$Q,(&&ODVV$3RZHU4XDOLW\PRQLWRU

'HYHORSPHQWDQGSHUIRUPDQFHDQDO\VLV


$QGUHV(/HJDUUHWD -XOLR$%RUWROLQ
(QJLQHHULQJDQGGHYHORSPHQWGHSDUWPHQW (QJLQHHULQJDQGGHYHORSPHQWGHSDUWPHQW
(FDPHF7HFQRORJtD (FDPHF7HFQRORJtD
%XHQRV$LUHV$UJHQWLQD %XHQRV$LUHV$UJHQWLQD
GHVDUUROOR#HFDPHFFRPDU MERUWROLQ#HFDPHFFRPDU


-DYLHU+)LJXHURD 
(QJLQHHULQJDQGGHYHORSPHQWGHSDUWPHQW 
(FDPHF7HFQRORJtD 
%XHQRV$LUHV$UJHQWLQD 
LQJHQLHULD#HFDPHFFRPDU

$EVWUDFW²3RZHU 4XDOLW\ DVVHVVPHQW LV WRGD\ RQH RI WKH PDLQ FRPSOHWH VHW RIUHJXODWLRQV WR GHVFULEH WKH ZKROH VSHFWUXP RI
ZD\V WR LPSURYH HQHUJ\ HIILFLHQF\ ,QWHUQDWLRQDO VWDQGDUGV WHQG HOHFWULFPDJQLWXGHVUHODWHGWRSRZHUTXDOLW\OHGWRGLIIHUHQFHV
WR UHVWULFW WKH ZD\ WKLV DVVHVVPHQW LV GRQH E\ GHILQLQJ WKH LQWKHUHVXOWVGHSHQGLQJRQWKHPDQXIDFWXUHURIWKHLQVWUXPHQW
PHDVXUHPHQWVPHWKRGVWKDWVKRXOGEHDGRSWHGE\DQLQVWUXPHQW DQGWKHFRQGLWLRQVWKDWZHUHDSSOLHG7KLVVLWXDWLRQWXUQHGWKH
7KLV ZRUN GHVFULEHV VRPH RI WKH FRQVWULFWLRQV DQG UHTXLUHPHQWV FRPSDULVRQGLIILFXOWZKHQQRWLPSRVVLEOH
DVVXPHG IRU WKH GHVLJQ RI WKH KLJK SHUIRUPDQFH 3RZHU 4XDOLW\
'XULQJ \HDU  WKH ,(&  (G ZDV SUHVHQWHG
GDWD ORJJHU 34 WDNLQJ LQWR DFFRXQW WKH LQWHUQDWLRQDO
VWDQGDUGV ,(&  &ODVV $ DQG WKH ,(&  DQGLWVQHZHGLWLRQZDVUHOHDVHGLQ,(&(G
SXEOLVKHG LQ $XJXVW  7URXJK LW WKH PRVW LPSRUWDQW  >@ DV LWV SUHGHFHVVRU GHILQHV &ODVV $ LQVWUXPHQWV DV WKH
GHPDQGVRIWKH,(&FODVV$LQVWUXPHQWVDUHH[SRVHG RQHV DSSOLHG LQ FRQWUDFWXDO VXEMHFWV VWDQGDUG FRPSOLDQFH
'HWDLOVRIWKHKDUGZDUHFRPSRQHQWVDUHDOVRVKRZQDQGWKHPRVW YHULILFDWLRQ DQG GLVSXWHV UHVROXWLRQ ,WV PDLQ REMHFWLYH LV WKDW
LPSRUWDQWSRLQWVRIWKHVLJQDOSURFHVVLQJSDWKDUHH[SODLQHG7KH PHDVXUHPHQWV IURP GLIIHUHQW LQVWUXPHQWV RI GLIIHUHQW
SHUIRUPDQFH LQ WKH 506 YDOXHV GHWHUPLQDWLRQ LV JLYHQ DOVR WKH PDQXIDFWXUHUVDQGPRGHOVZLOOJLYHLGHQWLFDOUHVXOWVZLWKLQWKH
IUHTXHQF\UHVSRQVHIRUKDUPRQLFVPHDVXUHPHQWDUHVKRZQDQGD XQFHUWDLQW\EDQGZKHQFRQQHFWHGWRWKHVDPHVLJQDO,WGHILQHV
GHWDLOHGDQDO\VLVRIIXOILOOPHQWRIWKHWHVWVJLYHQLQWKH,(& WKH PHDVXUHPHQW PHWKRGV HVWDEOLVKLQJ D JXLGH IRU UHVXOWV
 HG  DUH JLYHQ LQ WKH ILQDO VHFWLRQ %HIRUH WKH
LQWHUSUHWDWLRQDQGDSHUIRUPDQFHVSHFLILFDWLRQQRWIRUGHVLJQRI
SXEOLFDWLRQ RI WKLV HG WKH &LJUq &&,5(' 
&&28,(:*SURWRFROZDVWKHUHIHUHQFHGRFXPHQWWKDW WKHLQVWUXPHQW
LQDGGLWLRQZLWKWKH,(&VWDQGDUGZDVXVHGIRUWKHHYDOXDWLRQRI
,,,(&('0$,15(48,5(0(176
GLJLWDOIOLFNHU PHWHUV7KLVSURWRFRODLPLVWRJXDUDQWHHDKLJKHU
GHJUHH RI FRPSDWLELOLW\ EHWZHHQ LQVWUXPHQWV RI GLIIHUHQW 7DEOH  SUHVHQWV WKH PDLQ PHDVXUHPHQW UHTXLUHPHQWV
PDQXIDFWXUHUV DQG PRGHOV 7KH WHVWV KHUH SUHVHQWHG LQWHQG WR H[SRVHGLQWKHVWDQGDUGIRUWKH&ODVV$LQVWUXPHQW>@
VXEPLWWKHHTXLSPHQWVWR D PRUHUHDOVLWXDWLRQDQGWU\WRVKRZ 
SRVVLEOH KDUGZDUH RU ILUPZDUH GHIHFWV 7KH UHVXOWV JLYHQ E\ WKH 7$%/(5$1*(6$1'72/(5$1&(6
34ZLGHO\VXUSDVVHVWKHVWDQGDUGVH[LJHQFLHV 
 8QFHUWDLQW\
5DQJHV
.H\ZRUGV3RZHU4XDOLW\'DWD/RJJHU,(&&ODVV$ 3DUDPHWHU 7ROHUDQFHV
,(&+DUPRQLFV)OLFNHU ,(& 34 ,(& 34

+]“+]
)UHTXHQF\ “P+] P+]
+]“+]
,  32:(548$/,7<021,725,1*
9ROWDJH a
3RZHU 4XDOLW\ DVVHVVPHQW LQ HOHFWULFDO HQHUJ\ GLVWULEXWLRQ 7UXH506 8',1
a “ 
REH\V WR FRQWURO HQWLWLHV UHTXLUHPHQWV XVHU FRPSODLQV DQG
&XUUHQW $FF7UDGXFHU5DQJH “)6 
QHWZRUNPDLQWHQDQFHVFKHGXOHV7KHLQVWUXPHQWVDSSOLHGPXVW
DOORZ WKH FRPSOHWH DQDO\VLV RI WKH VXSSOLHG PDJQLWXGHV )OLFNHU
a a “ 
9ROWDJH DQG FXUUHQW PDLQV IUHTXHQF\ SRO\SKDVH V\VWHP 3673/7
XQEDODQFH YROWDJH HYHQWV DV GLSV VZHOOV DQG LQWHUUXSWLRQV 8QEDODQFH X
a a “ 
KDUPRQLFDQGLQWHUKDUPRQLFFRQWHQWIOLFNHUDQGWUDQVLHQWV \X
)URPVHYHUDO\HDUVWKH506YROWDJHWKHVSHFWUDOFRQWHQWDQG 
IOLFNHU ZHUH GHILQHG E\ WKH VWDQGDUGV EXW WKH DEVHQFH RI D

978-1-4673-0378-1/11/$26.00 ©2011 IEEE

 5DQJHV
8QFHUWDLQW\ WR WKH ƒ RUGHU 7KH GHWHUPLQDWLRQ RI DOO WKH VSHFWUDO
3DUDPHWHU 7ROHUDQFHV FRPSRQHQWV VKRXOG EH GRQH LQ UHDO WLPH ZLWKRXW JDSV
,(& 34 ,(& 34 FRQWLQXRXVVDPSOLQJ 
9ROWDJH
a “  )OLFNHU ,W LV GHILQHG E\ WKH ,(&  VWDQGDUG >@
+DUPRQLFV
7KHXQFHUWDLQW\UHTXLUHGLVIRU367LQWKHOHYHOVRIWR
,QWHUKDUP ǻ99#367  “  7KLVSDUDPHWHULVIXUWKHUDQDO\]HGLQGHWDLO
 $GGLWLRQDO UHTXLUHPHQWV 7KH QRUPDWLYH >@ HVWDEOLVKHV
(YHU\ &ODVV $ LQVWUXPHQW VKRXOG JLYH WKH VDPH UHVXOWV LQIOXHQFHTXDQWLWLHVUDQJHVWKDWWKHLQVWUXPHQWVKRXOGZLWKVWDQG
ZKHQ FRQQHFWHG WRWKH VDPH VWLPXOXV 7KHUHGXFHGWROHUDQFHV ZLWK LWV UHVXOWV ZLWKLQ WKH XQFHUWDLQW\ OHYHOV VWDWHG LQ WKH
IRU PDJQLWXGHV WKH FRPELQDWLRQ RI WHVWV DQG WKH XQLTXH WLPH VWDQGDUG
DJJUHJDWLRQ PHWKRG UHVWULFWV WKH SHUIRUPDQFH RI WKLV NLQG RI
HTXLSPHQW7KLVQRUPDWLYHDOVRGHILQHVWZRDGGLWLRQDOFODVVHV ,,, 5()(5(1&(,167580(17)257(67,1*

FODVV 6 DQG FODVV % IRFXVHG RQ VWDWLVWLFDO VXUYH\ DQG IRU 7KH YDOLGDWLRQ RI WKH LQVWUXPHQW FRQVLVWHG LQ KDUGZDUH
SUHOLPLQDU\PHDVXUHPHQWUHVSHFWLYHO\ ILUPZDUH DQG VRIWZDUH WHVWV 7KH HOHFWULFDO SDUDPHWHUV
$JJUHJDWLRQ ,QWHUYDOV $UH WKH WLPH SHULRGV GXULQJ ZKLFK FDOLEUDWRU )OXNH $ >@ ZDV XVHG LQ (&$0(&
WKH LQVWUXPHQW VKRXOGDYHUDJH PHDVXUHV7KH VWDQGDUGGHILQHV PHDVXUHPHQW ODERUDWRU\ GXULQJ WKH GHYHORSPHQW VWDJH
IRXUEDVLFLQWHUYDOVIRU+]V\VWHPVF\FOHVRIIXQGDPHQWDO 3UHSURGXFWLRQ VDPSOHV ZHUH WHVWHG LQ JRYHUQPHQWDO
IUHTXHQF\  F\FOHV DJJUHJDWHG IURP ILIWHHQ  F\FOHV ODERUDWRULHV IDFLOLWLHV WHVWLQJ FRPSOLDQFH ZLWK PHDVXUHPHQW
LQWHUYDOV   PLQXWHV GHWHUPLQHG ZLWK DQ DEVROXWH LQWHUQDO WHFKQLTXHV DQG XQFHUWDLQW\ OHYHOV HOHFWULFDO VDIHW\
FORFN  DQG D  KRXU LQWHUYDO DJJUHJDWHG IURP WZHOYH  HQYLURQPHQWDODQGHOHFWURPDJQHWLFFRPSDWLELOLW\
PLQXWHV LQWHUYDOV  $OO WKH SDUDPHWHUV PHDVXUHG LQ H[FHSWLRQ 
RI PDLQV IUHTXHQF\  VKRXOG EH SURFHVVHG XVLQJ WKLV WLPH ,9,03/(0(17('+$5':$5(,1'$7$/2**(5
VFKHPHLQUHDOWLPHZLWKRXWVDPSOHVORVV6HH)LJ (&$0(&34
 

7LPH UHIHUHQFH 5HDO WLPH LQWHUQDO FORFN XQFHUWDLQW\ LV $FFRUGLQJ WR WKH UHTXLUHPHQWV HVWDEOLVKHG LQ WKH VWDQGDUG
GHILQHG LQ PV IRU +] PDLQV V\VWHPV 3HULRGLFDO UH >@ WKH KDUGZDUH ZDV GHYHORSHG ZLWK VXLWDEOHFDSDFLW\ IRU LWV
V\QFKURQL]DWLRQLVGHPDQGHGE\UHPRWH IRUH[DPSOH*36 RU DFFRPSOLVKPHQW DQG IRU IXWXUH SHUIRUPDQFH XSJUDGHV )LJ 
ORFDOWHFKQLTXHLIWKLVH[WHUQDOV\QFKURQL]DWLRQLVQRWDYDLODEOH SUHVHQWV D VLPSOLILHG KDUGZDUH EORFN GLDJUDP RI WKH 34
WLPHXQFHUWDLQW\VKRXOGQRWH[FHHGVHFRQGHDFKKV >@FRPSRQHQWV

0DLQV )UHTXHQF\ =HUR FURVVLQJ WHFKQLTXH IRU SHULRGV RI
57&
VHFRQGVLVSURSRVHGE\WKHVWDQGDUGEXWRWKHUPHWKRGVDUH $'&

(7$3$$1$/Ï*,&$
DFFHSWHG LI WKH UHVXOWV XQFHUWDLQW\ LV HTXLYDOHQW 0D[LPXP

'($'$37$&,Ï1
)5217(1'
XQFHUWDLQW\ LV P+] LQ WKH UDQJH RI “ RI WKH QRPLQDO

$1$/2*

IUHTXHQF\“+]DQG“+] 'DWD/RJJHU
&75/ '63 3//
&RQWUROOHU
5(*,6752
5069ROWDJH8QFHUWDLQW\RIRIWKHQRPLQDOYROWDJH
LV  UHTXLUHG LQ WKH UDQJH RI  WR  RI WKH QRPLQDO
YROWDJH
$'&
+DUPRQLFV DQG ,QWHUKDUPRQLFV &ODVV $ GHILQHV LWV 
UHVWULFWLRQVEDVHGLQWKH,(&&ODVV,VWDQGDUG>@XS )LJ+DUGZDUHEORFNGLDJUDP


)LJ7LPHDJJUHJDWLRQVFKHPH± ILJXUHIURP,(&(G&ODVV$DJJUHJDWLRQPHWKRG 
 
 
 
 
 
  
)LJ)OLFNHU0HWHUEORFNGLDJUDP
 



'DWDORJJHUFRQWUROOHU7KLVVWDJHFRQWUROVWKHGDWDPHPRU\
DQGWKHFRPPXQLFDWLRQLQWHUIDFHIRUGDWDWREHUHDGIURPD3&
57& 5HDO 7LPH &ORFN  ,V WKH WLPH UHIHUHQFH IRU WKH 
PLQXWHVLQWHUYDOUHTXLUHG,WVXQFHUWDLQW\LVEHWWHUWKDQSSP
JLYLQJ D VWDELOLW\ EHWWHU WKDQ  VHFRQGV D GD\ '63 'LJLWDO
6LJQDO 3URFHVVRU  7KH PHDVXUHPHQWV DOJRULWKPV DUH
LPSOHPHQWHG E\ WKLV VWDJH ,W LV D  ELW IORDWLQJ SRLQW
DUFKLWHFWXUHZLWKPD[LPXPFDSDFLW\RI*IORSV3//3KDVH
/RFN/RRSSURJUDPPDEOHRVFLOODWRUWKDWSURYLGHVWKHVDPSOLQJ
IUHTXHQFLHVIRUWKHWZR$'&V $QDORJWR'LJLWDO&RQYHUWHU ,W
LVIHHGEDFNHGZLWKWKHPDLQVIUHTXHQF\YDOXH$'&ELW 
)LJ0D[LPXPUHODWLYHHUURU“
FKDQQHO DQDORJ WR GLJLWDO FRQYHUWHU ([FHSW )OLFNHU DQG PDLQV
IUHTXHQF\ DOO WKH RWKHU PDJQLWXGH PHDVXUHPHQWV DUH $'&VWDJHLVDLPHGWRWKHPHDVXUHPHQWSURFHVVRIPDLQV
DFFRPSOLVKHGZLWKWKHVDPSOHVSURYLGHGE\WKLVVWDJH$'& IUHTXHQF\ DQG IOLFNHU 3673/7 ,W KDV HPEHGGHG WKH EORFNV
 ELW  FKDQQHO DQDORJ WR GLJLWDO FRQYHUWHU ,W SURYLGHV WKH GHILQHG E\ WKH IOLFNHU PHWHU VWDQGDUG >@ )UHTXHQF\ LV
VDPSOHVIRUWKHIOLFNHUPHDVXUHPHQWSURFHVVDQGIRUWKHPDLQV PHDVXUHG ZKLOH WKH GHPRGXODWLRQ SURFHVV LV DFFRPSOLVKHG
IUHTXHQF\FDOFXODWLRQXVHGWRIHHGEDFNWKH3//VWDJH$QDORJ WKURXJKDGLJLWDO+LOEHUW7UDQVIRUP
)URQW (QG 2SHUDWLRQDO DPSOLILHUV DUUDQJH WKDW FRQGLWLRQV WKH :KDW IROORZV LV DQ H[SODQDWLRQ DERXW WKH IXQFWLRQDOLW\ RI
DQDORJVLJQDOSULRUWRWKHVDPSOLQJSURFHVV HDFK EORFN DFFRUGLQJ WR >@ VHH )LJ   DQG WKH
)LJXUH  VKRZV WKH DQDORJ VWDJH SOXV WKH VDPSOLQJ VWDJH LPSOHPHQWDWLRQGHWDLOVLQWKH34
SHUIRUPDQFH 7KH ))7 RI WKH VLJQDO DFTXLUHG E\ WKH $'& %RFN  7KH OHYHO RI LQSXW YROWDJH LV DGDSWHG ZLWK DQ
VWDJHLVVKRZQ1RWHWKDWWKHQRLVHIORRULVEHORZ±G%VHH DXWRPDWLFJDLQFRQWURO $*& WRSURYLGHWKHQH[WEORFNZLWKD
)LJ FRQVWDQWOHYHOLQSXW
 %ORFN  'HPRGXODWLRQ RI WKH VLJQDO ZLWK D TXDGUDWLF
9  $/*25,7+06758&785( PXOWLSOLHUDFFRUGLQJWR>@,QWKH34VFKHPHWKLVEORFNLV


7KH PHDVXUHPHQWV DQG FDOFXODWLRQV DUH VWUXFWXUHG LQ WZR UHSODFHGZLWKD+LOEHUWWUDQVIRUPSURFHVV>@>@>@JLYLQJWKH

PDLQ VHFWLRQV $'& DQG $'& 7KH $'& ZKLFK KDV  DPSOLWXGH PRGXODWLRQ VLJQDO RI WKH PDLQV 7KLV SURFHVV
VLPXOWDQHRXV DFTXLVLWLRQ FKDQQHOV SURFHVVHV WKH YROWDJH DQG SURYLGHVLQIRUPDWLRQVDPSOHE\VDPSOHRIWKHYROWDJHSKDVRULQ
FXUUHQW VLJQDOV REWDLQLQJ WKH 506 YDOXHV DQG HOHFWULF SRZHU WKH IXQGDPHQWDO IUHTXHQF\ LQ PRGXOH DQG SKDVH VHH )LJ  
PDJQLWXGHV PHDVXUHG E\ WKH 34 )LJ  VKRZV WKH :LWK WKLV LQIRUPDWLRQ WKH $0 LV REWDLQHG DQG DOVR WKH
DFFXUDF\ DQG VWDELOLW\ RI YROWDJH PHDVXUHPHQWV REWDLQHG IRU IUHTXHQF\RIPDLQVLVPHDVXUHGZLWKDQXQFHUWDLQW\ORZHUWKDQ
HDFK FKDQQHO IURP  F\FOHV EXIIHUV WKURXJK D SHULRG RI WHQ P+] VHH )LJ   7KH IUHTXHQF\ REWDLQHG LQ WKLV VWDJH LV
PLQXWHV WKHQXVHGWRVKLIWWKHVDPSOLQJIUHTXHQF\IRUWKH))7DQG506
 DSSOLFDWLRQV $'&VHFWLRQ 
%ORFN  $SDUW IURP WKH $0 VLJQDO WKH GHPRGXODWLRQ
SURFHVVDVQRWEHLQJOLQHDUJLYHVVHYHUDORUGHUKDUPRQLFV



)LJ±)UHTXHQF\PHDVXUHPHQWEORFNV


)LJ615$'&LQYROWDJHFKDQQHOV
 DFFRUGDQFHZLWKWKHPDLQREMHFWLYHRIWKH>@ZKLFKLQYRNHV>@
IRUIOLFNHUPHDVXUHPHQW7RUHLQIRUFHWKLVZHDNQHVVWKH&LJUq
&SURWRFRO>@ZDVFUHDWHG,WVWDWHGDVHULHVRIWHVWVWR
HYDOXDWH GLJLWDO IOLFNHU PHWHUV ,Q WKH SUHVHQW WKH GHVLJQ
QRUPDWLYH,(&(GDGRSWVVRPHRIWKH
&LJUq SURWRFRO WHVWV 7KH WHVWV DSSOLHG DQG LWV UHVXOWV RQ WKH
34GDWDORJJHU>@DUHSUHVHQWHG

9,, 7(673(5)250$1&(,(&
 
)LJ)UHTXHQF\UHODWLYHHUURU“P+]
 $ 7HVW1ı367ZLWKVTXDUHPRGXODWLRQ
FRPSRQHQWV LQWHUKDUPRQLFV DQG '& FRPSRQHQW ZKLFK PXVW 367RI“VKRXOGEHJLYHQZKHQVWLPXOXVHVWDEOLVKHGLQ
EH UHPRYHG EHIRUH WKH ZHLJKLQJ ILOWHU DSSOLHG 7KLV EORFN LV WDEOHRI>@DUHDSSOLHG6HHWKH34UHVXOWVLQ)LJ
DFFRPSOLVKHGXVLQJDKLJKSDVVDQGDORZSDVVILOWHUVZLWKWKHLU 
SROHVDQG]HURVFRQILJXUDWLRQDVHVWDEOLVKHGLQ>@DQGIRUWKH
ZHLJKLQJILOWHUWKHVSHFLILFDWLRQJLYHQLQWDEOHRI>@LVXVHG
7KH GLJLWDO LPSOHPHQWDWLRQ RI WKH ILOWHUV GHVLJQHG LQ WKH
DQDORJLFDOZD\LVPRGHOHGZLWKWKHDQDORJWRGLJLWDOWHFKQLTXH
RI WUDQVIRUPDWLRQ ,038/6( ,19$5,$17 ZKLFK LQ
FRPSDULVRQ ZLWK WKH %,/,1($/ WHFKQLTXH JLYHV D EHWWHU
DGMXVWPHQWLQWKHIUHTXHQFLHVDERYHKDOI1\TXLVW VHH)LJ 



)LJXUH367YV5HFWDQJXODUFKDQJHVSHUPLQXWH

% 7HVW1ı,QVWDQW)OLFNHUZLWKVTXDUHPRGXODWLRQ
8QLW SHUFHSWLELOLW\ IRU LQVWDQW IOLFNHU “ VKRXOG EH JLYHQ
ZKHQVWLPXOXVHVWDEOLVKHGLQWDEOHRI>@DUHDSSOLHG6HHWKH
34UHVXOWVLQ)LJ


)LJ+3) /3) :)%ORFN

%ORFN$TXDGUDWLFPXOWLSOLHUDQGDORZSDVVILOWHUPRGHOV
WKHFXPXODWLYHGLVWXUEDQFHRIIOLFNHULQJLQDQLQGLYLGXDOEUDLQ
7KH RXWSXW RI WKLV EORFN LV LQVWDQWDQHRXV IOLFNHU LGHQWLILHG DV
2XWSXW  LQ >@ ZKLFK PDJQLWXGH LV GHQRPLQDWHG DV
SHUFHSWLELOLW\
%ORFN  2XWSXW  VLJQDO IHHGV D VWDWLVWLFDO FODVVLILHU
FRPSRVHG RI  WR  FODVVHV )URP WKLV UHVXOWLQJ
GLVWULEXWLRQSHUFHQWLOHV367LVFDOFXODWHG

9, ,(&5(48,5(0(176 
 )LJ8QLWSHUFHSWLELOLW\“
6WDQGDUG >@ VWDWHV GHVLJQ SDUDPHWHUV IRU WKH HTXLSPHQWV 
LQWHQGHG WR PHDVXUH DQG TXDQWLI\ OLQH YROWDJH IOXFWXDWLRQV DV
& 7HVW1ı,QVWDQW)OLFNHUZLWKVLQPRGXODWLRQ
,QVWDQW )OLFNHU 6KRUW 7HUP )OLFNHU 367  DQG /RQJ 7HUP
)OLFNHU 3/7 ,WHVWDEOLVKHVWKHFULWHULDIRUEORFNVFRQVWUXFWLRQ 8QLW SHUFHSWLELOLW\ IRU LQVWDQW IOLFNHU “ VKRXOG EH JLYHQ
IRU GDWD DFTXLVLWLRQ GHPRGXODWLRQ ILOWHULQJ ZHLJKLQJ DQG ZKHQVWLPXOXVHVWDEOLVKHGLQWDEOHRI>@DUHDSSOLHG6HHWKH
VWDWLVWLFDO DQDO\VLV IRU WKH IOLFNHU PHDVXUHPHQW 7KH 34UHVXOWVLQ)LJ

DFFRPSOLVKPHQWRIWKLVVWDQGDUGSUHGHFHVVRU ,(&
(G   ZDV QRW VXIILFLHQW WR JXDUDQWHH LGHQWLFDO
UHVXOWV EHWZHHQ GLIIHUHQW LQVWUXPHQWV ZKHQ VXEPLWWHG WR WKH
VWLPXOXVDFWXDOO\SUHVHQWLQHOHFWULFDOQHWZRUNV7KLVZDVQRWLQ
 
)LJ8QLW367VTXDUHPRGXODWLRQZLWK
LQWHUKDUPRQLFVZHHSLQWKHUDQJHN+]WRN+]
 
)LJ8QLWSHUFHSWLELOLW\“ZLWKVLQXVRLGDOPRGXODWLRQ
UDQJHIURPWRIRU3677KHWHVWYHULILHVWKHOLQHDULW\ZLWK

9,,,,0081,7<7(676±&,*5Ê35272&2/ UHVSHFW WR WKH DPSOLWXGH RI WKH YROWDJH PRGXODWLRQ /LQHDULW\
 FRXOGEHDIIHFWHGLQWKHILOWHUVWDJHVDQGGXHWRWKHUHVROXWLRQ
7ZRWHVWVRILPPXQLW\IURP>@WKDWDUHQRWLQFOXGHGLQ>@ RIWKHVWDWLVWLFDOFODVVLILHU 6HH)LJ 
DUHVKRZQWRGHPRQVWUDWHWKDWZKHQDSSOLHGWR34GRQRW 
JLYH IDOVH IOLFNHU UHVSRQVH $GGLWLRQDOO\ D OLQHDULW\ WHVW LV
DSSOLHG WKLVRQHLQFOXGHGLQ>@DQG>@ 

' 7HVW1ı0DLQV)UHTXHQF\YDULDWLRQV
0DLQV IUHTXHQF\ PDJQLWXGH IOXFWXDWLRQ LQ VWDELOLW\
FRQGLWLRQVRI P+]V VKRXOGQRW JLYH IDOVH  IOLFNHUUHVSRQVH
7KLVWHVW LV YHULILHG ZLWK DQ +] PRGXODWLRQ ZLWK XQLW 367
YHULI\LQJ WKDW WKH PHDVXUHPHQWV JLYHQ DUH ZLWKLQ “ 6HH
UHVXOWVLQ)LJ



)LJ5HODWLYHHUURUYV367

,; ,1)/8(1&(7(676±,(&

$ 7HVW1ı,QWHUKDUPRQLFVSDLULQIOXHQFH
7KHSUHVHQFHRIWZRIUHTXHQF\FRPSRQHQWVQHDUHDFKRWKHU
FDQ FDXVH IOLFNHU PRGXODWLRQ 7KLV SKHQRPHQRQ RFFXUV EDVHG
LQUHVRQDQFHORRSVZLWKDIUHTXHQF\QHDUDKDUPRQLFSUHVHQWLQ
 WKH YROWDJH VLJQDO )RU H[DPSOH D ƒ KDUPRQLF SUHVHQW LQ WKH
)LJ367SHUIRUPDQFHZLWKPDLQVIUHTXHQF\YDULDWLRQ
QHWZRUN +]RU+] DQGDQLQWHUKDUPRQLFRI+]RU
+]DOVRSUHVHQW7KHYHULILFDWLRQRILQIOXHQFHLVWRPHDVXUH
( 7HVW1ƒ±6HFRQGRUGHUKDUPRQLFLQIOXHQFH XQLW LQVWDQWDQHRXV IOLFNHU ZLWK D WROHUDQFH RI “ ZLWKRXW
7KH SUHVHQFHRI FRPSRQHQWVDERYH WZLFH PDLQV IUHTXHQF\ PRGXODWLRQLQWKHIXQGDPHQWDOIUHTXHQF\7KHSDLUDPSOLWXGHLV
VKRXOG QRW JLYH IDOVH  IOLFNHU PHDVXUHPHQWV 7KHVH  VWDUWLQJ ZLWK +] +]  SDLU DQG LW KDV WR EH
FRPSRQHQWV FRXOG EH FDXVH RI DOLDV HIIHFW LQ WKH VDPSOLQJ WHVWHGDWOHDVWWRWKHƒKDUPRQLF +]  6HH)LJ 
VWDJH7KLVWHVWLVYHULILHGZLWKDQ+]PRGXODWLRQZLWKXQLW
367YHULI\LQJWKDWWKHPHDVXUHPHQWVJLYHQDUHZLWKLQ“,W % 7HVW 1ƒ ± 6LPXOWDQHRXV SHULRGLFDO FKDQJHV RI YROWDJH
LV LPSRUWDQW WR REVHUYH WKDW ƒ KDUPRQLFV FDQ LQWURGXFH IDOVH DQGIUHTXHQF\
IOLFNHU UHDGLQJV ZKHQ LW LV DERYH  RI WKH IXQGDPHQWDO
0HDVXUHPHQWRIXQLWLQVWDQWIOLFNHUZLWKDWROHUDQFHRI“
PDJQLWXGH IRU WKLV UHDVRQ LW LV HOLPLQDWHG XVLQJ D VWRSEDQG
ZLWKVLPXOWDQHRXVFKDQJHVRIYROWDJHDQGIUHTXHQF\HDFKIRXU
ILOWHU
VHFRQGV LQ WKH ]HUR FURVVLQJ RI WKH VLJQDO ,Q DFFRUGDQFH WR
WDEOHRI>@+]#9DQG+]#9
) 7HVW1ƒ/LQHDULW\(YDOXDWLRQ ZKHUHDSSOLHGSHULRGLFDOO\ 6HH7DEOH 
7KH SHUIRUPDQFH RI WKH LQVWUXPHQW LV DOVR HYDOXDWHG LQ 
DFFRUGDQFHZLWKWKH367UDQJHLWPDLQWDLQVXQFHUWDLQW\OHYHOV
7KH VWDQGDUG >@ HVWDEOLVKHV D UDQJH RI  WR  IRU WKLV
SDUDPHWHU7KH&LJUqSURWRFRO>@&ODVVLQVWUXPHQWGHILQHVD
 

 
)LJ,QVWDQWIOLFNHUUHVSRQVHLQSUHVHQFHRILQWHUKDPRQLFSDLU )LJ0RGXODWLRQVKDSHIRUWHVW1ž

& 7HVW 1ƒ ± )XQGDPHQWDO PRGXODWLRQ ZLWK RGG KDUPRQLF 7$%/(
GLVWRUWLRQƒaƒ 7HVW1ž 7HVW1ž 7HVW1ž 7HVW1ž
0HDVXUHPHQWRIXQLWLQVWDQWIOLFNHUZLWKDWROHUDQFHRI“ ǻ 3KDVHMXPS 'XW\
+DUPRQLFV
)UHT  &\FOH
ZLWK VLQXVRLGDO PRGXODWLRQ RI  DW +] ZLWK YROWDJH
a “ž “ž 
VLPXOWDQHRXV FRQWHQW RI FRPSRQHQWV IURP ƒ WR ƒ LQ     
DFFRUGDQFH ZLWK 7DEOH  ZLWK D UHVXOWDQW 7+' HTXDO WR
5HIHUHQFHYDOXHV
 6HH7DEOH 
367 367
L)/. 367
a a
' 7HVW1ƒ±)OLFNHUFDXVHGE\SKDVHMXPSLQIXQGDPHQWDO “ “
 
9HULILFDWLRQ RI 367 LQ D  PLQXWHV LQWHUYDO DFFRUGLQJ WR 
UHIHUHQFHYDOXHVJLYHQLQ7DEOHZLWKSKDVHFKDQJHVRI“ƒ 
DQG“ƒLQWKH]HURFURVVLQJLQWKHPLQXWHVDQGRI 5()(5(1&(6

WKHLQWHUYDO6HH7DEOH >@ ,(&(GLWLRQ±(OHFWURPDJQHWLFFRPSDWLELOLW\
(0& 3DUW7HVWLQJDQGPHDVXUHPHQWWHFKQLTXHV±3RZHUTXDOLW\
( 7HVW1ı)OLFNHUSUHVHQWLQPRGXODWLRQRIRIGXW\ PHDVXUHPHQWPHWKRGV
F\FOHRIWKHREVHUYDWLRQSHULRG >@ ,(& (GLWLRQ  ±  (0& ± 3DUW  7HVWLQJ DQG
PHDVXUHPHQW WHFKQLTXHV ± *HQHUDO JXLGH RQ KDUPRQLFV DQG
9HULILFDWLRQRI367LQDJLYHQWLPHLQWHUYDOZLWK+]DQG LQWHUKDUPRQLFV PHDVXUHPHQWV DQG LQVWUXPHQWDWLRQ IRU SRZHU VXSSO\
DPSOLWXGHPRGXODWLRQDFFRUGLQJWRWDEOHLQ>@IRUD V\VWHPVDQGHTXLSPHQWFRQQHFWHGWKHUHWR
QRPLQDO YROWDJH RI 9  RI WKH PHDVXUHPHQW SHULRG LV >@ ,(&   (0&  ± 3DUW  7HVWLQJ DQG
PHDVXUHPHQW WHFKQLTXHV ± )OLFNHUPHWHU ± )XQFWLRQDO DQG GHVLJQ
GRQH ZLWK WKLV VWLPXOXV DQG WKH  OHIW ZLWKRXW PRGXODWLRQ VSHFLILFDWLRQV
6HH)LJDQGWKHUHVXOWVLQ7DEOH >@ )OXNH$(OHFWULFDO3RZHU6WDQGDUG
 >@ 3RZHU4XDOLW\'DWDORJJHU(&$0(&34,(&&ODVV
7$%/( $FRPSOLDQWKWWSZZZHFDPHFFRPDUSURGXFWRGHWDOOHSKS"LG 
+DUPRQLF
      >@ ( $ )HLODW 6HQLRU 0HPEHU ,((( ³'HWHFWLRQ RI YROWDJH HQYHORSH
RUGHU XVLQJSURQ\DQDOLV\V±+LOEHUWWUDQVIRUPPHWKRG´,(((7UDQVDFWLRQRQ
8       SRZHUGHOLYHU\9RO1ž2FW
+DUPRQLF >@ 7$EGHO*DOLO((O6DDGDQ\0HPEHU,(((DQG06DODPD)HOORZ
      ,((( ´+LOEHUW WUDQVIRUP EDVHGFRQWURO DOJRULWKP RI WKH '* LQWHUIDFH
RUGHU
IRU YROWDJH IOLFNHU PLWLJDWLRQ´ ,((( 7UDQVDFWLRQ RQ SRZHU GHOLYHU\
8      
9RO1ž$SULO
 >@ 7$EGHO*DOLO0HPEHU,(((((O6DDGDQ\0HPEHU,(((DQG0
;&21&/86,216 6DODPD )HOORZ ,((( ³2QOLQH WUDFNLQJ RI YROWDJH IOLFNHU XWLOL]LQJ

HQHUJ\ RSHUDWRU DQG +LOEHUW WUDQVIRUP´ ,((( 7UDQVDFWLRQ RQ SRZHU
7KH FODVV $ UHTXLUHPHQWV RI ,(&  DUH RQO\ GHOLYHU\9RO1ž$SULO
DFKLHYHGE\WKHLPSOHPHQWDWLRQRIDSRZHUIXOKDUGZDUHGXHWR >@ -RLQW:RUNLQJ*URXSRQ3RZHU4XDOLW\&LJUq&&,5('&&2
WKH UHTXLUHPHQWV IRU WKH DJJUHJDWLRQ RI PHDVXUHV PHWKRG DQG 8,( :* 7HVW 3URWRFRO IRU ,(& )OLFNHUPHWHU XVHG LQ 3RZHU 6\VWHP
WKHOHYHORIXQFHUWDLQW\QHHGHG 9ROWDJH0RQLWRULQJ'UDIW-XO\
7KH QHZ VWDQGDUG HGLWLRQ IRU IOLFNHU PHWHU GHVLJQ >@ 
LQFOXGHVHQRXJKUHVWULFWLRQVWRJXDUDQWHHLQDKLJKHUGHJUHHWKH 
FRPSDWLELOLW\ EHWZHHQ PHDVXUHV IURP GLIIHUHQW PDQXIDFWXUHUV
RUPRGHOVZKHQFRQQHFWHGWRVLJQDOVLQWKHILHOG
7KHUHVXOWVRIWKHHYDOXDWLRQRI34DFFRPSOLVKHGZLWK
WKH )OXNH $ ZLGHO\ VDWLVILHV WKH UHTXLUHPHQWV RI WKH ,(&
 >@ ,(&  >@ DQG WKH GLJLWDO IOLFNHU
PHWHUHYDOXDWLRQSURWRFRO>@