Company: MYI
Filing Date: 2025-09-05
Form Type: 424B3
Source: 0001193125-25-196285
Chunk: 163

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-05
Form: 424B3
Chunk 163
---
 and credit default swaps, may provide investment leverage to MVT’s portfolio. MVT is not required to use
derivatives or other portfolio strategies to seek to hedge its portfolio and may choose not to do so.

The use of
Strategic Transactions may result in losses greater than if they had not been used, may require MVT to sell or purchase portfolio securities at inopportune times or for prices other than current market values, may limit the amount of appreciation
MVT can realize on an investment or may cause MVT to hold a security that it might otherwise sell. Furthermore, MVT may only engage in Strategic Transactions from time to time and may not necessarily be engaging in hedging activities when movements
in interest rates occur.

For so long as the VMTP Shares are rated by a rating agency, MVT’s use of options and
certain financial futures and options thereon will be subject to such rating agency’s guidelines and limitations on such transactions. In order to maintain ratings on the VMTP Shares from one or more rating agencies, MVT may be required to
limit its use of Strategic Transactions in accordance with the specified guidelines of the applicable rating agencies.

Certain federal income tax requirements may restrict or affect the ability of MVT to engage in Strategic Transactions. In
addition, the use of certain Strategic Transactions may give rise to taxable income and have certain other consequences.

Put and Call Options on Securities and Indices. MVT 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. MVT may also purchase and sell

88

options on bond 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