Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 195

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 195
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 company may
restrict or affect the ability of MIY to engage in Strategic Transactions. In addition, the use of certain Strategic Transactions may give rise to taxable income and have certain other consequences, such as subjecting a portion of MIY’s
dividends to regular federal income tax. However, under normal circumstances, MIY does not intend to use Strategic Transactions that give rise to taxable income.

Put and Call Options on Securities and Indices. MIY may purchase and sell put and call options on securities and indices. A put option
gives the purchaser of the option the right to sell and the writer the obligation to buy the underlying security at the exercise price during the option period. MIY may also purchase and sell options on bond indices (“”). Index options are similar to options on securities except that, rather than taking or making delivery of securities underlying the option at a specified price upon exercise, an index option gives the holder the right to receive
cash upon exercise of the option if the level of the bond index upon which the option is based is greater, in the case of a call, or less, in the case of a put, than the exercise price of the option. The purchase of a put option on a debt security
could protect MIY’s holdings in a security or a number of securities against a substantial decline in the market value. A call option gives the purchaser of the option the right to buy and the seller the obligation to sell the underlying
security or index at the exercise price during the option period or for a specified period prior to a fixed date. The purchase of a call option on a security could protect MIY against an increase in the price of a security that it intended to
purchase in the future.

Writing Covered Call Options. MIY is authorized to write (i.e., sell) covered call options with respect to
MIY Municipal Bonds it owns, thereby giving the holder of the option the right to buy the underlying security covered by the option from MIY at the stated exercise price until the option expires. MIY writes only covered call options, which means
that so long as MIY is obligated as the writer of a call option, it will own the underlying securities subject to the option.

MIY
receives a premium from writing a call option, which increases MIY’s return on the underlying security in the event the option expires unexercised or is closed out at a profit. By writing a call, MIY limits its opportunity to profit from an
increase in the market value of the