Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 171

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 171
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ategies.

MVT also may engage in other futures contracts transactions such as futures contracts on other municipal bond indices that
may become available if the Investment Advisor should determine that there is normally a sufficient correlation between the prices of such futures contracts and MVT Municipal Bonds in which MVT invests to make such hedging appropriate.

Futures Strategies. MVT may sell a financial futures contract (i.e., assume a short position) in anticipation of a decline in
the value of its investments resulting from an increase in interest rates or otherwise. The risk of decline could be reduced without employing futures as a hedge by selling investments and either reinvesting the proceeds in securities with shorter
maturities or by holding assets in cash. This strategy, however, entails increased transaction costs in the form of dealer spreads and typically would reduce the average yield of MVT’s portfolio securities as a result of the shortening of
maturities. The sale of futures contracts provides an alternative means of hedging against declines in the value of its investments. As such values decline, the value of MVT’s positions in the futures contracts will tend to increase, thus
offsetting all or a portion of the depreciation in the market value of MVT’s investments that are being hedged. While MVT will incur commission expenses in selling and closing out futures positions, commissions on futures transactions are
typically lower than transaction costs incurred in the purchase and sale of MVT’s investments being hedged. In addition, the ability of MVT to trade in the standardized contracts available in the futures markets may offer a more effective
defensive position than a program to reduce the average maturity of the portfolio securities due to the unique and varied credit and technical characteristics of the instruments available to MVT. Employing futures as a hedge also may permit MVT to
assume a defensive posture without reducing the yield on its investments beyond any amounts required to engage in futures trading.

When
MVT intends to purchase a security, MVT may purchase futures contracts as a hedge against any increase in the cost of such security resulting from a decrease in interest rates or otherwise, that may occur before such purchase can be effected.
Subject to the degree of correlation between such securities and the futures contracts, subsequent increases in the cost of such securities should be reflected in the value of the futures held by MVT. As such purchases are made, an equivalent amount
of futures contracts will be closed out. Due to changing market conditions and interest rate forecasts, however, a futures position may be terminated without a corresponding purchase of