[LOGO] CMA(R)
CMA MASSACHUSETTS
MUNICIPAL MONEY FUND
- ------------------------------------
Semi-Annual Report
September 30, 1998
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[LOGO] Merrill Lynch
<PAGE>
To Our Shareholders:
For the six-month period ended September 30, 1998, CMA Massachusetts Municipal
Money Fund paid shareholders a net annualized yield of 2.97%.* As of September
30, 1998, the Fund's 7-day yield was 3.11%.
Economic Environment
Throughout the six-month period ended September 30, 1998, the commonwealth of
Massachusetts continued to exhibit solid economic growth. Led by a 9% growth
rate in construction employment, Massachusetts added jobs at a rate of 3%
year-over-year. With the exception of manufacturing, which may be feeling the
effects of a global slowdown, every sector of the Massachusetts economy
exhibited moderate-to-strong growth. Unemployment remained low during the
six-month period as the seasonally adjusted unemployment rate fell below 3% for
the first time in ten years. The Massachusetts economy is also set to receive a
boost next year when much of the $1.1 billion fiscal year 1998 state budget
surplus will be rebated to taxpayers.
Massachusetts real estate markets continued to grow at a blistering pace as both
residential and commercial property remained in high demand. New-home sales
increased to a 20% pace year-over-year, while the 1998 vacancy rates for owned
homes and rentals dropped by 27% and 10% year-over-year, respectively.
Currently, the largest constraint on the Massachusetts economy is the serious
labor shortage in the New England region. In addition, a growing global economic
slowdown, coupled with volatile financial markets, may also impact the
commonwealth's future economic growth.
Throughout the fiscal year, the revenue stream in Massachusetts remained
positive as a result of a favorable economic environment. The commonwealth
recorded preliminary total revenue collections of $14.0 billion for fiscal year
1998, well above budget estimates and 9% above the previous fiscal year. These
favorable results, which translated into a budget surplus, allowed Governor Paul
Cellucci to sign into law the largest tax reductions in Massachusetts history.
These tax reductions included the doubling of personal exemptions on earned
income as well as a tax reduction from 12% to 5.95% on dividends and interest
earned on investments. The commonwealth also began fiscal year 1999 on a
positive note as total revenue collections for the first three months amounted
to $3.5 billion, well above budget estimates and 11.6% higher than the
comparable three-month period a year ago.
While the financial performance of the commonwealth continued to remain
favorable, Massachusetts was able to avoid borrowing any additional amounts
other than the outstanding variable rate demand notes (VRDN) to finance daily
operations. Various Massachusetts municipalities also continued to benefit from
the commonwealth's solid performance, allowing them to maintain moderate
borrowing levels that amounted to $1.2 billion for the six-month period.
Investment Strategy
We began the six-month period ended September 30, 1998 by employing a neutral
approach to the market. The municipal yield curve remained fairly flat to
slightly inverted throughout the first three months of the period. We increased
the Fund's average portfolio maturity, which began the period in the 35-day
range, and maintained an average maturity in the 45-day range. We took advantage
of VRDN security yield levels, while selectively purchasing longer-dated
municipal
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after all
expenses.
1
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notes that were attractively priced for diversification purposes. As the second
half of the period unfolded, our focus on the technical considerations in
investing in the municipal market was replaced with a focus toward the
fundamental aspects of the market. This shift in focus was in part because of
the crises in the Asian region and Russia.
As the turmoil in Asia continued, new crises began to appear in both Russia and
Latin America, which unsettled the world's stock markets and created a rally in
US Treasury securities as investors searched for a safe haven. Although the
municipal note market was slow in reacting to such events, a combination of
historically high values relative to US Treasury securities and a reduction in
municipal note issuance created from strong domestic economic conditions caused
rates on one-year municipal notes to fall approximately 50 basis points (0.50%).
We shifted the Fund's investment strategy to a more aggressive approach by
increasing its average life to the 65-day range. The adjustment in the Fund's
average life was accomplished through increased purchases of longer-dated
municipal notes, while reducing its percentage of VRDN security holdings. As
investors reacted to the turbulent world financial markets, US Treasury yields
declined as much as 100 basis points in anticipation of the Federal Open Market
Committee meeting on September 29, 1998. In a much-anticipated move, the Federal
Reserve Board reduced the Federal Funds rate by 25 basis points to 5.25%, and
then lowered rates by another 25 basis points in October. Overall, the Fund was
well situated to take advantage of the various interest rate movements on the
yield curve throughout the period.
Looking ahead, we expect to maintain an aggressive investment approach by
positioning the Fund for the possibility of further reductions in interest rates
by the Federal Reserve Board. We also expect to balance the Fund's investing
practices by taking advantage of VRDN securities as year-end pressures on
remarketing agents typically force the municipal yield curve to invert. At
times, we may purchase additional amounts of longer-dated municipal notes when
issuance is available. However, as long as economic conditions remain strong, we
continue to expect a reduced amount of short-term note issuance by various
Massachusetts municipalities. We will continue to closely monitor credit quality
while seeking to offer an attractive tax-exempt yield to our shareholders.
In Conclusion
We thank you for your support of CMA Massachusetts Municipal Money Fund, and we
look forward to serving your investment needs in the future.
Sincerely,
/s/ Arthur Zeikel
Arthur Zeikel
President
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Kevin A. Schiatta
Kevin A. Schiatta
Vice President and Portfolio Manager
November 5, 1998
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CMA MASSACHUSETTS MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (IN THOUSANDS)
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Massachusetts-- $ 4,350 Amesbury, Massachusetts, BAN, 4.25% due 10/01/1998 .................................. $ 4,350
99.2% 2,795 Boston, Massachusetts, IDR (Boston Seafood Distribution Center Inc. Project),
VRDN, AMT, 3.50% due 1/01/2022 (a) .................................................. 2,795
2,525 Boston, Massachusetts, IDR, Industrial Financing Authority (Acme Bookbinding
Co., Inc.), VRDN, AMT, 3.85% due 9/01/2006 (a) ...................................... 2,525
4,400 Boston, Massachusetts, Tender Options BJP279 Custodial Receipts (Boston City
Hospital), VRDN, 4.15% due 2/15/2021 (a) ............................................ 4,400
5,000 Boston, Massachusetts, Water and Sewer Commission Revenue Bonds,VRDN,
Series SG-75, 4.12% due 11/01/2019 (a)(c) ........................................... 5,000
3,171 Cape Cod, Massachusetts, Regional Authority, TRAN, 4% due 7/02/1999 ................. 3,178
10,000 Clipper Tax-Exempt Trust, Massachusetts, VRDN, 4.12% due 12/01/2009 (a) ............. 10,000
Eagle Tax-Exempt Trust, Massachusetts, GO, VRDN, Series 93A (a):
1,900 4.07% due 2/01/2006 ............................................................. 1,900
9,600 3.55% due 2/01/2011 ............................................................. 9,600
5,667 Georgetown, Massachusetts, BAN, 3.80% due 10/30/1998 ................................ 5,668
2,500 Greater Attleboro--Taunton Regional Transportation Authority, Massachusetts,
RAN, UT, 3.95% due 8/13/1999 ........................................................ 2,504
3,905 Groton, Massachusetts, BAN, UT, 4% due 7/23/1999 .................................... 3,915
Holliston, Massachusetts, BAN:
2,200 4.25% due 10/15/1998 ............................................................ 2,200
3,675 4% due 6/10/1999 ................................................................ 3,684
4,350 Leominster, Massachusetts, BAN, 4.20% due 12/17/1998 ................................ 4,352
4,200 Littleton, Massachusetts, BAN, 4.15% due 10/16/1998 ................................. 4,200
1,600 Lowell, Massachusetts, BAN, 4% due 4/23/1999 ........................................ 1,602
4,000 Marlborough, Massachusetts, BAN, 3.90% due 7/15/1999 ................................ 4,008
5,000 Massachusetts State, GO, VRDN, Series SG-38, 4.12% due 8/01/2014 (a)(c) ............. 5,000
9,500 Massachusetts State, HFA, Housing Projects, VRDN, Series 13C,
4% due 10/01/2008 (a)(b) ............................................................ 9,500
8,000 Massachusetts State, HFA, Housing Revenue Bonds, VRDN, Series 50,
3.75% due 6/01/1999 (a) ............................................................. 8,000
Massachusetts State Health and Educational Facilities Authority Revenue Bonds:
2,500 (Becker College), VRDN, Series A-1, 3.90% due 7/01/2028 (a) ..................... 2,500
11,500 (Boston University), CP, Series H, 3.40% due 12/15/1998 ......................... 11,500
900 (Capital Asset Program), VRDN, Series E, 4.05% due 1/01/2035 (a) ................ 900
1,700 (Partners Healthcare Systems), VRDN, Series P-2, 3.80% due 7/01/2027 (a)(d) ..... 1,700
6,300 Massachusetts State Industrial Finance Agency, Health Care Facility Revenue
Bonds (Beverly Enterprises, Inc.), VRDN, 4.10% due 4/01/2009 (a) .................... 6,300
</TABLE>
Portfolio Abbreviations for CMA Massachusetts Municipal Money Fund
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
CP Commercial Paper
GO General Obligation Bonds
HFA Housing Finance Agency
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
SAAN Student Aid Anticipation Notes
TRAN Tax Revenue Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
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CMA MASSACHUSETTS MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (CONTINUED) (IN THOUSANDS)
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Massachusetts Massachusetts State Industrial Finance Agency, IDR, VRDN, AMT (a):
(continued) $ 2,900 (Garlock Printing Corp.), 3.70% due 12/01/2017 .................................. $ 2,900
3,150 (James F. and Judith Matthews), 4.20% due 9/01/2013 ............................. 3,150
2,800 (Lavigne Issue), 4.25% due 8/01/2008 ............................................ 2,800
3,150 (Matco Electric Group Inc. Issue), 4.20% due 7/01/2004 .......................... 3,150
6,500 (Star Container Corp.), 3.70% due 2/01/2018 ..................................... 6,500
2,500 (Tamasi Family Issue), 3.95% due 5/01/2013 ...................................... 2,500
698 (Techprint/Techgraphics), 3.85% due 6/01/2017 ................................... 698
4,000 (Valkyrie Co. Inc.), 4.25% due 5/01/2013 ........................................ 4,000
Massachusetts State Industrial Finance Agency, Industrial Revenue Bonds,
VRDN (a):
3,400 (225 Bodwell Corporation Project), AMT, 4.10% due 7/01/2017 ..................... 3,400
3,210 (AFC Cable Systems Inc. Issue), AMT, 4.25% due 7/01/2016 ........................ 3,210
1,900 (America Technology Corp. and RDL Holdings Ltd. Project),
4.10% due 8/01/2022 ............................................................. 1,900
2,000 (Arkansas Leisure Project), 4.10% due 4/01/2003 ................................. 2,000
2,000 (BBB Esquire LLC), AMT, Series B, 4.10% due 12/01/2016 .......................... 2,000
1,575 (Carand Realty Trust Issue), AMT, 3.95% due 5/01/2017 ........................... 1,575
1,500 (Eastern Nazarene College), AMT, 3.85% due 10/01/2027 ........................... 1,500
3,300 (Foilmark Manufacturing), AMT, Series A, 3.85% due 6/01/2010 .................... 3,300
3,780 (The Gem Group Inc. Issue), AMT, 4.25% due 7/01/2016 ............................ 3,780
2,040 (Haverdyne Co. LLC Issue), AMT, 3.95% due 9/01/2017 ............................. 2,040
1,900 (ICC Realty Association LP Project), AMT, 4.10% due 2/01/2016 ................... 1,900
4,400 (Lightolier Inc. Project), 3.90% due 7/29/2010 .................................. 4,400
3,300 (Mercer Paper Tube Corp.), AMT, 4.20% due 11/01/2011 ............................ 3,300
1,600 (October Co. Inc. Project), AMT, 4.10% due 12/01/2017 ........................... 1,600
1,295 Refunding (Easy Day Realty Trust Project), Series A, 3.85% due 7/01/2006 ........ 1,295
3,115 Refunding (New England Biolabs), AMT, 4.10% due 3/01/2016 ....................... 3,115
2,000 (Sterling Reality Trust LLC Project), 4.10% due 12/01/2017 ...................... 2,000
3,175 (Telcom USA Inc. Issue), AMT, 4.25% due 8/01/2016 ............................... 3,175
3,180 (WBC Extrusion Products Issue), AMT, 3.85% due 4/01/2006 ........................ 3,180
2,925 (William F. Rogers Issue), AMT, 4.25% due 11/01/2006 ............................ 2,925
4,565 (ZBR Limited Partnership), AMT, 4.25% due 4/15/2015 ............................. 4,565
1,425 (ZBR Limited Partnership), AMT, 3.85% due 4/15/2017 ............................. 1,425
Massachusetts State Industrial Finance Agency, PCR:
4,000 (Holyoke Water Power Company Project), VRDN, AMT, 3.75%
due 12/01/2020 (a) .............................................................. 4,000
5,600 Refunding (New England Power Co. Project), CP, Series A, 3.45%
due 11/16/1998 .................................................................. 5,600
Massachusetts State Industrial Finance Agency Revenue Bonds, VRDN (a):
1,500 (Gordon College Issue), 3.85% due 12/01/2027 .................................... 1,500
3,000 (Governor Dummer Academy), 3.85% due 7/01/2026 .................................. 3,000
1,825 (Heritage at Dartmouth Project), AMT, 3.95% due 12/01/2028 ...................... 1,825
3,000 (Mount IDA College Issue), 3.85% due 12/01/2027 ................................. 3,000
3,930 Refunding (Showa Women's Institute Inc.), 4.10% due 3/15/2004 ................... 3,930
Massachusetts State Industrial Finance Agency, Solid Waste Disposal Revenue
Bonds (E.L. Harvey and Sons Inc.), VRDN, AMT (a):
2,730 3.70% due 1/01/2011 ............................................................. 2,730
3,000 4.25% due 6/01/2013 ............................................................. 3,000
9,595 Massachusetts State Turnpike Authority, Western Turnpike Revenue Bonds,
VRDN, 4.15% due 1/01/2017 (a) ....................................................... 9,595
</TABLE>
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CMA MASSACHUSETTS MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (CONCLUDED) (IN THOUSANDS)
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Massachusetts $ 1,000 Montachusett, Massachusetts, Regional Authority, RAN, 4% due 6/25/1999 .............. $ 1,003
(concluded) 9,552 North Attleborough, Massachusetts, BAN, 4% due 5/01/1999 ............................ 9,582
3,038 Norwell, Massachusetts, BAN, 4.15% due 12/03/1998 ................................... 3,041
3,198 Stoughton, Massachusetts, BAN, 4.10% due 6/11/1999 .................................. 3,205
2,190 Taunton, Massachusetts, Industrial Financing Authority, IDR (CD Realty
Trust IX Project), VRDN, AMT, 3.50% due 2/01/2010 (a) ............................... 2,190
1,998 Wareham, Massachusetts, Fire District, BAN, UT, 4% due 7/15/1999 .................... 2,005
2,950 Watertown, Massachusetts, BAN, 3.68% due 10/28/1998 ................................. 2,950
Westfield, Massachusetts:
4,000 BAN, 4.10% due 10/22/1998 ....................................................... 4,001
1,900 SAAN, 4.10% due 12/10/1998 ...................................................... 1,901
7,375 Worcester, Massachusetts, BAN, 4% due 8/26/1999 ..................................... 7,389
5,000 Worcester, Massachusetts, Regional Authority, TRAN, 3.90% due 6/18/1999 ............. 5,005
- ------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost--$285,016*)--99.2% .......................................... 285,016
Other Assets Less Liabilities--0.8% ................................................. 2,261
--------
Net Assets--100.0% .................................................................. $287,277
========
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The interest rate is subject to change periodically based on certain
indexes. The interest rate shown is the rate in effect at September 30,
1998.
(b) AMBAC Insured.
(c) MBIA Insured.
(d) FSA Insured.
* Cost for Federal income tax purposes.
See Notes to Financial Statements.
5
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CMA MASSACHUSETTS MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF SEPTEMBER 30, 1998
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (identified cost--$285,015,845) (Note 1a) ........................ $ 285,015,845
Cash ................................................................................... 191,973
Interest ............................................................................. $ 1,995,537
Securities sold ...................................................................... 1,132 1,996,669
-------------
Prepaid registration fees and other assets (Note 1d) ................................... 327,016
-------------
Total assets ........................................................................... 287,531,503
-------------
Liabilities:
Payables:
Investment adviser (Note 2) .......................................................... 119,734
Distributor (Note 2) ................................................................. 67,630 187,364
-------------
Accrued expenses and other liabilities ................................................. 67,372
-------------
Total liabilities ...................................................................... 254,736
-------------
Net Assets ............................................................................. $ 287,276,767
=============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares authorized .. $ (28,727,760
Paid-in capital in excess of par ....................................................... 258,549,745
Accumulated realized capital losses--net (Note 4) ...................................... (738)
-------------
Net Assets--Equivalent to $1.00 per share based on 287,277,604 shares of beneficial
interest outstanding ................................................................... $ 287,276,767
=============
</TABLE>
See Notes to Financial Statements.
6
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CMA MASSACHUSETTS MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
Investment Income (Note 1c):
Interest and amortization of premium earned ........ $ 5,121,513
Expenses:
Investment advisory fees (Note 2) .................. $ 697,552
Distribution fees (Note 2) ......................... 173,292
Professional fees .................................. 27,818
Registration fees (Note 1d) ........................ 27,545
Transfer agent fees (Note 2) ....................... 26,325
Accounting services (Note 2) ....................... 20,306
Custodian fees ..................................... 11,608
Printing and shareholder reports ................... 8,032
Pricing fees ....................................... 3,160
Trustees' fees and expenses ........................ 905
Other .............................................. 1,607
----------
Total expenses ..................................... 998,150
-----------
Investment income--net ............................. 4,123,363
-----------
Net Increase in Net Assets Resulting from Operations $ 4,123,363
===========
See Notes to Financial Statements.
7
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CMA MASSACHUSETTS MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Six Months Year
Ended Ended
September 30, March 31,
Increase (Decrease) in Net Assets: 1998 1998
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Investment income--net ...................................................... $ 4,123,363 $ 6,841,462
Realized gain on investments--net ........................................... -- 14,640
--------------- ---------------
Net increase in net assets resulting from operations ........................ 4,123,363 6,856,102
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income--net ...................................................... (4,123,363) (6,841,462)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders ......... (4,123,363) (6,841,462)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares ............................................ 596,843,008 1,012,239,315
Net asset value of shares issued to shareholders in reinvestment of dividends
(Note 1e) ................................................................... 4,123,554 6,840,716
--------------- ---------------
600,966,562 1,019,080,031
Cost of shares redeemed ..................................................... (582,618,951) (950,763,913)
--------------- ---------------
Net increase in net assets derived from beneficial interest transactions .... 18,347,611 68,316,118
--------------- ---------------
Net Assets:
Total increase in net assets ................................................ 18,347,611 68,330,758
Beginning of period ......................................................... 268,929,156 200,598,398
--------------- ---------------
End of period ............................................................... $ 287,276,767 $ 268,929,156
=============== ===============
</TABLE>
See Notes to Financial Statements.
8
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CMA MASSACHUSETTS MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended For the Year Ended March 31,
September 30, -----------------------------------------------
Increase (Decrease) in Net Asset Value: 1998 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Investment income--net ................................... .01 .03 .03 .03 .02
-------- -------- -------- -------- --------
Total from investment operations ......................... .01 .03 .03 .03 .02
-------- -------- -------- -------- --------
Less dividends from investment income--net................ (.01) (.03) (.03) (.03) (.02)
-------- -------- -------- -------- --------
Net asset value, end of period ........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Investment Return .................................. 2.97%* 3.03% 2.84% 3.04% 2.46%
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses ................................................. .72%* .72% .76% .76% .76%
======== ======== ======== ======== ========
Investment income--net ................................... 2.96%* 2.98% 2.78% 3.00% 2.43%
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of period (in thousands) ................. $287,277 $268,929 $200,598 $189,482 $161,076
======== ======== ======== ======== ========
</TABLE>
* Annualized.
See Notes to Financial Statements.
9
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CMA MASSACHUSETTS MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Massachusetts Municipal Money Fund (the "Fund") is part of CMA Multi-State
Municipal Series Trust (the "Trust"). The Fund is registered under the
Investment Company Act of 1940 as a non-diversified, open-end management
investment company. These unaudited financial statements reflect all adjustments
which are, in the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are of a normal
recurring nature. The following is a summary of significant accounting policies
followed by the Fund.
(a) Valuation of investments--Investments are valued at amortized cost, which
approximates market value. For the purpose of valuation, the maturity of a
variable rate demand instrument is deemed to be the next coupon date on which
the interest rate is to be adjusted. In the case of a floating rate instrument,
the remaining maturity is the demand notice payment period.
(b) Income taxes--It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
(c) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Interest income (including amortization of premium and discount) is recognized
on the accrual basis. Realized gains and losses on security transactions are
determined on the identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged to expense
as the related shares are issued.
(e) Dividends and distributions to shareholders--The Fund declares dividends
daily and reinvests daily such dividends (net of non-resident alien tax and
back-up withholding tax withheld) in additional fund shares at net asset value.
Dividends are declared from the total of net investment income, excluding
discounts earned other than original issue discounts. Net realized capital
gains, if any, are normally distributed annually after deducting prior years'
loss carryforward. The Fund may distribute capital gains more frequently than
annually in order to maintain the Fund's net asset value at $1.00 per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML &
Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee
based upon the average daily value of the Fund's net assets at the following
annual rates: 0.50% of the first $500 million of average daily net assets;
0.425% of average daily net assets in excess of $500 million but not exceeding
$1 billion; and 0.375% of average daily net assets in excess of $1 billion.
Pursuant to the Distribution and Shareholder Servicing Plan in compliance with
Rule 12b-1 under the Investment Company Act of 1940, Merrill Lynch, Pierce,
Fenner & Smith Inc. ("MLPF&S") receives a distribution fee from the Fund at the
end of each month at the
10
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annual rate of 0.125% of average daily net assets of the Fund. The distribution
fee is to compensate MLPF&S financial consultants and other directly involved
branch office personnel for selling shares of the Fund and for providing direct
personal services to shareholders. The distribution fee is not compensation for
the administrative and operational services rendered to the Fund by MLPF&S in
processing share orders and administering shareholder accounts.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or directors of
FAM, PSI, FDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the period corresponds to the
amounts included in the Statements of Changes in Net Assets for net proceeds
from sale of shares and cost of shares redeemed, respectively, since shares are
recorded at $1.00 per share.
4. Capital Loss Carryforward:
At March 31, 1998, the Fund had a net capital loss carryforward of approximately
$1,000, all of which expires in 2004. This amount will be available to offset
like amounts of any future taxable gains.
CMA MASSACHUSETTS MUNICIPAL MONEY FUND
OFFICERS AND TRUSTEES
Arthur Zeikel--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Richard R. West--Trustee
Terry K. Glenn--Executive Vice President
Vincent R. Giordano--Senior Vice President
Edward J. Andrews--Vice President
Donald C. Burke--Vice President
Peter J. Hayes--Vice President
Kenneth A. Jacob--Vice President
Steven T. Lewis--Vice President
Darrin J. SanFillippo--Vice President
Kevin A. Schiatta--Vice President
Helen Marie Sheehan--Vice President
Gerald M. Richard--Treasurer
Robert Harris--Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210*
* For inquiries regarding your CMA account,
call (800) CMA-INFO [(800) 262-4636].
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This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of the Fund unless accompanied or preceded by the Fund's
current prospectus. Past performance results shown in this report should not be
considered a representation of future performance, which will fluctuate. An
investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other Government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund. Statements and other information herein are as
dated and are subject to change.
CMA Massachusetts
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011 #11283--9/98
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