Company: MYI
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198172
Chunk: 174

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 174
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. Subsequent payments to and from the broker, called “variation
margin,” are required to be made on a daily basis as the price of the futures contract fluctuates making the long and short positions in the futures contract more or less valuable, a process known as “marking to the market.” At any
time prior to the settlement date of the futures contract, the position may be closed out by taking an opposite position that will operate to terminate the position in the futures contract. A final determination of variation margin is then made,
additional cash is required to be paid to or released by the broker and the purchaser realizes a loss or gain. In addition, a nominal commission is paid on each completed sale transaction.

MVT may also purchase and sell financial futures contracts on U.S. Government securities as a hedge against adverse changes in interest rates
as described below. With respect to U.S. Government securities, currently there are financial futures contracts based on long-term U.S. Treasury bonds, U.S. Treasury notes, Government National Mortgage Association (“”)
Certificates and three-month U.S. Treasury bills. MVT may purchase and write call and put options on futures contracts on U.S. Government securities and purchase and sell municipal security index futures contracts in connection with its hedging
strategies.

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

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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