Company: MYI
Filing Date: 2025-09-05
Form Type: 424B3
Source: 0001193125-25-196285
Chunk: 188

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-05
Form: 424B3
Chunk 188
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. 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 MIY’s positions in
the futures contracts will tend to increase, thus offsetting all or a portion of the depreciation in the market value of MIY’s investments that are being hedged. While MIY 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 MIY’s investments being hedged. In addition, the ability of MIY 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 MIY.
Employing futures as a hedge also may permit MIY to assume a defensive posture without reducing the yield on its investments beyond any amounts required to engage in futures trading.

When MIY intends to purchase a security, MIY may purchase futures contracts as a hedge against any increase in the cost of
such security resulting from a decrease in interest rates or otherwise, that may occur before such purchase can be effected. Subject to the degree of correlation between such securities and the futures contracts, subsequent increases in the cost of
such securities should be reflected in the value of the futures held by MIY. As such purchases are made, an equivalent amount of futures contracts will be closed out. Due to changing market conditions and interest rate forecasts, however, a futures
position may be terminated without a corresponding purchase of portfolio securities.

Call Options on Futures Contracts. MIY may also purchase and sell exchange traded call and put options on financial futures contracts. The purchase of a call option on a futures contract is analogous to the purchase of a call option on an individual security. Depending
on the pricing of the option compared to either the futures contract upon which it is based or the price of the underlying securities, it may or may not be less risky than ownership of the futures contract or underlying securities. Like the purchase
of a futures contract, MIY may purchase a call option on a futures contract to hedge against a market advance when MIY is not fully invested.

The writing of a call option on a futures contract constitutes a partial hedge against declining prices of the securities
which are deliverable upon exercise of the futures contract. If the futures price at expiration is below the exercise price, MIY will retain the full amount of the option premium,