Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 229

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 229
---
 loss or gain. In addition, a nominal commission is paid on each completed sale transaction.

MVF may also purchase and sell financial futures contracts on U.S. Government securities as a hedge against adverse changes in interest rates
as described below. With respect to U.S. Government securities, currently there are financial futures contracts based on long-term U.S. Treasury bonds, U.S. Treasury notes, Government National Mortgage Association (“GNMA”) Certificates and
three-month U.S. Treasury bills. MVF may purchase and write call and put options on futures contracts on U.S. Government securities and purchase and sell municipal security index futures contracts in connection with its hedging strategies.

MVF 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 the municipal securities in which MVF invests to make such hedging appropriate.

Futures Strategies. MVF 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 MVF’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 MVF’s positions in the futures contracts will tend to increase, thus offsetting all or a
portion of the depreciation in the market value of MVF’s investments that are being hedged. While MVF 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 MVF’s investments being hedged. In addition, the ability of MVF 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 MVF. Employing futures as a hedge also may permit MVF to assume a defensive posture
without reducing the yield on its investments beyond any amounts required