Company: MYI
Filing Date: 2025-09-02
Form Type: N-14 8C/A
Source: 0001193125-25-193985
Chunk: 171

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-02
Form: N-14 8C/A
Chunk 171
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 expiration is below the exercise price, MVT
will retain the full amount of the option premium which provides a partial hedge against any decline that may have occurred in MVT’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. MVT may purchase a put option on a futures contract to hedge MVT’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

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price, MVT will retain the full amount of the option premium which provides a partial hedge against any increase in the price of securities which MVT 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 MVT uses CFTC Derivatives, it
intends to do so below such prescribed levels and will not market itself as a “commodity pool” or a vehicle for trading such instruments. Accordingly, the Investment Advisor has claimed an exclusion from the definition of the term
“commodity pool operator” under the CEA pursuant to Rule 4.5 under the CEA. The Investment Advisor is not, therefore, subject to registration or regulation as a “commodity pool operator” under the CEA in respect of MVT.

Interest Rate Swap Transactions. In order to seek to hedge the value of MVT against interest rate fluctuations, to hedge against
increases in MVT’s costs associated with the dividend payments on any preferred shares, including the VMTP Shares, or to seek to increase MVT’s return, MVT may enter into interest rate swap transactions such as MMD Swaps or SIFMA Swaps.
To the extent that MVT enters into these transactions