Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 188

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 188
---
 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 underlying security above the exercise price of the option for as long as MIY’s obligation as a writer continues. Covered call options serve as a partial hedge against a decline in the price of the underlying
security. MIY may engage in closing transactions in order to terminate outstanding options that it has written.

Additional Information About Options. MIY’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 interest in certain options; (ii) restrictions on transactions imposed by an exchange; (iii