Value Line Asset Allocation Fund N-CSR/ACertified annual shareholder report (management investment company) (amended)

Dear Fellow Shareholders:

Increased inflation prompted the U.S. Federal Reserve (the Fed) to begin raising its targeted federal funds rate — by 25 basis points in mid-March 2022, its first such interest rate hike since December 2018. (A basis point is 1/100th of a percentage point.) Fed officials also indicated an aggressive path ahead. Further, the Fed began tapering its quantitative easing asset purchases in an effort to counteract increasing inflation. The Fed’s balance sheet had doubled during the COVID-19 pandemic from approximately $4.5 trillion to about $9 trillion as it sought to ensure financial market liquidity. However, the Fed announced in November 2021 it would begin to taper its large-scale asset purchases by $15 billion per month. In light of higher than consensus expected inflation, it then announced in December 2021 it would double the monthly reduction in purchases to $30 billion per month in January 2022. In January 2022, the Fed announced its purchases would end in March 2022, at which point its balance sheet would stop growing. The Fed stated in March it expects to actually begin reducing its holdings of Treasury securities and agency mortgage-backed securities in the near term but did not yet state when. At an anticipated runoff rate of $95 billion per month, it could take several years for the Fed’s balance sheet to return to pre-pandemic levels. Additionally, the Fed stated at its March meeting “the invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.”

inflation. (Hawkish tends to suggest higher interest rates; opposite of dovish.) Notably, however, the U.S. Treasury yield curve inverted during the first quarter of 2022 for the first time since 2006, meaning longer-term yields were lower than shorter-term yields. While often an indicator of a possible recession, such an inversion does not offer a reliable indicator for the timing of a recession, and we believe strong GDP and consumer spending, low unemployment and rising wages may well keep the U.S. economy from contracting in the near term. For the annual period as a whole, the yield on the three-month U.S. Treasury rose approximately 49 basis points to end the annual period at 0.52%, and the yield on the two-year U.S. Treasury increased approximately 212 basis points to end the annual period at 2.28%. The yield on the bellwether 10-year U.S. Treasury rose approximately 58 basis points to end the annual period at 2.32%. Yields on the 30-year U.S. Treasury increased approximately 3 basis points to end the annual period at 2.44%.

Were there any notable changes in the Fund’s sector weightings during the 12-month period?

The following graph compares the performance of the Value Line Small Cap Opportunities Fund, Inc. to that of the Russell 2000 Index* (the “Index”). The Value Line Small Cap Opportunities Fund, Inc. is a professionally managed mutual fund, while the Index is not available for investment and is unmanaged. The returns for the Index do not reflect charges, expenses or taxes but do include the reinvestment of dividends, if any. The comparison is shown for illustrative purposes only.

The following graph compares the performance of the Value Line Asset Allocation Fund, Inc. to that of the S&P 500® Index* and the 60/40 S&P 500® Index/Bloomberg US Aggregate Bond Index**, (the “Indexes”). The Value Line Asset Allocation Fund, Inc. is a professionally managed mutual fund, while the Indexes are not available for investment and are unmanaged. The returns for the Indexes do not reflect charges, expenses or taxes, but do include the reinvestment of dividends, if any. The comparison is shown for illustrative purposes only.