Company: MYI
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198172
Chunk: 195

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 195
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Y 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 MIY Municipal Bonds in which MIY invests to make such hedging appropriate.

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

109

When MIY intends to purchase a security, MIY 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 MIY. 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 portfolio