Company: MYI
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198172
Chunk: 171

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 171
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 security at the exercise price during the option period. MVT may also purchase and sell options on bond

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indices (“index options”). 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 MVT’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
MVT against an increase in the price of a security that it intended to purchase in the future.

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

MVT receives a premium from writing a call option, which increases MVT’s return on the underlying security in the event the option
expires unexercised or is closed out at a profit. By writing a call, MVT limits its opportunity to profit from an increase in the market value of the underlying security above the exercise price of the option for as long as MVT’s obligation as
a writer continues. Covered call options serve as a partial hedge against a decline in the price of the underlying security. MVT may engage in closing transactions in order to terminate outstanding options that it has written.

Additional Information About Options. MVT’s ability to close out its position as a purchaser or seller of an exchange-listed put
or call option is dependent upon the existence of a liquid secondary market on option exchanges. Among the possible reasons for the absence of a liquid secondary market on an exchange are: (i) insufficient trading