CMA
CMA NORTH CAROLINA
MUNICIPAL MONEY FUND
Semi-Annual Report
September 30, 1998
MERRILL LYNCH BULL LOGO
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 North Carolina
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the six-month period ended September 30, 1998, CMA North
Carolina Municipal Money Fund paid shareholders a net annualized
yield of 2.94%.* As of September 30, 1998, the Fund's 7-day yield
was 3.11%.
Economic Environment
During most of the six-month period ended September 30, 1998,
economic conditions in North Carolina remained favorable. Employment
in the state continued to remain strong, as reflected in the 3.6%
unemployment rate for the month of August. Also, according to the
North Carolina Department of Commerce, residential housing units
increased by 5.1% in July 1998 to 7,016 from 6,676 in July 1997. The
state's population surged 11.5% since 1990 to over 7.4 million
residents. This impressive growth has led to an increase in demand
for municipal services, especially in the area of education. Most
recently, North Carolina issued $450 million in general obligation
bonds to finance both the expansion and improvement of public school
buildings. Including this sale, the state's outstanding debt will
total $2.1 billion, up from just $580 million in 1993. During July
1998, North Carolina legislators overwhelmingly approved a $955
million general obligation bond bill. Under the bill, a referendum
will be held in November to ask voters across the state to authorize
debt to upgrade drinking water and sewerage systems along with
building pipelines that distribute natural gas to state residents
and businesses. This request represents the third time since 1996
that North Carolina has sought approval for nearly $1 billion of
general obligation debt.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
During the month of June, the state settled a lawsuit in
which the North Carolina Supreme Court ruled that the state had
unconstitutionally taxed workers' pensions since 1989. Early
estimates indicated the state will have to refund more than $1.1
billion of taxes and stop collecting the $130 million of annual
revenues that the levy provided. However, the State Superior Court
approved a settlement that would cost North Carolina only $799
million in return for the state's promise to expedite payments to
plaintiffs. The state has decided to use $1.4 billion in cash on
hand for the fiscal year beginning July 1, 1999 to pay the first
$400 million of the settlement. The remaining $399 million would
come from the fiscal year 2000 budget.
Investment Strategy
During the first half of the period, we maintained a relatively
neutral average portfolio maturity for the Fund. Despite
fundamentals for the US economy remaining positive, we believed the
ongoing crisis in Asia would keep monetary policy on hold for the
near term. Because of continued flatness in the short-term tax-
exempt yield curve, we accomplished this neutral stance by
predominantly purchasing tax-exempt commercial paper maturing within
two months--four months while awaiting the expected issuance of cash-
flow notes that traditionally enter the market during the summer
months. The issuance of these fixed-rate notes ordinarily drives up
the yield on securities of this kind, providing the Fund with a more
attractive opportunity to extend maturity. However, given both the
low inflation expectations in our market and the decrease in
issuance caused by thriving state economies, yield spreads between
fixed-rate and variable-rate products remained relatively narrow.
Nevertheless, we took part in the purchase of these fixed-rate notes
because of our need to replace the Fund's maturing cash flow notes
from the previous year, combined with our belief that these issues
could be some of the more attractive yields we will see on fixed-
rate products over the next six months. For the six-month period
ended September 30, 1998, the state of North Carolina's issuance
totaled $95 million, a decrease from the $104.2 million issued
during the previous six-month period.
As the September period came to an end, it became evident that the
problems that originated in Pacific Rim countries will significantly
affect the world's financial markets and economies. As a result, US
Treasury yields dropped, while the rate on the 30-year US Treasury
bond closed just below 5% on September 30, 1998. Consequently, we
continued to increase the Fund's percentage of fixed-rate securities
in order to lock in more attractive yields than were expected over
the next six months. The Fund, which began the period with a
weighted average maturity in the 30-day range, concluded the period
in the 50-day range. On September 29, 1998, the Federal Reserve
Board eased monetary policy by lowering the Federal Funds rate 25
basis points (0.25%), and did so again in October with another 25
basis point cut, which investors viewed positively. Finally,
diversification and credit quality remain paramount to the Fund, and
we will continue to monitor the ever-changing marketplace.
In Conclusion
We thank you for your support of CMA North Carolina Municipal Money
Fund, and we look forward to serving your investment needs in the
future.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Darrin J. SanFillippo)
Darrin J. SanFillippo
Vice President and Portfolio Manager
November 10, 1998
Portfolio Abbreviations for
CMA North Carolina Municipal Money Fund
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
CP Commercial Paper
GO General Obligation Bonds
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
MSTR Municipal Security Trust Receipts
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina-- $ 1,000 Beaufort County, North Carolina, Industrial Facilities and Pollution
98.0% Control Financing Authority Revenue Bonds (Texasgulf, Inc. Project),
VRDN, 4.10% due 12/01/2000 (a) $ 1,000
3,700 Brunswick County, North Carolina, Industrial Facilities and Pollution
Control Financing Authority Revenue Bonds (Woods Industries Inc.
Project), VRDN, AMT, 4.15% due 7/01/2017 (a) 3,700
Buncombe County, North Carolina, VRDN (a):
410 4% due 6/01/2000 410
455 4% due 6/01/2002 455
500 4% due 6/01/2004 500
525 4% due 6/01/2005 525
580 4% due 6/01/2007 580
435 4% due 6/01/2008 435
640 4% due 6/01/2009 640
740 4% due 6/01/2012 740
6,600 Cabarrus County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (S&D Coffee Inc. Project), VRDN,
AMT, 4.05% due 9/01/2011 (a) 6,600
3,000 Carteret County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, PCR (Texasgulf, Inc. Project), VRDN, 4.125% due
10/01/2005 (a) 3,000
2,360 Chadbourn, North Carolina, BAN, UT, 3.685% due 2/24/1999 2,360
12,520 Charlotte, North Carolina, Airport Revenue Refunding Bonds, VRDN, Series A,
AMT, 4.10% due 7/01/2017 (a)(b) 12,520
3,420 Clayton, North Carolina, Water District, BAN, UT, 3.61% due 3/24/1999 3,421
3,725 Cleveland, North Carolina, Water District, BAN, 3.619% due 3/24/1999 3,725
13,300 Clipper, North Carolina, Tax Exempt Trust, VRDN, 4.07% due 4/12/2004 (a) 13,300
2,180 Craven County, North Carolina, BAN, AMT, 3.83% due 10/07/1998 2,180
5,200 Craven County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority (Cravenwood Energy Project), VRDN, AMT, Series C, 4.20%
due 5/01/2011 (a) 5,200
Cumberland County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Revenue Refunding Bonds (Monsanto Co. Project),
VRDN (a):
1,715 3.85% due 6/01/2012 1,715
600 3.85% due 10/01/2014 600
5,200 Davidson County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Diebold Inc. Project), VRDN, 4% due 6/01/2017 (a) 5,200
3,000 Edgecombe Water and Sewer District No. 1, North Carolina, BAN, 3.64% due
4/28/1999 3,001
Gaston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN (a):
1,865 (Gold Medal Homes), 4.10% due 12/01/2009 1,865
3,600 (Mount Holly Enterprises), AMT, 4.10% due 5/01/2004 3,600
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina Granville County, North Carolina, Industrial Facilities and Pollution
(continued) Control Financing Authority Revenue Bonds, VRDN, AMT (a):
$ 4,000 (Mayville Metal Production Project), 3.75% due 5/23/2020 $ 4,000
2,025 (Tuscarora Plastics, Inc. Project), 4.10% due 12/01/2001 2,025
500 Greene County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDA, Revenue Bonds (Federal Paper Board Company, Inc.
Project), VRDN, AMT, 4.05% due 11/01/2009 (a) 500
Guilford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN, AMT (a):
900 (Pharmagraphics Inc. Project), 4.05% due 9/01/2010 900
7,500 (US Woven Label Project), 4.05% due 1/01/2013 7,500
20,715 Halifax County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Exempt Facilities--Westmoreland
Project), VRDN, AMT, 4.30% due 12/01/2019 (a) 20,715
Holly Springs, North Carolina, BAN:
6,617 3.645% due 3/17/1999 6,617
2,000 UT, Series A, 3.60% due 10/14/1998 2,000
385 Johnston County, North Carolina, GO, UT, Series 1996, 5% due 2/01/1999 (d) 387
3,700 Lenoir County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (West Co. Nebraska, Inc. Project), VRDN,
4% due 10/01/2005 (a) 3,700
8,200 Lincoln County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Hof Textiles Inc. Project), VRDN, AMT,
3.90% due 10/01/2011 (a) 8,200
8,500 Mecklenberg County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Rexroth Corporation Project), VRDN, AMT, 4.05% due
9/01/2016 (a) 8,500
Mecklenberg County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN (a):
2,000 (Edgecomb Metals Company Project), 4% due 12/01/2009 2,000
900 (Flawa Corporation Project), AMT, 3.85% due 12/01/2008 900
1,500 (Griffith Micro Science Project), AMT, 4.10% due 11/01/2007 1,500
805 New Hanover County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Interroll Corp. Project), VRDN, 4.10% due
11/01/2003 (a) 805
North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds:
9,500 CP, 3.55% due 12/09/1998 9,500
10,000 CP, 3.60% due 1/14/1999 10,000
1,250 Refunding, Series A, 7.25% due 1/01/1999 (c) 1,286
2,000 North Carolina Educational Facilities Finance Agency Revenue Bonds (Duke
University Project), VRDN, Series A, 3.95% due 6/01/2027 (a) 2,000
2,000 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds
(Cabarrus Memorial Hospital Project), VRDN, 3.95% due 3/01/2012 (a) 2,000
3,200 North Carolina Medical Care Commission, Hospital Revenue Bonds (Pooled
Equipment Financing Project), ACES, VRDN, 3.80% due 12/01/2025 (a)(b) 3,200
North Carolina Medical Care Commission, Hospital Revenue Bonds, VRDN (a):
3,500 (Duke University Hospital), Series C, 3.95% due 6/01/2015 3,500
2,130 (Duke University Hospital), Series D, 3.95% due 6/01/2015 2,130
3,300 (Pooled Equipment Financing Project), ACES, 3.70% due 4/01/2012 (b) 3,300
200 (Pooled Financing Project), ACES, Series A, 4.05% due 10/01/2020 200
55 (Pooled Financing Project), ACES, Series B, 4.15% due 10/01/2013 55
200 Refunding (Moses H. Cone Memorial Hospital Project), 3.90% due
10/01/2023 200
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina North Carolina Municipal Power Agency, Electric Revenue Bonds
(concluded) (No. 1 Catawba):
$ 6,000 CP, 3.40% due 12/09/1998 $ 6,000
20,650 CP, 3.55% due 12/15/1998 20,650
4,915 CP, 3.50% due 12/17/1998 4,915
15,000 CP, 3.55% due 12/18/1998 15,000
4,000 CP, 3.40% due 1/04/1999 4,000
2,885 Refunding, 5.10% due 1/01/1999 (e) 2,896
1,800 North Carolina State Port Authority, Docks and Wharves Facility Revenue
Bonds (Morehead City Terminals), VRDN, AMT, 4.10% due 1/01/2016 (a) 1,800
1,305 Piedmont Triad Airport Authority, North Carolina, Special Facility Revenue
Bonds (Purpose--Cessna Aircraft Company Project), VRDN, AMT, 4.10% due
10/01/2012 (a) 1,305
100 Raleigh-Durham, North Carolina, Airport Authority, Special Facilities
Revenue Refunding Bonds (American Airlines), VRDN, Series B, 4.15% due
11/01/2005 (a) 100
6,000 Richland Township, North Carolina, Water and Sewer District, BAN, UT, 3.75%
due 11/18/1998 6,001
Rowan County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds:
2,300 IDR (Hon Industries Project), VRDN, AMT, 4.05% due 4/01/2018 (a) 2,300
700 (Reynolds Metals Company Project), 3.65% due 12/01/1998 700
2,900 Rutherford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (All American Homes of North Carolina
Inc.), VRDN, AMT, 4.05% due 11/01/2011 (a) 2,900
3,330 Sampson County, North Carolina, Water and Sewer District, BAN, UT, 3.535%
due 6/02/1999 3,331
1,200 Southeast Brunswick, North Carolina, San District, BAN, 3.76% due 2/24/1999 1,200
5,000 Stanley County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Patrick Industry Project), VRDN, 4% due
8/01/2010 (a) 5,000
3,000 Wake County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Industrial Accu-Fab Inc. Project), VRDN,
AMT, 4.15% due 1/01/2019 (a) 3,000
400 Wilson County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (North Carolina Chip Co. Project), VRDN, 4.10% due
1/01/2000 (a) 400
1,200 Winston-Salem, North Carolina, Refunding, GO, UT, 6.50% due 6/01/1999 1,225
Puerto Rico-- 2,000 Puerto Rico Commonwealth, Government Development Bank, CP, 3.50% due
1.5% 10/22/1998 2,000
2,000 Puerto Rico Electric Power Authority Power Revenue Bonds, MSTR, VRDN,
Series SGA-43, 3.87% due 7/01/2022 (a) 2,000
Total Investments (Cost--$271,615*)--99.5% 271,615
Other Assets Less Liabilities--0.5% 1,456
----------
Net Assets--100.0% $ 273,071
==========
<FN>
(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)MBIA Insured.
(c)Prefunded.
(d)AMBAC Insured.
(e)FGIC Insured.
*Cost For Federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF SEPTEMBER 30, 1998
<S> <C> <C>
Assets:
Investments, at value (identified cost--$271,615,200) (Note 1a) $ 271,615,200
Cash 110,621
Interest receivable 1,462,950
Prepaid registration fees and other assets (Note 1d) 129,011
---------------
Total assets 273,317,782
---------------
Liabilities:
Payables:
Investment adviser (Note 2) $ 115,550
Distributor (Note 2) 68,078 183,628
---------------
Accrued expenses and other liabilities 62,915
---------------
Total liabilities 246,543
---------------
Net Assets $ 273,071,239
===============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares
authorized $ 27,313,715
Paid-in capital in excess of par 245,823,430
Accumulated realized capital losses--net (Note 4) (65,906)
---------------
Net Assets--Equivalent to $1.00 per share based on 273,137,145 shares of
beneficial interest outstanding $ 273,071,239
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium earned $ 5,192,983
Expenses:
Investment advisory fees (Note 2) $ 717,181
Distribution fees (Note 2) 178,278
Professional fees 27,307
Transfer agent fees (Note 2) 26,955
Accounting services (Note 2) 22,104
Registration fees (Note 1d) 16,590
Custodian fees 13,801
Printing and shareholder reports 8,019
Pricing fees 3,571
Trustees' fees and expenses 1,030
Other 2,401
---------------
Total expenses 1,017,237
---------------
Investment income--net 4,175,746
Realized Loss on Investments--Net (Note 1c) (26,651)
---------------
Net Increase in Net Assets Resulting from Operations $ 4,149,095
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
September 30, March 31,
Increase (Decrease) in Net Assets: 1998 1998
<S> <C> <C>
Operations:
Investment income--net $ 4,175,746 $ 8,203,913
Realized gain (loss) on investments--net (26,651) 556
--------------- ---------------
Net increase in net assets resulting from operations 4,149,095 8,204,469
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income--net (4,175,746) (8,203,913)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (4,175,746) (8,203,913)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 368,199,381 908,145,767
Net asset value of shares issued to shareholders in reinvestment of
dividends (Note 1e) 4,175,633 8,204,020
--------------- ---------------
372,375,014 916,349,787
Cost of shares redeemed (406,346,578) (883,460,955)
--------------- ---------------
Net increase (decrease) in net assets derived from beneficial interest
transactions (33,971,564) 32,888,832
--------------- ---------------
Net Assets:
Total increase (decrease) in net assets (33,998,215) 32,889,388
Beginning of period 307,069,454 274,180,066
--------------- ---------------
End of period $ 273,071,239 $ 307,069,454
=============== ===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios
have been derived from information provided For the Six
in the financial statements. Months Ended
September 30, For the Year Ended March 31,
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 .03
---------- ---------- ---------- ---------- ----------
Total from investment operations .01 .03 .03 .03 .03
---------- ---------- ---------- ---------- ----------
Less dividends from investment income--net (.01) (.03) (.03) (.03) (.03)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return 2.94%* 3.02% 2.84% 3.12% 2.61%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses, net of reimbursement .71%* .71% .72% .69% .62%
========== ========== ========== ========== ==========
Expenses .71%* .71% .72% .74% .72%
========== ========== ========== ========== ==========
Investment income--net 2.91%* 2.97% 2.79% 3.08% 2.58%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of period (in thousands) $ 273,071 $ 307,069 $ 274,180 $ 273,910 $ 278,704
========== ========== ========== ========== ==========
<FN>
*Annualized.
See Notes to Financial Statements.
</TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA North Carolina 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.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
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
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 $39,000, of which $5,000 expires in 2001, $10,000
expires in 2002, $13,000 expires in 2003 and $11,000 expires in
2005. This amount will be available to offset like amounts of any
future taxable gains.
CMA NORTH CAROLINA 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*
[FN]
*For inquiries regarding your CMA account,
call (800) CMA-INFO [(800) 262-4636].
