence about US policy in general instead weighed the
dollar down -- certainly relative to the Japanese yen, and even compared to
some of the slower-growing countries of Europe.
-2-

B-18
<PAGE>

US interest rates in combination with flat European rates did not strengthen
the dollar as we had anticipated. During the first and second quarters of 1994,
we hedged a significant portion of the Fund's assets back into US dollars and
missed some opportunities in the Yen and Deutschemark when the US dollar
recovery failed to materialize. During the third quarter, we captured some
positive currency movement when we repositioned the Fund by removing some
hedges, but were unable to offset the losses completely.

Outlook

While this year has been a tough one, there has been a positive aspect for
funds such as this Fund. In the process of seeking to protect the portfolio,
we have been able to capture some higher yielding coupons that will increase
the income stream to the Fund. Looking forward, we believe there will be relief
from the volatility experienced in the global bond environment over the past
year, and that the current level of interest rates worldwide will provide some
opportunity for a more positive performance in the coming year.

As always, it is a pleasure to have you as a shareholder of the Prudential
Short-Term Global Income Fund / Short-Term Global Income Portfolio and to take
this opportunity to report our activities to you.

Sincerely,

Lawrence C. McQuade
President

Jeffrey E. Brummette
Portfolio Manager

-3-
B-19
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC. Portfolio of Investments
SHORT-TERM GLOBAL INCOME PORTFOLIO October 31, 1994
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--61.7%
Australia--13.5%
Australian Gov't. Bonds,
A$ 10,500# 13.00%, 7/15/96......... $ 8,289,330
New South Wales Treasury
Corp.,
8,000# 8.50%, 3/1/96........... 5,921,098
Victorian Treasury
Corp.,
12,765# 12.50%, 7/15/96......... 9,987,162
Western Australia
Treasury
Corp.,
7,000# 10.00%, 1/15/97......... 5,259,261
------------
29,456,851
------------
Brazil--1.3%
Republic of Brazil,
BRL 3,528 6.06%, 1/1/01........... 2,888,550
------------
Canada--3.1%
Canadian Gov't. Bonds,
C$ 9,000 7.75%, 9/15/96.......... 6,664,904
------------
Denmark--4.2%
Danish Gov't. Bullet,
DKr 53,050 9.00%, 11/15/96......... 9,155,884
------------
France--3.0%
Gov't. of France,
FF 34,000 6.50%, 10/12/96......... 6,521,884
------------
Ireland--2.6%
Irish Gov't. Bonds,
IEP 3,500 9.00%, 7/30/96.......... 5,692,959
------------
Italy--3.0%
Export Finance of
Norway,
Lira 8,000,000 12.25%, 8/5/96.......... 5,291,360
Italian Gov't. BTP,
2,000,000 10.00%, 8/1/96.......... 1,281,500
------------
6,572,860
------------
Mexico--1.5%
Mexican Treasury
Bills,**
MP 13,947# 14.13%, 10/10/96........ $ 3,170,600
------------
Spain--4.3%
Kingdom of Spain,
Pts 1,000,000 11.90%, 7/15/96......... 8,177,941
Nordic Investment Bank,
150,000 13.80%, 11/30/95........ 1,247,907
------------
9,425,848
------------
Sweden--3.0%
Statens Bostad Housing
Fund,
SKr 45,000 12.50%, 1/23/97......... 6,463,944
------------
United Kingdom--16.2%
Bayerische Hypothelsen
Bank,
(BR PD)5,000 11.13%, 6/24/96......... 8,487,924
United Kingdom Treasury
Bonds,
10,350 13.25%, 1/22/97......... 18,569,794
5,000 8.75%, 9/1/97........... 8,223,550
------------
35,281,268
------------
United States--6.0%
Cedulas Hipotecarias
Rurales,
US$ 4,400 7.90%, 9/1/00........... 3,971,000
Republic of Argentina
Bote,
23,000 4.94%, 5/31/96.......... 9,108,000
------------
13,079,000
------------
Total long-term
investments
(cost
US$133,117,733)....... 134,374,552
------------
SHORT-TERM INVESTMENTS--38.6%
Canada--4.1%
Canadian Treasury
Bills,**
C$ 9,640 7.90%, 6/29/95.......... 6,841,845
</TABLE>

See Notes to Financial Statements.

-4-
B-20
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
Canada--cont'd.
Ontario Province
Canada,**
C$ 3,000 6.00%, 3/21/95.......... $ 2,166,712
------------
9,008,557
------------
Mexico--8.3%
Mexican Treasury
Bills,**
MP 6,900# 14.30%, 12/8/94......... 1,980,402
24,500# 14.50%, 12/8/94......... 7,031,863
19,490# 13.20%, 9/7/95.......... 5,062,817
15,288# 13.10%, 9/21/95......... 3,952,223
------------
18,027,305
------------
New Zealand--15.0%
New Zealand Gov't.
Bonds,
NZ$ 26,000 10.00%, 2/15/95......... 16,080,847
New Zealand Treasury
Bills,**
9,000 6.82%, 11/9/94.......... 5,491,066
1,400 7.02%, 11/9/94.......... 854,166
1,500 7.10%, 12/7/94.......... 916,586
15,489 7.56%, 1/11/95.......... 9,388,376
------------
32,731,041
------------
United States--11.2%
Joint Repurchase
Agreement Account,
US$ 8,847 4.77%, 11/1/94 (Note
5).................... 8,847,000
Mexican Tesobonos,**
5,695 8.69%, 7/27/95.......... 5,360,841
2,632 8.35%, 8/3/95........... 2,473,829
8,200 8.41%, 8/17/95.......... 7,681,119
------------
24,362,789
------------
Total short-term
investments
(cost
US$82,568,380)........ 84,129,692
------------
OUTSTANDING OPTIONS
PURCHASED*--0.2%
Currency Call Options
A$ 32,000 Australian Dollars,
expiring 11/23/94
@A$.7413.............. $ 156,768
(YEN) 15,000 Japanese Yen,
expiring 5/5/95
@(YEN)105.50.......... 40,500
------------
197,268
------------
Currency Put Options
(YEN) 12,300 Japanese Yen,
expiring 1/26/95
@(YEN)93.70........... 99,630
------------
Cross-Currency Put Options
5,820
Deutschemarks,
expiring 1/12/95
@DM972.30 per Italian
DM 9,700 Lira..................
15,000 @DM974.16 per Italian
Lira.................. 2,985
27,400 expiring 1/20/95
@DM4.6015 per Swedish
Krona................. 69,048
------------
77,853
------------
Total outstanding
options
purchased
(cost US$1,481,065)... 374,751
------------
Total Investments--100.5%
(cost $217,167,178; Note
4).................... 218,878,995
Liabilities in excess of
other
assets--(0.5)%........ (1,071,128)
------------
Net Assets--100%........ $217,807,867
------------
------------
</TABLE>
- ---------------
Portfolio securities are classified according to the security's
currency denomination.

# Principal amount segregated as collateral for
forward currency contracts. Aggregate value of
segregated securities--$50,654,756.
* Non-income producing security.
** Percentage quoted represents yield to maturity
as of purchase date.
(D) Expressed in thousands of local currency units.

-5- See Notes to Financial Statements.

B-21
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
<TABLE>
<CAPTION>
October 31, 1994
----------------
<S> <C>
Statement of Assets and Liabilities

Assets
Investments, at value (cost $217,167,178)............................................... $218,878,995
Foreign currency, at value (cost $47,559)............................................... 48,834
Interest receivable..................................................................... 4,029,767
Forward currency contracts--net amount receivable from counterparties................... 2,755,484
Receivable for Fund shares sold......................................................... 28,298
Deferred expenses and other assets...................................................... 49,197
----------------
Total assets........................................................................ 225,790,575
----------------
Liabilities
Forward currency contracts--net amount payable to counterparties........................ 3,754,380
Payable for Fund shares reacquired...................................................... 3,244,590
Dividends payable....................................................................... 385,050
Accrued expenses........................................................................ 271,445
Due to Distributors..................................................................... 128,803
Due to Manager.......................................................................... 105,402
Withholding taxes payable............................................................... 93,038
----------------
Total liabilities................................................................... 7,982,708
----------------
Net Assets.............................................................................. $217,807,867
----------------
----------------
Net assets were comprised of:
Common stock, at par.................................................................. $ 25,452
Paid-in capital in excess of par...................................................... 266,606,388
----------------
266,631,840
Accumulated distributions in excess of net investment income.......................... (10,975,642)
Accumulated net realized loss on investments.......................................... (38,707,984)
Net unrealized appreciation on investments and foreign currencies..................... 859,653
----------------
Net assets, October 31, 1994............................................................ $217,807,867
----------------
----------------
Class A:
Net asset value and redemption price per share
($28,841,436 / 3,369,859 shares of common stock issued and outstanding)............. $8.56
Maximum sales charge (3.00% of offering price)........................................ .26
----------------
Maximum offering price to public...................................................... $8.82
----------------
----------------
Class B:
Net asset value, offering price and redemption price per share
($188,966,231 / 22,082,197 shares of common stock issued and outstanding)........... $8.56
----------------
----------------
Class C:
Net asset value, offering price and redemption price per share
($200.23 / 23.401 shares of common stock issued and outstanding).................... $8.56
----------------
----------------
</TABLE>

See Notes to Financial Statements.
-6-

B-22
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
October 31,
Net Investment Income 1994
------------
<S> <C>
Income
Interest (net of foreign
withholding
taxes of $106,062)............... $ 28,076,745
------------
Expenses
Distribution fee--Class A.......... 57,000
Distribution fee--Class B.......... 2,679,726
Management fee..................... 1,755,285
Custodian's fees and expenses...... 671,000
Transfer agent's fees and
expenses......................... 425,000
Reports to shareholders............ 180,000
Registration fees.................. 58,000
Amortization of organization
expenses......................... 40,000
Audit fee.......................... 35,000
Directors' fees.................... 35,000
Legal.............................. 26,000
Miscellaneous...................... 18,079
------------
Total expenses................... 5,980,090
------------
Net investment income................ 22,096,655
------------
Realized and Unrealized
Gain (Loss) on Investments and
Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions............ (23,776,265)
Foreign currency transactions...... (13,261,084)
Written option transactions........ 1,595,280
Future transactions................ (8,570)
------------
(35,450,639)
------------
Net change in unrealized
appreciation/
depreciation of:
Investments........................ 7,302,972
Foreign currencies................. (1,578,939)
Written options.................... 44,225
------------
5,768,258
------------
Net loss on investments, foreign
currencies and written options..... (29,682,381)
------------
Net Decrease in Net Assets
Resulting from Operations............ $ (7,585,726)
------------
------------
</TABLE>

PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
Increase (Decrease) ---------------------------
in Net Assets 1994 1993
------------ ------------
<S> <C> <C>
Operations
Net investment
income................. $ 22,096,655 $ 52,264,411
Net realized loss on
investments and
foreign currency
transactions......... (35,450,639) (52,043,418)
Net change in
unrealized
appreciation/depreciation
of investments and
foreign currencies... 5,768,258 37,156,133
------------ ------------
Net increase (decrease)
in net assets resulting
from operations........ (7,585,726) 37,377,126
------------ ------------
Net equalization
debits................. -- (7,869,071)
------------ ------------
Dividends and distributions (Note 1)
Dividends from net
investment income
Class A.............. -- (4,363,707)
Class B.............. -- (25,199,590)
------------ ------------
-- (29,563,297)
------------ ------------
Tax return of capital
distributions
Class A.............. (2,411,703) --
Class B.............. (15,406,444) --
------------ ------------
(17,818,147) --
------------ ------------
Fund share transactions
(Note 6)
Proceeds from shares
subscribed........... 11,205,281 39,187,479
Net asset value of
shares issued in
reinvestment of
dividends and
distributions........ 10,703,295 17,172,475
Cost of shares
reacquired........... (213,168,513) (330,090,306)
------------ ------------
Net decrease in net
assets from Fund share
transactions........... (191,259,937) (273,730,352)
------------ ------------
Total decrease........... (216,663,810) (273,785,594)
Net Assets
Beginning of year........ 434,471,677 708,257,271
------------ ------------
End of year.............. $217,807,867 $434,471,677
------------ ------------
------------ ------------
</TABLE>

See Notes to Financial Statements. See Notes to Financial Statements.
-7-

B-23
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Notes to Financial Statements

In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, takes
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:

(i) market value of investment securities, other assets and liabilities--at
the closing daily rate of exchange;

(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal year, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the fiscal year. Similarly, the
Fund does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of long-term debt
securities sold during the fiscal year.

Net realized loss on foreign currency transactions represents net foreign
exchange gains or losses from sales and maturities of short-term securities,
holding of foreign currencies, currency gains or losses realized between the
trade and settlement dates on security transactions, and the difference between
the amounts of interest and foreign taxes recorded on the Fund's books and the
U.S. dollar equivalent amounts actually received or paid. Net unrealized
currency gains and losses from valuing foreign currency denominated assets and
liabilities at fiscal year end exchange rates are reflected as a component of
net unrealized appreciation/depreciation on investments and foreign currencies.

Foreign security and currency transactions may involve certain considerations
and risks not typically associated with
-8-

B-24
<PAGE>

those of U.S. companies as a result of, among other factors, the possibility of
political and economic instability and the level of governmental supervision
and regulation of foreign securities markets.

Forward Currency Contracts: The Fund enters into forward currency contracts in
order to hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. A forward contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward rate. The gain
or loss arising from the difference between the settlement value of the original
and renegotiated forward contracts, if any, is isolated and is included in net
realized gain (loss) from foreign currency transactions. Risks may arise upon
entering into these contracts from the potential inability of the counterparties
to meet the terms of their contracts.

Option Writing: When the Fund writes an option, an amount equal to the premium
received by the Fund is recorded as a liability and is subsequently adjusted to
the current market value of the option written. Premiums received from writing
options which expire unexercised are treated by the Fund on the expiration date
as realized gains from securities or currencies based on the type of option
written. The difference between the premium and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is also treated
as a realized gain, or if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss. If a call option is exercised,
the premium is added to the proceeds from the sale of the underlying security or
currency in determining whether the Fund has realized a gain or loss. If a put
option is exercised, the premium reduces the cost basis of the securities or
currencies purchased by the Fund. The Fund as writer of an option may have no
control over whether the underlying securities or currencies may be sold
(called) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security or currency underlying the
written option.

Reclassification of Capital Accounts: The Portfolio accounts and reports for
distributions to shareholders in accordance with Statement of Position 93-2:
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies. The
effect of applying this statement was to increase accumulated distributions in
excess of net investment income by $27,093,822, decrease accumulated net
realized loss on investments by $23,439,669 and increase paid-in capital by
$3,654,153. This was primarily the result of net foreign currency losses
incurred for the fiscal year ended October 31, 1994. Net investment income, net
realized gains and net assets were not affected by this change. Included in
accumulated distributions in excess of net investment income as of October 31,
1994 is $11,125,103 of equalization debits.

B-25
<PAGE>

Note 2. Agreements The Fund has a management
agreement with PMF. Pursuant to this agreement,
PMF has responsibility for all investment advisory services and supervises the
subadviser's performance of such services. PMF has entered into a subadvisory
agreement with The Prudential Investment Corporation (``PIC''); PIC furnishes
investment advisory services in connection with the managment of the Fund. PMF
pays for the cost of the subadviser's services, the compensation of officers of
the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The
Fund bears all other costs and expenses.

The management fee paid PMF is computed daily and payable monthly at an
annual rate of .55 of 1% of the average daily net assets of the Portfolio.

Pursuant to the Class A Plan, the Portfolio reimburses PMFD for its expenses
with respect to Class A shares at an annual rate of up to .30 of 1% of the
average daily net assets of the Class A shares. Such expenses under the Class A
Plan were .15 of 1% of the average daily net assets of the Class A shares for
the fiscal year ended October 31, 1994. PMFD pays various broker-dealers,
including PSI and Pruco Securities Corporation (``Prusec''), affiliated
broker-dealers, for account servicing fees and other expenses incurred by such
broker-dealers.

On July 19, 1994, shareholders of the Portfolio approved amendments to the
Class B distribution plan under which the Class B distribution plan became a
compensation plan, effective August 1, 1994. Prior thereto, the Class B
distribution plan was a reimbursement plan, under which PSI was reimbursed for
expenses actually incurred by it up to the amount permitted under the Class B
Plan. The Portfolio is not obligated to pay any prior or future excess
distribution costs (costs incurred by PSI in excess of distribution fees paid by
the Fund or contingent deferred sales charges received by PSI). The Portfolio
began offering Class C shares on August 1, 1994.

Pursuant to the Class B and C Plans, the Portfolio compensates PSI for
distribution-related activities at an annual rate of up to 1% of the average
daily net assets of both the Class B and C shares. Such expenses under the Class
B Plan were charged at an effective rate of .95 of 1% of the average daily net
assets of the Class B shares for the fiscal year ended October 31, 1994 and are
currently charged at a rate of .75 of 1% of the average daily net assets of the
Class B shares. Such expenses under the Class C Plan were charged at .75 of 1%
of the average daily net assets of the Class C shares for the fiscal year ended
October 31, 1994.

PMFD has advised the Portfolio that it has received approximately $15,000 in
front-end sales charges resulting from sales of Class A shares during the fiscal
year ended October 31, 1994. From these fees, PMFD paid such sales charges to
dealers which in turn paid commissions to salespersons.

PSI has advised the Portfolio that for the fiscal year ended October 31,
1994, it received approximately $1,291,500 in contingent deferred sales charges
imposed upon certain redemptions by Class B shareholders.

PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.

Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS'') a
With Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and
during the fiscal year ended October 31, 1994, the Portfolio incurred fees of
approximately $368,900 for the services of PMFS. As of October 31, 1994,
approximately $24,100 of such fees were due to PMFS. Transfer agent fees and
expenses in the Statement of Operations include certain out-of-pocket expenses
paid to non-affiliates.

Note 4. Portfolio Purchases and sales of invest-
Securities ment securities, other than
short-term investments and options, for the fiscal
year ended October 31, 1994 aggregated $595,732,470 and $826,634,833,
respectively.

The United States federal income tax basis of the Fund's investments at
October 31, 1994 was substantially the same as for financial reporting purposes
and, accordingly, net unrealized appreciation of investments, for United States
federal income tax purposes was $1,711,817 (gross unrealized
appreciation--$3,837,980; gross unrealized depreciation--$2,126,163).

B-26
<PAGE>

Transactions in options written during the year ended October 31, 1994 were
as follows:

<TABLE>
<CAPTION>
Number of
Contracts Premiums
(000) Received
--------- -----------
<S> <C> <C>
Options outstanding at
October 31, 1993................. 30,500 $ 230,275
Options written.................... 808,475 4,633,666
Options terminated in closing
purchase transactions............ (625,575) (3,723,804)
Options expired.................... (157,600) (593,882)
Options exercised.................. (55,800) (546,255)
--------- -----------
Options outstanding at
October 31, 1994................. -- --
--------- -----------
--------- -----------
</TABLE>

At October 31, 1994, the Portfolio had outstanding forward currency
contracts, both to purchase and sell foreign currencies, as follows:

<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Purchase Contracts Payable Value (Depreciation)
- ------------------ --------------- ------------ -----------
<S> <C> <C> <C>
Australian
Dollars,
expiring
11/28/94........ $ 10,000,000 $ 10,014,548 $ 14,548
Canadian Dollars,
expiring
11/14/94........ 21,585,502 21,497,829 (87,673)
Deutschemarks,
expiring
11/7-11/30/94... 174,593,203 175,115,626 522,423
Italian Lira,
expiring
12/13/94........ 15,625,681 15,880,098 254,417
Japanese Yen,
expiring
11/7-11/18/94... 34,058,007 34,168,798 110,791
Spanish Pesetas,
expiring
12/22/94........ 13,495,279 13,617,258 121,979
Swedish Krona,
expiring
11/7/94......... 3,997,331 3,911,744 (85,587)
--------------- ------------ -----------
$ 273,355,003 $274,205,901 $ 850,898
--------------- ------------ -----------
--------------- ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- ------------------ --------------- ------------ -----------
<S> <C> <C> <C>
Australian
Dollars,
expiring
11/28/94-
1/6/95.......... $ 40,376,270 $ 40,538,994 $ (162,724)
Canadian Dollars,
expiring
11/14/94........ 26,000,000 25,941,819 58,181

<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- ------------------ --------------- ------------ -----------
<S> <C> <C> <C>
Deutschemarks,
expiring
11/7-11/30/94... $ 176,275,718 $177,005,919 $ (730,201)
French Francs,
expiring
11/18/94........ 6,574,879 6,548,585 26,294
Italian Lira,
expiring
12/13/94........ 15,544,328 15,880,098 (335,770)
Japanese Yen,
expiring
11/7-11/14/94... 12,814,751 13,054,249 (239,498)
Spanish Pesetas,
expiring
12/22/94........ 17,889,590 18,160,408 (270,818)
Swedish Krona,
expiring
11/7/94......... 11,600,110 11,563,002 37,108
Swiss Francs,
expiring
11/14/94........ 15,173,823 15,406,189 (232,366)
--------------- ------------ -----------
$ 322,249,469 $324,099,263 $(1,849,794)
--------------- ------------ -----------
--------------- ------------ -----------
</TABLE>

Note 5. Joint The Portfolio, along with
Repurchase other affiliated registered
Agreement investment companies, trans-
Account fers uninvested cash balances
into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or Federal agency obligations. As of October 31, 1994, the
Portfolio has a 0.98% undivided interest in the repurchase agreements in the
joint account. The undivided interest for the Portfolio represents $8,847,000 in
principal amount. As of such date, each repurchase agreement in the joint
account and the value of the collateral therefor were as follows:

Smith Barney, Inc., 4.80%, in the principal amount of $260,000,000,
repurchase price $260,034,667, due 11/1/94. The value of the collateral
including accrued interest is $265,200,122.

Nomura Securities International, Inc., 4.77%, in the principal amount of
$100,000,000, repurchase price $100,013,250, due 11/1/94. The value of the
collateral including accrued interest is $102,000,391.

Goldman, Sachs & Co., 4.75%, in the principal amount of $275,000,000,
repurchase price $275,036,285, due 11/1/94. The value of the collateral
including accrued interest is $280,500,611.
-11-

B-27
<PAGE>

CS First Boston Corp., 4.75%, in the principal amount of $265,000,000,
repurchase price $265,034,965, due 11/1/94. The value of the collateral
including accrued interest is $271,053,272.

The Fund has authorized 1.5 billion shares of common stock at $.001 par value
per share equally divided into Class A, B and C shares. Of the 25,452,079 shares
of common stock issued and outstanding at October 31, 1994, PMF owned 10,000
shares.

Transactions in shares of common stock for the fiscal years ended October 31,
1994 and 1993 were as follows:

<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Year ended October 31, 1994:
Shares sold................... 551,897 $ 4,763,324
Shares issued in reinvestment
of
dividends and
distributions............... 194,713 1,743,925
Shares reacquired............. (3,776,033) (34,191,806)
----------- -------------
Net decrease in shares
outstanding................. (3,029,423 $ (27,684,557)
----------- -------------
----------- -------------
Year ended October 31, 1993:
Shares sold................... 2,800,748 $ 25,157,507
Shares issued in reinvestment
of
dividends................... 334,726 3,006,237
Shares reacquired............. (7,797,277) (69,726,785)
----------- -------------
Net decrease in shares
outstanding................. (4,661,803) $ (41,563,041)
----------- -------------
----------- -------------
<CAPTION>
Class B Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Year ended October 31, 1994:
Shares sold................... 710,218 $ 6,441,757
Shares issued in reinvestment
of
dividends and
distributions............... 1,001,413 8,959,370
Shares reacquired............. (20,015,210) (178,976,707)
----------- -------------
Net decrease in shares
outstanding................. (18,303,579) $(163,575,580)
----------- -------------
----------- -------------
Year ended October 31, 1993:
Shares sold................... 1,558,807 $ 14,029,972
Shares issued in reinvestment
of
dividends................... 1,575,399 14,166,238
Shares reacquired............. (29,032,710) (260,363,521)
----------- -------------
Net decrease in shares
outstanding................. (25,898,504) $(232,167,311)
----------- -------------
----------- -------------
<CAPTION>
Class C
- ------------------------------
<S> <C> <C>
August 1, 1994* through
October 31, 1994:
Shares sold................... 23 $ 200
----------- -------------
Increase in shares
outstanding................. 23 $ 200
----------- -------------
----------- -------------
</TABLE>
- ---------------
* Commencement of offering of Class C shares.
-12-

B-28
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
SHORT-TERM GLOBAL INCOME PORTFOLIO
Financial Highlights

Class A Class B Class C
---------------------------------------------- ---------------------------------------------- ----------
August 1,
1994(D)
through
Year Ended October 31, Year Ended October 31, October
---------------------------------------------- ---------------------------------------------- 31,
1994 1993 1992 1991 1994 1993 1992 1991 1994
---------- -------- -------- -------- ---------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE
OPERATING
PERFORMANCE:
Net asset value,
beginning of
period........ $ 9.29 $ 9.16 $ 9.97 $ 10.00 $ 9.29 $ 9.16 $ 9.97 $ 10.00 $ 8.61
---------- -------- -------- -------- ---------- -------- -------- -------- ------

Income from
investment
operations
Net investment
income........ .70 .97 .96 1.03 .62 .88 .88 .95 .14
Net realized and
unrealized
gain (loss) on
investment and
foreign
currency
transactions... (.86) (.26) (.95) (.02) (.86) (.26) (.95) (.02) (.06)
---------- -------- -------- -------- ---------- -------- -------- -------- -----
Total from
investment
operations... (.16) .71 .01 1.01 (.24) .62 (.07) .93 .08
---------- -------- -------- -------- ---------- -------- -------- -------- -----
Less
distributions
Dividends from
net investment
income........ -- (.58) (.82) (1.03) -- (.49) (.74) (.95) --
Tax return of
capital
distributions... (.57) -- -- -- (.49) -- -- -- (.13)
Distributions
from net
capital
gains......... -- -- -- (.01) -- -- -- (.01) --
---------- -------- -------- -------- ---------- -------- -------- -------- -----
Total
distributions... (.57) (.58) (.82) (1.04) (.49) (.49) (.74) (.96) (.13)
---------- -------- -------- -------- ---------- -------- -------- -------- -----
Net asset value,
end of
period........ $ 8.56 $ 9.29 $ 9.16 $ 9.97 $ 8.56 $ 9.29 $ 9.16 $ 9.97 $ 8.56
---------- -------- -------- -------- ---------- -------- -------- -------- -----
---------- -------- -------- -------- ---------- -------- -------- -------- -----

TOTAL
RETURN#:...... (1.89)% 7.96% (0.07)% 10.41% (2.62)% 7.00% (0.86)% 9.51% 0.75%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end
of period
(000)......... $28,841 $59,458 $101,358 $105,148 $188,966 $375,013 $606,899 $669,086 $200@
Average net
assets
(000)......... $38,000 $70,347 $119,171 $51,830 $281,143 $474,175 $814,734 $349,607 $199@
Ratios to average net
assets:(D)(D)
Expenses,
including
distribution
fees........ 1.17% 1.02% 1.08% 1.01% 1.97% 1.87% 1.93% 1.87% .93%*
Expenses,
excluding
distribution
fees........ 1.02% .87% .93% .86% 1.02% .87% .93% .87% .18%*
Net investment
income...... 7.67% 10.81% 9.93% 10.23% 6.82% 9.42% 9.05% 9.46% 7.02%*
Portfolio
turnover
rate.......... 232% 307% 180% 66% 232% 307% 180% 66% 232%
<FN>
- ---------------
* Annualized.
(D) Commencement of offering of Class C shares.
(D)(D) Because of the event referred to in (D) and the timing of such, the
ratios for the Class C shares are not necessarily comparable to that of
Class A or B shares and are not necessarily indicative of future ratios.
@ Figures are actual and not rounded to the nearest thousand.
# Total return does not consider the effects of sales loads. Total return
is calculated assuming a purchase of shares on the first day and a sale
on the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods of less than a
full year are not annualized.
</FN>
</TABLE>

See Notes to Financial Statements.
-13-

B-29
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Shareholders and Board of Directors
Prudential Short-Term Global Income Fund, Inc.
Short-Term Global Income Portfolio

We have audited the accompanying statement of assets and liabilities of
Prudential Short-Term Global Income Fund, Inc., Short-Term Global Income
Portfolio, including the portfolio of investments, as of October 31, 1994, the
related statements of operations for the year then ended and of changes in net
assets for each of the two years in the period then ended, and the financial
highlights for each of the four years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential
Short-Term Global Income Fund, Inc., Short-Term Global Income Portfolio, as of
October 31, 1994, the results of its operations, the changes in its net assets
and its financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.

Deloitte & Touche LLP
New York, New York
December 16, 1994
-14-

B-30
<PAGE>

Past performance is not predictive of future performance and an investor's
shares may be worth more or less than their original cost.

These graphs are furnished to you in accordance with SEC regulations. They
compare a $10,000 investment in Prudential Short-Term Global Income Fund, Inc.
Short-Term Global Income Portfolio (Class A, Class B and Class C) with a similar
investment in the J.P. Morgan Global Short-Term Index (GSTI) by portraying the
initial account values at the commencement of operations of each class and
subsequent account values at the end of each fiscal year (October 31) beginning
in 1990 for Class A and Class B shares and 1994 for Class C shares. For purposes
of the graphs and, unless otherwise indicated, the accompanying tables, it has
been assumed that (a) the current maximum sales charge was deducted from the
initial $10,000 investment in Class A shares; (b) the maximum applicable
contingent deferred sales charge was deducted from the value of the investment
in Class B shares and Class C shares, assuming full redemption on October 31,
1994; (c) all recurring fees (including management fees) were deducted; and (d)
all dividends and distributions were reinvested. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately five
years after purchase. This conversion feature is expected to be implemented on
or about February 1995 and is not reflected in the graph.

The GSTI is a weighted index of liquid, short-term government bonds of the
following countries: Belgium, Sweden, Germany, Australia, Canada, Denmark,
France, Italy, Japan, Netherlands, Spain, U.S. and U.K. The GSTI is an unmanaged
index and changes in market capitalization in the GSTI are revised monthly. The
GSTI does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Fund. The securities which comprise the
GSTI may differ substantially from the securities in the Fund's portfolio. The
GSTI is not the only index that may be used to characterize performance of
global income funds and other indices may portray different comparative
performance.
-15-

B-31
<PAGE>

Directors
Stephen C. Eyre
Delayne Dedrick Goldx
Don G. Hoff
Harry A. Jacobs, Jr.
Sidney R. Knafel
Robert E. La Blanc
Thomas A. Owens, Jr.
Richard A. Redeker
Clay T. Whitehead

Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace Torres, Treasurer
S. Jane Rose, Secretary

Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292

Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101

Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292

Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171

Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906

Independent Accountants
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281

Legal Counsel
Shereff, Friedman, Hoffman & Goodman
919 Third Avenue
New York, NY 10022

Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852, Collect (908) 417-7555

This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.

74436H101
74436H200 MF 144E2
74436H507 (LOGO) Cat #44436320

ANNUAL REPORT October 31, 1994

Prudential
Short-Term
Global Income
Fund, Inc.

(ICON)

Short-Term
Global Income
Portfolio

(LOGO)

B-32
<PAGE>

APPENDIX C
Letter to Shareholders

June 9, 1995
Dear Shareholder:

Although the U.S. dollar showed continued weakness through much of the
first quarter of 1995, global bond markets began to recover from their dismal
performance in 1994. Given this environment, we are pleased to report that
the Prudential Short-Term Global Income Fund/Global Assets Portfolio produced
returns exceeding those of the Lipper Short-Term World Multi-Market Average
for the six months ending April 30, 1995.

Fund Performance.

The Global Assets Portfolio began the reporting period with an NAV of $1.80 and
ended it with an NAV of $1.79.

CUMULATIVE TOTAL RETURNS1
<TABLE>
<CAPTION>
As of 4/30/95
6 Mos. One Year Since Inception2
<S> <C> <C> <C>
Class A* 1.8% 1.5% 14.7%
Lipper ST World -1.2% -0.5% 3.5%
Fund Average3
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS1
As of 3/31/95
One Year Since Inception2
<S> <C> <C>
Class A 0.5% 2.9%

</TABLE>

1 Source: Prudential Mutual Fund Management Inc. and Lipper Analytical Services,
Inc. Cumulative total returns do not take into account sales charges. The
average annual returns do take into account applicable sales charges.
The Fund charges a maximum front-end sales load of 0.99% for Class A shares.
2 Inception of Class A shares 2/15/91.
3 This figure is the average of 44 funds in the Short-Term World
Multi-Market Average for six-months; 40 funds for one year; and
14 funds since inception for the period ending April 30, 1995, as
measured by Lipper Analytical Services, Inc.
* Class B shares are no longer offered and ceased operations on May 9, 1994.

-1-

C-1
<PAGE>

The Fund's Objective.

The Prudential Short-Term Global Income Fund/Global Assets Portfolio
seeks high current income with minimum risk to principal by investing in a
portfolio of high-quality debt securities having remaining maturities of not
more than one year. The Fund also seeks high current yields by investing in
debt securities denominated in the U.S. dollar and a range of foreign
currencies. There can be no assurance that the Fund's investment
objective will be achieved.

The Global Assets Portfolio is non-diversified, meaning it may invest more
than 5% of its total assets in securities of one or more issuers. Investment
in a non-diversified fund carries greater risk than investment in a
diversified portfolio.

A Global View of World Markets.

Bond markets are beginning to recover from 1994's poor showing. For the
four-month period ending on April 30, 1995, the Lipper Short-Term World
Multi-Market Average posted a gain of 1.4%. Performance was generally
positive across the board in local currency terms and was further bolstered
by currency performance.

Investor perception has clearly changed with signs that the U.S. economy
is indeed slowing and responding to the aggressive interest rate policy of
the U.S. Federal Reserve. Fewer housing starts, sluggish car sales,
higher unemployment numbers and other signs pointed to a so-called "soft
landing" for the U.S. economy and not the recession as some had feared.

The U.S. dollar took center stage for much of the reporting period, especially
during March. Failure to pass a balanced budget amendment in Congress
coupled with slim prospects for higher U.S. interest rates served to undermine
confidence in the U.S. currency. The German central bank responded by cutting
its discount rate by 50 basis points and the Japanese followed suit by reducing
their money rate by the same amount. The result: the German mark rose 6% and
the Japanese yen a stunning 10% against the U.S. dollar.

What We Did.

Your Fund held a strong bias toward hard currencies in Europe, such as
the German mark or Swiss franc, as strains within the European currency
mechanism developed. During the reporting period the Spanish peseta and
Portuguese escudo were devalued against the mark. This resulted in a premium
being attached to core currency holdings with stronger fundamentals (e.g.
marks or francs). Conversely, peripheral markets, such as Sweden, Italy and
Spain had additional risk assigned to their currencies. Although these three

-2-

C-2
<PAGE>

nations offer some of the highest yielding issues in Europe and have made up
some of the lost ground from earlier in the year, they remain highly
volatile environments and we are avoiding them.

The Fund's bond holdings were heavily invested in core bond markets, which
tended to perform better on the basis of currency strength and a "flight to
quality" by many investors. For instance, we were drawn to Canada and
New Zealand where significant central bank/tightening and undervalued
currencies made investments especially attractive. Attractive
yields, a proactive British central bank plus a strong currency
also drew us to bonds from the United Kingdom.

The Outlook.

There are indications that the current global bond rally may have
run its course. Nevertheless foreign markets will remain an
attractive investment choice for U.S. investors, because they
offer the potential for better long-term performance and add an
element of diversification to most portfolios.

For further insight into what may be in store for global markets, we
invite you to read the following "Portfolio Q & A" feature with new
portfolio managers Simon Wells and Gabriel Irwin.

As always, it is a pleasure to have you as a shareholder of the Prudential
Short-Term Global Income Fund/Global Assets Portfolio, where we
are committed to managing the Fund for your benefit.

Sincerely,
Simon Wells Gabriel Irwin
Portfolio Manager Portfolio Manager

Richard A. Redeker
President

-3-

C-3
<PAGE>

PORTFOLIO Q&A

We are proud to announce that Simon Wells and
Gabriel Irwin have joined Prudential Mutual Funds. They will be
managing the Prudential Short-Term Global Income Fund/Global
Assets Portfolio. We talked to them about their outlook for the
global bond markets in 1995.

Q. Why have global bonds performed so well this year? How long can it last?

A. You have to view the first quarter rally in the context of what happened
in 1994. Last year was not good for bonds anywhere in the world. By year-end,
short-term investors had been frightened out of the market and portfolio
maturities were generally low. A number of market participants had shortened
maturities expecting rising interest rates. So when interest rates started
falling, they were forced to buy longer term bonds, which in turn has fueled
bond price increases. Such is life in the investment world. Our belief is
that there isn't much steam left in this rally, because although world
inflation is low, we are in an economic upturn usually the most bullish
environment for bonds.

Q. Why not just buy U.S. bonds and avoid foreign risk altogether?

A. Foreign bonds do not necessarily follow the U.S. market. One of the
attractions of the foreign bond market for risk-tolerant U.S. investors is
that there are almost invariably better return opportunities in a number
of foreign countries. Since the 1970s, the U.S. has been the best-performing
market in only one year -- 1984. This year alone, the Japanese bond market has
returned nearly 25% to U.S. investors. Also, there is always a strong case for
adding foreign bonds to a domestic portfolio for purposes of diversification.

-4-

C-4
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC. Portfolio of Investments
GLOBAL ASSETS PORTFOLIO April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
Australia--8.6%
Australian Government
Treasury Notes,*
A$ 3,900 8.60%, 5/24/95........... $ 2,821,325
-----------
Canada--11.8%
Canadian Treasury Bills,*
C$ 1,960 8.16%, 6/22/95........... 1,423,584
1,000 7.88%, 6/29/95........... 725,393
1,350 8.37%, 8/3/95............ 972,101
1,000 6.88%, 8/10/95........... 718,956
-----------
3,840,034
-----------
New Zealand--14.2%
New Zealand Treasury
Bills,*
NZ$ 7,000 9.65%, 7/5/95............ 4,636,427
-----------
United Kingdom--4.9%
United Kingdom, C.D.,
BP 1,000 7.59%, 12/15/95.......... 1,612,210
-----------
United States--61.6%
Joint Repurchase
Agreement Account,
5.93%, 5/1/95, (Note
US$ 760 5)..................... $ 760,000
United States Treasury
Bills,*
18,500 5.83%, 5/25/95........... 18,425,699
1,000 6.36%, 8/10/95........... 983,620
-----------
20,169,319
-----------
Total Investments--101.1%
(cost US$32,879,834; Note
4)..................... 33,079,315
Liabilities in excess of
other
assets--(1.1%)........... (352,816)
-----------
Net Assets--100%......... $32,726,499
-----------
-----------
</TABLE>

- ------------------
Portfolio securities are classified by country according to the
security's currency denomination.
C.D.--Certificates of Deposit.
* Percentage quoted represents yield to maturity as of purchase date.

See Notes to Financial Statements.

-5-

C-5
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets April 30, 1995
--------------
<S> <C>
Investments, at value (cost $32,879,834).................................................. $ 33,079,315
Cash...................................................................................... 42,209
Foreign currency, at value (cost $1,577).................................................. 1,704
Receivable for Fund shares sold........................................................... 893,924
Forward currency contracts--net amount receivable from counterparties..................... 815,697
Interest receivable....................................................................... 46,308
Deferred expenses and other assets........................................................ 13,159
--------------
Total assets............................................................................ 34,892,316
--------------
Liabilities
Payable for Fund shares reacquired........................................................ 1,010,348
Forward currency contracts--net amount payable to counterparties.......................... 960,661
Accrued expenses.......................................................................... 122,892
Dividends payable......................................................................... 42,087
Management fee payable.................................................................... 15,625
Distribution fee payable.................................................................. 14,204
--------------
Total liabilities....................................................................... 2,165,817
--------------
Net Assets................................................................................ $ 32,726,499
--------------
--------------
Net assets were comprised of:
Common stock, at par.................................................................... $ 18,311
Paid-in capital in excess of par........................................................ 48,662,533
--------------
48,680,844
Accumulated distribution in excess of net investment income............................. (5,072,919)
Accumulated net realized loss on investments............................................ (10,936,814)
Net unrealized appreciation on investments and foreign currencies....................... 55,388
--------------
Net assets, April 30, 1995................................................................ $ 32,726,499
--------------
--------------
Class A:
Net asset value and redemption price per share ($32,726,499 / 18,310,543 shares of
common stock
issued and outstanding)............................................................... $1.79
Maximum sales charge (.99% of offering price)........................................... .02
--------------
Maximum offering price to public........................................................ $1.81
--------------
--------------
</TABLE>

See Notes to Financial Statements.

-6-

C-6
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income April 30, 1995
--------------
<S> <C>
Income
Interest........................... $ 1,482,747
--------------
Expenses
Management fee..................... 111,146
Distribution fee--Class A.......... 101,042
Custodian's fees and expenses...... 115,000
Transfer agent's fees and
expenses........................... 29,000
Reports to shareholders............ 18,000
Directors' fees.................... 17,500
Legal fees......................... 14,000
Audit fee.......................... 12,500
Registration fees.................. 10,000
Amortization of organization
expenses........................... 6,000
Miscellaneous...................... 2,359
--------------
Total expenses................... 436,547
--------------
Net investment income................ 1,046,200
--------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized loss on:
Investment transactions............ (352,728)
Foreign currency transactions...... (188,157)
Written option transactions........ (116,184)
--------------
(657,069)
--------------
Net change in unrealized
appreciation/ depreciation of:
Investments........................ 285,612
Foreign currencies................. (156,764)
--------------
128,848
--------------
Net loss on investments, foreign
currencies and written options..... (528,221)
--------------
Net Increase in Net Assets
Resulting from Operations............ $ 517,979
--------------
--------------
</TABLE>

PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months Year
Net Increase (Decrease) Ended Ended
in Net Assets April 30, 1995 October 31, 1994
-------------- ----------------
<S> <C> <C>
Operations
Net investment income... $ 1,046,200 $ 3,377,861
Net realized loss on
investments and
foreign currency
transactions.......... (657,069) (3,538,581)
Net change in unrealized
appreciation/depreciation
of investments and
foreign currencies.... 128,848 540,308
-------------- ----------------
Net increase in net
assets resulting from
operations............ 517,979 379,588
-------------- ----------------
Contingent deferred sales
charges collected....... -- 8,161
-------------- ----------------
Dividends and
distributions
(Note 1)
Dividends from net
investment income
Class A............... (451,861) --
-------------- ----------------
Dividends in excess of
net investment income
Class A............... (497,874) (117,091)
Class B............... -- (411)
-------------- ----------------
(497,874) (117,502)
-------------- ----------------
Tax return of capital
distributions
Class A............... -- (3,826,815)
Class B............... -- (13,439)
-------------- ----------------
-- (3,840,254)
-------------- ----------------
Fund share transactions
(Note 6)
Net proceeds from shares
subscribed............ 1,136,130 4,822,020
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions......... 703,121 2,685,643
Cost of shares
reacquired.............. (19,218,376) (82,912,800)
-------------- ----------------
Net decrease in net
assets from Fund share
transactions.......... (17,379,125) (75,405,137)
-------------- ----------------
Total decrease............ (17,810,881) (78,975,144)
Net Assets
Beginning of period....... 50,537,380 129,512,524
-------------- ----------------
End of period............. $ 32,726,499 $ 50,537,380
-------------- ----------------
-------------- ----------------
</TABLE>

See Notes to Financial Statements.

-7-

C-7
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Notes to Financial Statements
(Unaudited)

Prudential Short-Term Global Income Fund, Inc. (the ``Fund''), registered
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company, was incorporated in Maryland on February 21,
1990. The Fund consists of two series, namely: Short-Term Global Income
Portfolio and Global Assets Portfolio. The Global Assets Portfolio (the
``Portfolio'') commenced investment operations on February 15, 1991. The
investment objective of the Portfolio is to seek high current income with
minimum risk to principal, by investing primarily in high-quality debt
securities in the U.S. and abroad having remaining maturities of not more than
one year. The ability of the issuers of the debt securities held by the Fund to
meet their obligations may be affected by economic developments in a specific
country or industry.

Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund, and the Portfolio in
the preparation of its financial statements.
Securities Valuation: In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current exchange rate. Government securities for which quotations are
available will be based on prices provided by an independent pricing service or
principal market makers. Other portfolio securities that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, will be valued at the average of the
quoted bid and asked prices provided by an independent pricing service or by
principal market makers. Any security for which the primary market is on an
exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the last bid price quoted on
such day. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Directors.

(i) market value of investment securities, other assets and liabilities--at
the closing daily rate of exchange;

(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the period, the Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the market
prices of securities held at period end. Similarly, the Fund does not isolate
the effect of changes in foreign exchange rates from the fluctuations arising
from changes in the market prices of debt securities sold during the period.
Accordingly, such realized foreign currency gains and losses are included in the
reported net realized gains/losses on investment transactions.

Net realized losses on foreign currency transactions represents net foreign
exchange gains and losses from sales and maturities of short-term securities and
forward currency contracts, holding of foreign currencies, currency gains or
losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of interest and foreign
taxes recorded on the Fund's books and the U.S. dollar equivalent amounts
actually received or paid. Net currency gains and losses from valuing foreign
currency denominated assets (excluding investments) and liabilities at period
end exchange rates are reflected as a component of net unrealized
appreciation/depreciation on investments and foreign currencies.

Foreign security and currency transactions may involve certain considerations
and risks not typically associated with

-8-

C-8
<PAGE>

Forward Currency Contracts: A forward currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current exchange rates and any
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments. Gain or loss is realized on the settlement date of
the contract equal to the difference between the settlement value of the
original and renegotiated forward contracts. This gain or loss, if any, is
isolated and is included in net realized gain (loss) from foreign currency
transactions. Risks may arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.

Equalization: The Fund follows the accounting practice known as equalization by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net investment
income per share is unaffected by sales or reacquisitions of the Fund's shares.
Dividends and Distributions: The Fund declares daily and pays dividends from
book basis net investment income monthly and makes distributions at least
annually of any net capital gains. Dividends and distributions are recorded on
the ex-dividend date.

Reclassification of Capital Accounts: The Portfolio accounts and reports for
distributions to shareholders in accordance with Statement of Position 93-2;
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies. The
effect of applying this statement was to increase accumulated distributions in
excess of net investment income and decrease accumulated net realized loss on
investments by $556,802. This was primarily the result of net foreign currency
losses incurred for the six months ended April 30, 1995. Net investment income,
net realized gains and net assets were not affected by this change. Included in
accumulated distributions in excess of net investment income as of April 30,
1995 is $4,505,980 of equalization debits.

Withholding taxes on foreign interest have been provided for in accordance
with the Fund's understanding of the applicable country's tax rules and rates.
Deferred Organization Expenses: Approximately $60,000 of organization and
initial registration costs were incurred. These costs have been deferred and are
being amortized over the period of benefit not to exceed 60 months from the date
the Portfolio commenced investment operations.

-9-

C-9

<PAGE>

Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management,
Inc. (``PMF''). Pursuant to this agreement, PMF has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PMF has entered into a subadvisory agreement with The Prudential
Investment Corporation (``PIC''); PIC furnishes investment advisory services in
connection with the management of the Fund. PMF pays for the cost of the
subadviser's services, the compensation of officers of the Fund, occupancy and
certain clerical and bookkeeping costs of the Fund. The Fund bears all other
costs and expenses.

The management fee paid PMF is computed daily and payable monthly at an
annual rate of .55 of 1% of the average daily net assets of the Portfolio.

The Portfolio has a distribution agreement with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Portfolio. The Portfolio compensates PMFD for distributing and
servicing the Portfolio's Class A shares, pursuant to a plan of distribution,
regardless of expenses actually incurred by PMFD. The distribution fees are
accrued daily and payable monthly.

Pursuant to the Class A Plan, the Portfolio compensates PMFD for
distribution-related activities at an annual rate of up to .50 of 1% of the
average daily net assets of the Class A shares.

PMFD has advised the Portfolio that it has received approximately $1,300 in
front-end sales charges resulting from sales of Class A shares during the six
months ended April 30, 1995. From these fees, PMFD paid such sales charges to
Prudential Securities Incorporated (``PSI'') and Pruco Securities Corporation,
affiliated broker-dealers, which in turn paid commissions to salespersons and
incurred other distribution costs.

PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.

Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS''), a
With Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and
during the six months ended April 30, 1995, the Portfolio incurred fees of
approximately $24,300 for the services of PMFS. As of April 30, 1995,
approximately $3,800 of such fees were due to PMFS for its services. Transfer
Agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to non-affiliates.

Note 4. Portfolio The federal income tax basis
Securities of the Portfolio's investments
at April 30, 1995 was substantially the same as
the basis for financial reporting purposes and, accordingly, net unrealized
appreciation for federal income tax purposes was $199,481 (gross unrealized
appreciation--$388,846; gross unrealized depreciation--$189,365).

For federal income tax purposes, the Portfolio has a capital loss
carryforward as of October 31, 1994 of approximately $10,837,000 of which
$4,584,000 expires in 2000 and $6,253,000 expires in 2001. Accordingly, no
capital gains distributions are expected to be paid to shareholders until future
net gains have been realized in excess of such carryforward.

Transactions in options written during the six months ended April 30, 1995
were as follows:
<TABLE>
<CAPTION>
Number of
Contracts Premiums
(000) Received
---------- --------
<S> <C> <C>
Options outstanding at
October 31, 1994................. -- --
Options written.................... 1,149,145 $ 44,248
Options terminated in closing
purchase transactions............ (1,149,145) (44,248)
---------- --------
Options outstanding at
April 30, 1995................... -- --
---------- --------
---------- --------
</TABLE>

-10-

C-10

<PAGE>

<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- ----------------------- --------------- ----------- --------------
<S> <C> <C> <C>
Australian Dollars,
expiring
5/10-6/13/95......... $ 7,272,709 $ 7,212,464 $ 60,245
British Pounds,
expiring 5/12/95..... 1,594,530 1,611,474 (16,944)
Canadian Dollars,
expiring 5/18/95..... 1,710,865 1,732,715 (21,850)
Deutschemarks,
expiring
5/2-11/1/95.......... 31,062,462 31,472,097 (409,635)
Italian Lira,
expiring 5/18/95..... 631,496 642,197 (10,701)
Japanese Yen,
expiring 6/6/95...... 2,200,000 2,224,826 (24,826)
New Zealand Dollars,
expiring 5/3-6/2/95.. 2,034,859 2,089,449 (54,590)
Spanish Pesetas
expiring
9/11-11/2/95......... 4,838,960 5,147,429 (308,469)
Swedish Krona,
expiring 9/29/95..... 710,000 718,144 (8,144)
--------------- ----------- --------------
$ 52,055,881 $52,850,795 $ (794,914)
--------------- ----------- --------------
--------------- ----------- --------------
</TABLE>
Note 5. Joint The Portfolio, along with
Repurchase other affiliated registered
Agreement investment companies, trans-
Account fers uninvested cash balances
into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or Federal agency obligations. At April 30, 1995, the Fund had
a .11% undivided interest in the repurchase agreements in the joint account. The
undivided interest for the Fund represented $760,000 in principal amount. As of
such date, each repurchase agreement in the joint account and the value of the
collateral therefor were as follows:

Bear, Stearns & Co., 5.92%, in the principal amount of $125,000,000,
repurchase price $125,061,667, due 5/1/95. The value of the collateral including
accrued interest is $127,647,875.

UBS Securities Inc., 5.93%, in the principal amount of $100,000,000,
repurchase price $100,049,417, due 5/1/95. The value of the collateral including
accrued interest is $102,062,500.

Morgan Stanley and Co., Inc., 5.93%, in the principal amount of $225,000,000,
repurchase price $225,111,188, due 5/1/95. The value of the collateral including
accrued interest is $229,640,625.

CS First Boston Corp., 5.93%, in the principal amount of $225,000,000,
repurchase price $225,111,188, due 5/1/95. The value of the collateral including
accrued interest is $229,640,625.

Note 6. Capital The Portfolio currently offers
only Class A shares which are sold with a
front-end sales charge of up to .99%. The Portfolio discontinued offering Class
B shares on April 14, 1993. Class B shares automatically converted to Class A
shares upon being held longer than one year from the date of purchase. Effective
May 10, 1994, the remaining Class B shares converted to Class A shares. There
are 500 million authorized shares of $.001 par value common stock divided into
two classes, designated Class A and Class B common stock, each of which consists
of 250 million authorized shares.

Transactions in shares of common stock for the six months ended April 30,
1995 and the fiscal year ended October 31, 1994 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------- ----------- ------------
<S> <C> <C>
Six months ended April 30,
1995:
Shares sold.................... 637,013 $ 1,136,130
Shares issued in reinvestment
of dividends................. 394,653 703,121
Shares reacquired.............. (10,760,411) (19,218,376)
----------- ------------
Net decrease in shares
outstanding.................. (9,728,745) $(17,379,125)
----------- ------------
----------- ------------
Year ended October 31, 1994:
Shares sold.................... 1,787,071 $ 3,241,520
Shares sold--conversion from
Class B...................... 844,439 1,580,500
Shares issued in reinvestment
of dividends................. 1,447,695 2,676,200
Shares reacquired.............. (43,793,517) (80,885,842)
----------- ------------
Net decrease in shares
outstanding.................. (39,714,312) $(73,387,622)
----------- ------------
----------- ------------
<CAPTION>
Class B
- -------------------------------
Year ended October 31, 1994:
Shares issued in reinvestment
of dividends................. 4,960 $ 9,443
Shares reacquired.............. (236,484) (446,458)
Shares reacquired--conversion
into Class A................. (831,163) (1,580,500)
----------- ------------
Net decrease in shares
outstanding.................. (1,062,687) $ (2,017,515)
----------- ------------
----------- ------------
</TABLE>
-11-

C-11
<PAGE>

PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Class A Class B
------------------------------------------------------------- ---------------------------------------------------
February 15, November 1, February 15,
Six Months Year Ended 1991* 1993 Year Ended 1991*
Ended October 31, through through October 31, through
April 30, ------------------------------- October 31, May 9, ------------------- October 31,
1995 1994 1993 1992 1991 1994@ 1993 1992 1991
---------- ------- -------- -------- ------------ ----------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE
OPERATING
PERFORMANCE:
Net asset
value,
beginning
of period.. $ 1.80 $ 1.88 $ 1.89 $ 2.00 $ 2.00 $1.90 $ 1.89 $ 2.00 $ 2.00
---------- ------- -------- -------- ------------ ----- ------- -------- ------------
Income
from
investment
operations
Net
investment
income... .04 .08 .12 .16 .12D .04 .12 .15 .11D
Net
realized
and
unrealized
gain (loss)
on
investment
and foreign
currency
transactions.... (.01) (.07) (.04) (.13) -- (.03) (.04) (.13) --
---------- ------- -------- -------- ------------ ----- ------- -------- ------------
Total
from
investment
operations... .03 .01 .08 .03 .12 .01 .08 .02 .11
------- ----- -------- -------- ------------ ----- ------- -------- ------------
Less
distributions
Dividends
from net
investment
income... (04) -- (.04) (.14) (.12) -- (.04) (.13) (.11)
Tax return
of capital
distributions. -- (.09) (.05) -- -- (.05) (.05) -- --
------- ------- -------- -------- ------------ ----- ------- -------- ------------
Total
distributions. (.04) (.09) (.09) (.14) (.12) (.05) (.09) (.13) (.11)
-------- ------- -------- -------- ---------- ----- ------- -------- ------------
Contingent
deferred
sales
charges
collected... -- -- -- -- -- .03 .02 -- --
---------- ------- -------- -------- ------------ ----- ------- -------- ------------
Net asset
value,
end of
period... $ 1.79 $ 1.80 $ 1.88 $ 1.89 $ 2.00 $1.89 $ 1.90 $ 1.89 $ 2.00
---------- ------- -------- -------- ------------ ----- ------- -------- ------------
---------- ------- -------- -------- ------------ ----- ------- -------- ------------
TOTAL
RETURN#:... 1.81% 0.47% 4.36% 1.46% 5.91% 2.33% 5.47% 0.94% 5.53%
RATIOS/SUPPLEMENTAL
DATA:
Net assets,
end of
period
(000)... $ 32,726 $50,537 $127,490 $113,412 $ 86,443 $0 $ 2,023 $199,890 $ 134,015
Average
net
assets
(000)... $ 40,752 $82,267 $153,339 $138,331 $ 23,224 $ 525 $52,653 $248,941 $ 42,449
Ratios to
average
net assets:
Expenses,
including
distribution
fees...... 2.11%** 1.73% 1.48% 1.33% 1.25%D** 1.21%** 1.61% 1.83% 1.75%D**
Expenses,
excluding
distribution
fees..... 1.61%** 1.23% .98% .83% .75%D** 1.21%** .98% .83% .75%D**
Net
investment
income... 5.18%** 4.09% 6.44% 8.16% 8.64%D** 4.48%** 6.31% 7.66% 8.21%D**
<FN>
- ---------------
* Commencement of investment operations.
** Annualized.
# Total return does not consider the effects of sales loads. Total return
is calculated assuming a purchase of shares on the first day and a sale
on the last day of each period reported and includes reinvestment
of dividends. Total returns for periods of less than a full year are
not annualized.
D Net of expense subsidy.
@ Last day of investment operations of Class B shares. On May 10, 1994,
all existing Class B shares were converted to Class A shares.
</FN>
</TABLE>

See Notes to Financial Statements.
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C-13
<PAGE>

C-14
<PAGE>

C-15
<PAGE>

<PAGE>

Directors
Stephen C. Eyre
Delayne Dedrick Gold
Don G. Hoff
Harry A. Jacobs, Jr.
Sidney R. Knafel
Robert E. La Blanc
Lawrence C. McQuade
Thomas A. Owens, Jr.
Richard A. Redeker
Clay T. Whitehead