Company: MYI
Filing Date: 2025-09-02
Form Type: N-14 8C/A
Source: 0001193125-25-193985
Chunk: 190

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-02
Form: N-14 8C/A
Chunk 190
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 there are financial futures contracts based on long-term U.S. Treasury bonds, U.S. Treasury notes, Government National Mortgage

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Association Certificates and three-month U.S. Treasury bills. MIY may purchase and write call and put options on futures contracts on U.S. Government securities and purchase and sell Municipal
Bond Index futures contracts in connection with its hedging strategies.

MIY 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.

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