Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 222

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 222
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 connection with its hedging strategies.

MVF
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 the municipal securities in which MVF invests to make such hedging appropriate.

Futures Strategies.
MVF 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 MVF’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 MVF’s positions in the futures

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contracts will tend to increase, thus offsetting all or a portion of the depreciation in the
market value of MVF’s investments that are being hedged. While MVF 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 MVF’s investments being hedged. In addition, the ability of MVF 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 MVF. Employing futures as a hedge also may permit MVF to assume a defensive posture without reducing the yield on
its investments beyond any amounts required to engage in futures trading.

When MVF intends to purchase a security, MVF 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 MVF. As such purchases are made, an equivalent amount of futures contracts will be closed out. Due to
changing market conditions and interest rate forecasts,