Company: MYI
Filing Date: 2025-09-02
Form Type: N-14 8C/A
Source: 0001193125-25-193985
Chunk: 222

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-02
Form: N-14 8C/A
Chunk 222
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 price at expiration is below the exercise price, MVF
will retain the full amount of the option premium, which provides a partial hedge against any decline that may have occurred in MVF’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. MVF may purchase a put option on a futures contract to hedge MVF’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 price, MVF will retain the full amount of the option premium, which provides a partial hedge against any increase in the price of
securities which MVF 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 MVF 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 MVF.

Interest Rate Transactions. MVF may enter into interest rate swaps and the purchase or sale of interest
rate caps and floors. MVF expects to enter into these transactions primarily to preserve a return or spread on a particular investment or portion of its portfolio as a duration management technique or to protect against any increase in the price of
securities MVF anticipates purchasing at a later date. MVF will ordinarily use these transactions as