Company: MYI
Filing Date: 2025-09-02
Form Type: N-14 8C/A
Source: 0001193125-25-193985
Chunk: 217

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-02
Form: N-14 8C/A
Chunk 217
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 regular
federal income tax. However, under normal circumstances, MVF does not intend to use Strategic Transactions that give rise to taxable income.

104

Put and Call Options on Securities and Indices. MVF 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. MVF may also purchase and sell 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 MVF’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 MVF against an increase in the price of a security that it
intended to purchase in the future.

Writing Covered Call Options. MVF is authorized to write (i.e., sell) covered call options with respect to
municipal securities it owns, thereby giving the holder of the option the right to buy the underlying security covered by the option from MVF at the stated exercise price until the option expires. MVF writes only covered call options, which means
that so long as MVF is obligated as the writer of a call option, it will own the underlying securities subject to the option.

MVF receives a premium from
writing a call option, which increases MVF’s return on the underlying security in the event the option expires unexercised or is closed out at a profit. By writing a call, MVF 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 MVF’s obligation as a writer continues. Covered call options serve as a partial hedge against a decline in the price of the underlying security. MVF may