Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 223

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 223
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 however, a futures position may be terminated without a corresponding purchase of portfolio securities.

Call Options on Futures Contracts. MVF may also purchase and sell exchange traded call and put options on financial futures contracts.
The purchase of a call option on a futures contract is analogous to the purchase of a call option on an individual security. Depending on the pricing of the option compared to either the futures contract upon which it is based or the price of the
underlying securities, it may or may not be less risky than ownership of the futures contract or underlying securities. Like the purchase of a futures contract, MVF may purchase a call option on a futures contract to hedge against a market advance
when MVF is not fully invested.

The writing of a call option on a futures contract constitutes a partial hedge against declining prices
of the securities which are deliverable upon exercise of the futures contract. If the futures price at expiration is below the exercise price, MVF will retain the full amount of the option premium, which provides a partial hedge against any decline
that may have occurred in MVF’s portfolio holdings.

Put Options on Futures Contracts. The purchase of a put option on a
futures contract is analogous to the purchase of a protective put option on portfolio securities. MVF may purchase a put option on a futures contract to hedge MVF’s portfolio against the risk of rising interest rates.

The writing of a put option on a futures contract constitutes a partial hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price at expiration is higher than the exercise price, MVF will retain the full amount of the option premium, which provides a partial hedge against any increase in the price of
securities which MVF intends to purchase.

The writer of an option on a futures contract is required to deposit initial and variation
margin pursuant to requirements similar to those applicable to futures contracts. Premiums received from the writing of an option will be included in initial margin. The writing of an option on a futures contract involves risks similar to those
relating to futures contracts.

The CFTC subjects advisers to registered investment companies to regulation by the CFTC if a fund that is
advised by the investment adviser either (i) invests, directly or indirectly, more than a prescribed level of its liquidation value in CFTC Derivatives, or (ii) markets itself as providing investment exposure to such instruments. To the
extent MVF uses CFTC Derivatives, it intends to do