Exhibit 4(a)

                          INVESTMENT ADVISORY AGREEMENT

      AGREEMENT made this 29th day of July, 1989, by and between MERRILL LYNCH
CAPITAL FUND, INC., a Maryland corporation (the "Fund"), and MERRILL LYNCH ASSET
MANAGEMENT, INC., a Delaware corporation (the "Advisor");

                              W I T N E S S E T H :

      WHEREAS the Fund is engaged in business as a diversified open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended;

      WHEREAS the Advisor is engaged principally in rendering advisory services
and is registered as such under the Investment Advisers Act of 1940; and

      WHEREAS the Fund desires to retain the Advisor to render investment
supervisory and corporate administrative services to the Fund in the manner and
on the terms hereinafter set forth,

      NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Advisor hereby agree as follows:

      1. The Fund hereby employs the Advisor to act as the investment advisor to
and manager of the Fund and to manage the investment and reinvestment of the
assets of the Fund and to administer its affairs, subject to the supervision of
the Board of Directors of the Fund, for the period and on the terms and
conditions set forth in this Agreement. The Advisor hereby accepts such
employment and agrees during such period, at its own expense, to render the
services and to assume the obligations herein set forth for the compensation
provided for herein.




The Advisor shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.

      2. The Advisor shall regularly provide the Fund with investment research,
advice and supervision and shall continuously furnish the Fund with an
investment program for the assets of the Fund consistent with the principles set
forth in the Certificate of Incorporation, By-laws, Registration Statement and
Prospectus of the Fund and the requirements of the Investment Company Act of
1940, as amended.

      3. (a) The Advisor, at its own expense, shall furnish to the Fund office
space and all necessary office facilities, equipment and personnel for managing
the affairs and investments and keeping the books of the Fund. The Advisor
assumes and shall pay or reimburse the Fund for the compensation of all officers
and employees of the Fund and of all directors of the Fund who are interested
persons (as defined in the Investment Company Act of 1940, as amended) of the
Advisor. Except as otherwise expressly provided above, the Fund assumes and
shall pay all expenses of the Fund, including, without limitation: (1) the
charges and expenses of any custodian or depositary appointed by the Fund for
the safekeeping of its cash, securities and other property, (2) the charges and
expenses of auditors, (3) the charges and expenses of any transfer agents and
registrars appointed by the Fund, (4) the compensation of all directors who are
not interested persons of the Advisor, (5) brokers' commissions and issue and
transfer taxes chargeable to the Fund in connection with securities transactions
to which the Fund is a party, (6) interest charges, (7) all taxes and corporate
fees payable by the Fund to Federal, state or other governmental agencies, (8)
the cost of stock certificates representing shares of the Fund, (9) expenses in
connection with the repurchase and redemption of shares of the Fund, (10)


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all expenses of shareholders' and directors' meetings and of preparing and
printing reports to shareholders and (11) charges and expenses of legal counsel
for the Fund.

      (b) The services of the Advisor to the Fund hereunder are not to be deemed
exclusive, and the Advisor shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.

      4. (a) As full compensation for the services and facilities provided by
the Advisor hereunder, the Fund shall pay to the advisor at the end of each
calendar month a fee based upon the average daily value of the net assets of the
Fund, computed as of the time of close of trading on the New York Stock Exchange
on each day on which such Exchange is open for trading during such month, as
determined and computed in accordance with the answer to Item 30(a) to the form
N-8B-1 of the Fund on file with the Securities and Exchange Commission at the
following annual rates: 0.50% of that portion of the average daily net assets
not exceeding $250,000,000; 0.45% of that portion of the average daily net
assets exceeding $250,000,000 but not exceeding $300,000,000; 0.425% of that
portion of the average daily net assets exceeding $300,000,000 but not exceeding
$400,000,000; and 0.40% of that portion of the average daily net assets
exceeding $400,000,000. During any period when the determination of asset value
is suspended by the Board of Directors of the Fund, the asset value of a share
as of the last business day prior to such suspension shall for this purpose be
deemed to be the asset value at the close of each succeeding business day until
it is again determined.

      (b) In the event the total ordinary operating expenses of the Fund in any
fiscal year, inclusive of the fee paid to the Advisor pursuant to the preceding
paragraph but excluding taxes and governmental fees, interest paid and brokerage
commissions paid and expenses of


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extraordinary items such as litigation, shall exceed an amount equal to 1-1/2%
of the first $30,000,000 of net assets of the Fund and 1% of the average
month-end total net assets of the Fund, based upon computations of net asset
value of the Fund made monthly, the Advisor shall pay on behalf of the Fund, or
reimburse the Fund for, any amount by which such total expenses exceed such
amount. Whenever the expenses of the Fund exceed a pro rata portion of the
annual expense limitation herein provided for, the estimated amount of
reimbursement under such expense limitation shall be applied as an offset
against the monthly payment of the investment advisory fee due to the Advisor.

      5. The Advisor shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with any investment
policy or the purchase, sale or redemption of any securities on the
recommendation of the Advisor. Nothing herein contained shall be construed to
protect the Advisor against any liability to the Fund or its security holders to
which the Advisor shall otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence in the performance of its duties on behalf of the
Fund, reckless disregard of the Advisor's obligations and duties under this
Agreement or the violation of any applicable law.

      6. Unless sooner terminated as provided in Section 7, this Agreement shall
continue in effect from the date hereof until June 15, 1978, and from year to
year thereafter if such continuance is specifically approved at least annually
by the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Fund and, provided that in either event
such continuance is also approved by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the
directors of the Fund who are not


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parties to this Agreement or "interested persons" (as defined in the Investment
Company Act of 1940, as amended) of any such party.

      7. (a) This Agreement may be terminated at any time without payment of any
penalty by the Fund (i) on sixty days written notice to the Advisor, (ii) by
vote of the Board of Directors of the Fund or (iii) by vote of a majority of the
outstanding voting securities of the Fund, or by the Advisor on sixty days
written notice to the Fund.

      (b) This Agreement will automatically terminate in the event of its
assignment (as defined in the Investment Company Act of 1940, as amended).

      8. This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Fund shall have been
approved by vote of a majority of the outstanding voting securities of the Fund.


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      IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

                                            MERRILL LYNCH CAPITAL FUND, INC.

                                            By _________________________________
                                                         President

[Corporate Seal]

ATTEST:

______________________________
        Secretary

                                            MERRILL LYNCH ASSET MANAGEMENT, INC.

                                            By _________________________________
                                                       Vice President

[Corporate Seal]

ATTEST:

______________________________
        Secretary