$#0(7+2'#2)#0($685,1*#)250$17#)5(48(1&,(6#$7#+,*+
)81'$0(17$/#)5(48(1&,(6
+DUWPXW#7UDXQP•OOHU
$QGHUV#(ULNVVRQ
'HSW1#RI#/LQJXLVWLFV
6WRFNKROP#8QLYHUVLW\
60439#<4#6WRFNKROP/#6ZHGHQ
'HSW1#RI#3KRQHWLFV
8PHn#8QLYHUVLW\
60<34#;:#8PHn/#6ZHGHQ
KDUWPXW#OLQJ1VX1VH
DQGHUVH#OLQJ1XPX1VH
$%675$&7
$FFXUDWH# PHDVXUHPHQW# RI# IRUPDQW# IUHTXHQFLHV# LV
LPSRUWDQW# LQ# PDQ\# VWXGLHV# RI# VSHHFK# SHUFHSWLRQ# DQG
SURGXFWLRQ1# (UURUV# LQ# IRUPDQW# IUHTXHQF\# HVWLPDWLRQ# E\
H\H/# XVLQJ# D# VSHFWURJUDP/# RU# DXWRPDWLFDOO\/# XVLQJ# OLQHDU
SUHGLFWLRQ/#KDYH#EHHQ#UHSRUWHG#WR#EH#DV#KLJK#DV#93#+]#DW
)3#?#633#+]1#7KLV#H[FHHGV#WKH#W\SLFDO#DXGLWRU\#GLIIHUHQFH
OLPHQV#+'/V,#IRU#IRUPDQW#IUHTXHQFLHV#DQG#LV#DOVR#JUHDWHU
WKDQ# VRPH# RI# WKH# YDULDWLRQ# WKDW# RQH# ZRXOG# OLNH# WR# VWXG\/
H1J1/# WKH# DFRXVWLF# HIIHFWV# RI# YDU\LQJ# YRFDO# HIIRUW1# 7KH
SUREOHP#EHFRPHV#VXEVWDQWLDOO\#ZRUVH#ZKHQ#)3#LV#DV#KLJK
DV#833#WR#933#+]/#ZKLFK#LV#QRW#XQFRPPRQ#LQ#WKH#VSHHFK
RI# ZRPHQ# DQG# FKLOGUHQ# DW# KLJK# YRFDO# HIIRUWV1# ,Q
FRPSDULVRQ# ZLWK# RUGLQDU\# OLQHDU# SUHGLFWLYH# DQDO\VLV/# WKH
PHWKRG# GHVFULEHG# KHUH# GUDVWLFDOO\# UHGXFHV# PHDVXUHPHQW
HUURUV/# JLYHQ# WKDW# WKH# IRUPDQW# IUHTXHQF\# LV# QRW# EHORZ# RU
RQO\#VOLJKWO\#DERYH# )3# +ZKLFK# UDUHO\# KDSSHQV# LQ# VSHHFK,1
,W# WKXV# EHFRPHV# SRVVLEOH# WR# VWXG\# IRUPDQW# IUHTXHQF\
YDULDWLRQ# LQ# VSHHFK# PDWHULDO# WKDW# KLWKHUWR# FRXOG# QRW# EH
DQDO\VHG# PHDQLQJIXOO\# VLQFH# WKH# HIIHFWV# RI# LQWHUHVW# ZHUH
QR#ODUJHU#WKDQ#WKH#SUREDEOH#HUURUV#LQ#PHDVXUHPHQW1
41#,1752'8&7,21
0HDVXULQJ# IRUPDQW# IUHTXHQFLHV# LQ# VSHHFK# LV# WHFKQLFDOO\
SUREOHPDWLF1#$W#WKH#ORZ# IXQGDPHQWDO# IUHTXHQF\# +)3,# WKDW
LV# W\SLFDO# RI# PDOH# VSHHFK# SURGXFHG# DW# PRGHUDWH# YRFDO
HIIRUW/# WKH# SUREOHP# LV# OHVV# VHYHUH/# EXW# LW# LQFUHDVHV# YHU\
QRWLFHDEO\# ZLWK# LQFUHDVLQJ# )31# 7KLV# KROGV# QRW# RQO\# IRU
PHWKRGV# EDVHG# RQ# LQVSHFWLRQ# RI# VSHFWURJUDPV/# EXW# DOVR
IRU#DXWRPDWLF#PHWKRGV#EDVHG#RQ#OLQHDU#SUHGLFWLRQ#+/3,1
$WDO#)#6FKURHGHU#>4@#DQDO\VHG#WKH#HUURUV#REWDLQHG#E\#/31
7KH\#VKRZHG#IRUPDQW#IUHTXHQF\#HVWLPDWHV#WR#EH#DIIHFWHG
E\# D# ELDV# WRZDUGV# WKH# SDUWLDO# FORVHVW# WR# WKH# FHQWUH
IUHTXHQF\# RI# WKH# IRUPDQW/# DQG# WKH# HVWLPDWHG# EDQGZLGWKV
WR#EH#WRR#ORZ#ZKHQ#WKH#IRUPDQW#ZDV#FORVH#WR#D#SDUWLDO#DQG
WRR#KLJK#ZKHQ#LW#ZDV#LQ#WKH#PLGGOH#EHWZHHQ#WZR#SDUWLDOV1
7KHVH# V\VWHPDWLF# HUURUV# LQFUHDVH# ZLWK# )32%/# ZKHUH# %# LV
WKH# EDQGZLGWK# RI# WKH# IRUPDQW1# ,URQLFDOO\/# WKHVH# NLQGV# RI
HUURUV#DUH#DEVHQW#LQ#XQYRLFHG#VHJPHQWV#DQG#LQ#ZKLVSHUHG
VSHHFK/# ZKHUH# WKH# VLJQDO# SUHGLFWLRQ# HUURU# WHQGV# WR# EH
ODUJHVW#+LQ#UHODWLYH#WHUPV,1
0RQVHQ#)#(QJHEUHWVRQ#>5@#FRPSDUHG#IRUPDQW#IUHTXHQF\
PHDVXUHPHQWV# REWDLQHG# E\# /3# ZLWK# PHDVXUHPHQWV# E\
LQVSHFWLRQ# RI# VSHFWURJUDPV1# 8VLQJ# /3&/# WKH\# REWDLQHG
HUURUV#XS#WR#DERXW#“93#+]#IRU#)4/#)5#DQG#)6#DW#)3#?# 633
+]1# )RU# )4# DQG# )5/# VLPLODU# HUURUV# ZHUH# REWDLQHG# LQ
PHDVXUHPHQWV# PDGH# IURP# VSHFWURJUDPV1# )RU# )6/# WKH
UHVXOWV#REWDLQHG#E\#/3&#ZHUH#FOHDUO\#PRUH#DFFXUDWH#WKDQ
WKRVH#REWDLQHG#IURP#VSHFWURJUDPV1
:RRG# >6@# FRPSDUHG# VSHFWURJUDP# DQG# /3# PHDVXUHPHQWV
RI# IRUPDQWV# LQ# QDWXUDOO\# SURGXFHG# %XOJDULDQ# ZRUGV1
$VVXPLQJ# 0RQVHQ# )# (QJHEUHWVRQ¶V# >5@# UHVXOWV# WR# EH
TXDOLWDWLYHO\# FRUUHFW/# :RRG# HVWLPDWHG# DYHUDJH
LPSURYHPHQWV#LQ#PHDVXUHPHQW#DFFXUDF\/#XVLQJ#/3/#WR#EH
67#+]#DQG#59#+]#IRU#)4#LQ#VWUHVVHG#DQG#XQVWUHVVHG#YRZHOV
UHVSHFWLYHO\1# 7KH# FRUUHVSRQGLQJ# HVWLPDWHV# IRU# )5# ZHUH# <
+]#DQG#54#+]1
0LOOHU# HW# DO1# >8@# WHVWHG# DFFXUDF\# DQG# UHOLDELOLW\# RI
WHFKQLTXHV# IRU# DFRXVWLF# DQDO\VLV# RI# LQIDQW# VSHHFK/# XVLQJ
97# V\QWKHVLVHG# WRNHQV# FRYHULQJ# WKH# UDQJH# RI# DFRXVWLF
YDULDWLRQ# HQFRXQWHUHG# LQ# QDWXUDO# VSHHFK1# 7KUHH# WUDLQHG
SKRQHWLFLDQV#PHDVXUHG#WKH#IUHTXHQFLHV#RI#)4/#)5/#DQG#)6#DW
VLJQDO# RQVHW/# PLGSRLQW# DQG# RIIVHW/# HVVHQWLDOO\# E\
LQVSHFWLRQ# RI# ))70VSHFWUD1# $W# KLJK# )3V/# WKLV# PHWKRG
SURYLGHG# D# KLJKHU# DFFXUDF\# DQG# UHOLDELOLW\# IRU
PHDVXUHPHQWV# RI# )4# DQG# )5/# ZKHQ# FRPSDUHG# ZLWK# ERWK
/3&0EDVHG#DQG#VSHFWURJUDP#EDVHG#PHDVXUHPHQWV1
6PLWV#>8@#LQYHVWLJDWHG#WKH#SHUIRUPDQFH#RI#VSHFWURJUDSKLF
DQG#/3#WHFKQLTXHV#LQ#PHDVXULQJ#IRUPDQW#IUHTXHQFLHV#DQG
WUDQVLWLRQ# UDWHV# LQ# KLJKO\# G\QDPLF# VSHHFK# ZLWK# VSHFLDO
UHJDUG# WR# WKH# DVVXPSWLRQ# RI# TXDVLVWDWLRQDULW\# WKDW# LV
LQKHUHQW# LQ# VRPH# RI# WKHVH# WHFKQLTXHV1# +H# VKRZHG# WKDW
ZLGH# EDQG# VSHFWURJUDPV# DQG# /3# XVLQJ# DQ# DQDO\VLV
ZLQGRZ#ZKRVH#HIIHFWLYH#OHQJWK#LV#HTXDO#WR#D#JORWWDO#SHULRG
DUH# EHVW# VXLWHG# IRU# WKH# DFFXUDWH# PHDVXUHPHQW# RI# IRUPDQW
WUDQVLWLRQV1# :KHQ# WKH# DQDO\VLV# ZLQGRZ# LQFOXGHG# VHYHUDO
JORWWDO#SHULRGV/#WKHUH#ZDV#D#WHQGHQF\#IRU#PRYLQJ#IRUPDQWV
WR# EH# UHSUHVHQWHG# E\# VHYHUDO# VLPXOWDQHRXV# UHVRQDQFHV/
HDFK#RULJLQDWLQJ#LQ#D#GLIIHUHQW#RQH#RI#WKH#JORWWDO#SHULRGV1
+XPDQ# DXGLWRU\# GLIIHUHQFH# OLPHQV# +'/V,# IRU# IRUPDQW
IUHTXHQF\# ZHUH# LQYHVWLJDWHG# E\# )ODQDJDQ# >9@/# ZKR
REWDLQHG# DQ# DYHUDJH# RI# 61<(# IRU# )4# DQG# )51# 1RUG# )
6YHQWHOLXV# >:@# REWDLQHG# 616(# ZLWK# VLPLODU# VWLPXOL
V\QWKHVLVHG#DW#DQ#)3#RI#453#+]1#0HUPHOVWHLQ#>;@#REWDLQHG
'/V#IRU#LVRODWHG#YRZHOV#ZLWK#VWDWLRQDU\#IRUPDQWV#DQG#DQ
)3#RI#453#+]#RI#47(#IRU#)4#DQG#:(#IRU#)51#)RU#YRZHOV#LQ
D#&9&#FRQWH[WV/#ODJHU#'/V#ZHUH#REWDLQHG#IRU#)51
7KH# '/V# REVHUYHG# ZLWK# VWDWLRQDU\# IRUPDQWV# LQ# DOO# WKHVH
VWXGLHV# ZHUH# RI# WKH# VDPH# RUGHU# RU# VPDOOHU# WKDQ# WKH
PHDVXUHPHQW# HUURUV# UHSRUWHG# LQ# WKH# VWXGLHV# RQ
PHDVXUHPHQW# DFFXUDF\# PHQWLRQHG# DERYH1# ,W# LV# WKHUHIRUH
GHVLUDEOH#WR#EH#DEOH#WR#PHDVXUH#IRUPDQW#IUHTXHQFLHV#ZLWK
JUHDWHU# DFFXUDF\# HYHQ# DW# WKH# H[WUHPHO\# ORZ# )3# WKDW# LV
W\SLFDO#RI#DGXOW#PDOH#VSHHFK#SURGXFHG#DW#ORZ#WR#PRGHUDWH
YRFDO# HIIRUW1# :LWK# DQ\# WUDGLWLRQDO# PHWKRG# RI
PHDVXUHPHQW/#WKH#DFFXUDF\#GHWHULRUDWHV#FRQVLGHUDEO\#ZLWK
LQFUHDVLQJ# )31# :H# ZRXOG# H[SHFW# WKH# DXGLWRU\# IRUPDQW
IUHTXHQF\#'/V#WR#LQFUHDVH#ZLWK#)3#DV#ZHOO/#EXW#ZH#DUH#QRW
DZDUH#RI#DQ\#LQYHVWLJDWLRQ#RI#VXFK#'/V#DW#KLJKHU#)3V1
,Q# D# VWXG\# RI# WKH# DFRXVWLF# HIIHFWV# RI# YDULDWLRQV# LQ# YRFDO
HIIRUW#><@/#WKH#DXWKRUV#RI#WKH#SUHVHQW#VWXG\#IRXQG#WKDW#)3V
DERYH# 833# +]# ZHUH# QRW# XQFRPPRQ# LQ# WKH# VSHHFK# RI
ZRPHQ#DQG#FKLOGUHQ#DW#KLJK#YRFDO#HIIRUWV1#:KHQ#VSHDNHUV
GLUHFWHG#WKHLU#VSHHFK#WR#D#SHUVRQ#4<3#P#DZD\#LQ#DQ#RSHQ
ILHOG/# WKH# DYHUDJH# )3# DQG# LWV# VWDQGDUG# GHYLDWLRQ# LQ# D# <0
ZRUG#XWWHUDQFH#ZDV#59:“67#+]#IRU#PHQ/#74:“;6# +]# IRU
ZRPHQ/#DQG#845“<:#+]#IRU#:0\HDU#ROGV1#7KLV#LV#DERYH#WKH
UDQJH# ORRNHG# DW# E\# 0RQVHQ# )# (QJHEUHWVRQ# >5@# DQG# E\
0LOOHU#HW#DO1#>7@1
7KH#IRUPDQW#IUHTXHQFLHV#KDYH#EHHQ#UHSRUWHG#WR#UDLVH#ZLWK
LQFUHDVLQJ#YRFDO#HIIRUW#+>43@>#>44@#IRU#UHIHUHQFHV,/#EXW#WKH
XQFHUWDLQW\#LQ#WKH#PHDVXUHPHQWV#DSSHDUV#WR#LQFUHDVH#ZLWK
)3#HYHQ#PRUH#WKDQ#WKH#IRUPDQW#IUHTXHQFLHV1#$OWKRXJK#WKH
PHWKRG# GHVFULEHG# E\# 0LOOHU# HW# DO1# >7@# DFKLHYHV# VRPH
LPSURYHPHQW/#LWV#DSSOLFDWLRQ#LV#TXLWH#WLPH#FRQVXPLQJ#DQG
QRW# VXIILFLHQW1# :H# ZRXOG/# WKHUHIRUH/# UDWKHU# KDYH# DQ
DXWRPDWLF#PHWKRG#E\#ZKLFK#IRUPDQW#IUHTXHQFLHV#FRXOG#EH
PHDVXUHG# ZLWK# VXEVWDQWLDOO\# LQFUHDVHG# DFFXUDF\1# /LQHDU
SUHGLFWLRQ# LV# VXFK# D# PHWKRG# DQG# WR# WKH# H[WHQW# WKDW# WKH
HUURUV# LW# OHDGV# WR# DUH# SUHGLFWDEOH/# WKH\# FDQ# FHUWDLQO\# EH
DYRLGHG1#7KH#PHWKRG#GHVFULEHG#LQ#WKH#IROORZLQJ#DFKLHYHV
PRUH#WKDQ#WKLV1
51#0(7+2'
7KH# PHWKRG# GHYHORSHG# LQ# RUGHU# WR# VROYH# WKH# SUREOHP
LQYROYHG# DQ# DQDO\VLV# E\# V\QWKHVLV# SURFHGXUH# EDVHG# RQ
OLQHDU#SUHGLFWLYH#FRGLQJ#+/3&,1#7KH#EDVLF#LGHD#ZDV#WKDW#D
V\QWKHWLF#VLJQDO# VKRXOG# EH# IRXQG# WKDW# SURGXFHV# WKH# VDPH
UHVXOW#DV#WKH#QDWXUDO#VLJQDO#ZKHQ#VXEMHFWHG#WR#/3#DQDO\VLV1
,W# FDQ# WKHQ# EH# DVVXPHG# WKDW# WKH# V\QWKHWLF# VLJQDO/# WKH
YDOXHV# RI# ZKRVH# DFRXVWLF# SDUDPHWHUV# DUH# NQRZQ/# LV# YHU\
VLPLODU# WR# WKH# QDWXUDO# VLJQDO1# ,Q# JHQHUDWLQJ# WKLV# V\QWKHWLF
VLJQDO/# WKH# LQYHUVH# RI# WKH# /3# DQDO\VLV# SURFHGXUH# LV# WR# EH
XVHG1#7KLV#DOVR#LQYROYHV#WKH#XVH#RI#WKH#W\SH#RI#H[FLWDWLRQ
DVVXPHG#E\#WKH#PHWKRG1
7KH#SURFHGXUH#LQYROYHV#WKH#IROORZLQJ#VWHSV=
+4,##/3# DQDO\VLV# RI# D# QDWXUDO# VSHHFK# VLJQDO/# LQFOXGLQJ# DQ
HVWLPDWLRQ#RI#IRUPDQW#IUHTXHQFLHV#DQG#EDQGZLGWKV1
+5,##6\QWKHVLV# RI# D# VLJQDO# EDVHG# RQ# WKH# DQDO\VLV# UHVXOW# RI
VWHS#+4,/#XVLQJ#VSLNH#H[FLWDWLRQ1
+6,##/3# DQDO\VLV# RI# WKH# V\QWKHWLF# VLJQDO# +5,/# LQFOXGLQJ# DQ
HVWLPDWLRQ# RI# IRUPDQW# IUHTXHQFLHV# DQG# EDQGZLGWKV/
ZLWK#DOO#VHWWLQJV#IRU#WKH#/3#DQDO\VLV#EHLQJ#WKH#VDPH#DV
LQ#VWHS#+4,1
+7,##)RU#HDFK#IRUPDQW#IUHTXHQF\#DQG#EDQGZLGWK#WKDW#VKDOO
EH# FRUUHFWHG/# FDOFXODWLRQ# RI# WKH# HUURU# UHVXOWLQJ# IURP
V\QWKHVLV#DQG#DQDO\VLV/#L1H1/#WKH#GHYLDWLRQ#RI#WKH#YDOXH
REWDLQHG#E\#DQDO\VLV#+6,#IURP#WKH#V\QWKHVLV#SDUDPHWHU
YDOXH/# ZKLFK# ZDV# WDNHQ# IURP# DQDO\VLV# +4,1# 7KH
ZRUNLQJ# K\SRWKHVLV# LV# WKDW# WKH# XQNQRZQ# HUURUV/
LQKHUHQW#LQ#WKH#RULJLQDO#DQDO\VLV#DUH#VLPLODU#LQ#SRODULW\
DQG#PDJQLWXGH#WR#WKHVH1
+8,##7KH#HUURU#REWDLQHG#LQ#+7,#LV#VXEVHTXHQWO\#WDNHQ#DV#DQ
HVWLPDWH#RI#WKH#HUURU#LQ#WKH#RULJLQDO#DQDO\VLV#+4,#DQG#LW
KDV# WR# EH# GHFLGHG# KRZ# WKH# YDOXHV# RI# WKH# V\QWKHVLV
SDUDPHWHUV# VKRXOG# EH# PRGLILHG# LQ# RUGHU# WR# PLQLPLVH
WKLV#HUURU1#$#URXJK#JXHVV#LV#EDVHG#RQ# WKH# DVVXPSWLRQ
WKDW# D# IRUPDQW# IUHTXHQF\# HUURU# RI# .Q# +]# FDQ# EH
FRPSHQVDWHG# E\# PRGLI\LQJ# WKH# IUHTXHQF\# RI# WKDW
IRUPDQW#E\#±Q#+]#LQ#WKH#V\QWKHVLV1#+RZHYHU/#LQ#RUGHU
IRU# WKH# SURFHGXUH# WR# FRQYHUJH# PRUH# UDSLGO\/# D# PRUH
DFFXUDWH#FDOFXODWLRQ#RI#WKH#QHFHVVDU\#FRPSHQVDWLRQ#LV
XVHG/#DV#GHWDLOHG#EHORZ1#$V#IRU#IRUPDQW#EDQGZLGWK/#LW
LV# DVVXPHG# WKDW# D# FKDQJH# E\# D# IDFWRU# RI# Q# FDQ# EH
URXJKO\#FRPSHQVDWHG#E\# PRGLI\LQJ# WKH# EDQGZLGWK# LQ
WKH#V\QWKHVLV#E\#D#IDFWRU#RI#42Q1
+9,##6\QWKHVLV# RI# D# VLJQDO# EDVHG# RQ# WKH# DQDO\VLV# UHVXOW# RI
VWHS#+4,/#EXW#QRZ#ZLWK#FRPSHQVDWLRQ#DFFRUGLQJ#WR#VWHS
+8,# LQ# WKH# YDOXHV# RI# WKH# FHQWUH# IUHTXHQFLHV# DQG
EDQGZLGWKV#RI#WKH#IRUPDQWV1
+:,##5HSHWLWLRQ# RI# WKH# SURFHGXUH# +61119,# XQWLO# WKH# DQDO\VLV
UHVXOW#RI#WKH#V\QWKHWLF#VLJQDO#LV#VDWLVIDFWRULO\#VLPLODU#WR
WKDW#RI#WKH#QDWXUDO#VLJQDO1
7KH# UHODWLRQ# EHWZHHQ# WKH# PDJQLWXGH# RI# WKH# REVHUYHG
HUURUV#DQG#WKH#DPRXQW#E\#ZKLFK# WKH# IRUPDQW# IUHTXHQFLHV
KDYH#WR#EH#PRGLILHG#LQ#RUGHU#WR#FRPSHQVDWH#IRU#WKH#HUURUV
LV/#LQFRQYHQLHQWO\/#IDU#IURP#OLQHDU#ZKHQ#)3#LV# ODUJHU# WKDQ
WKH#EDQGZLGWK#RI#WKH#IRUPDQW#LQ#TXHVWLRQ1#7KHUHIRUH/#WKH
DFWLRQV# GHVFULEHG# LQ# VWHS# +8,# ZRXOG# LQ# FHUWDLQ# FDVHV# EH
TXLWH# LQHIILFLHQW/# DQG# WKH# SURFHVV# ZRXOG# UHTXLUH# PDQ\
UHSHWLWLRQV#WR#FRQYHUJH1
7KLV# KDV# EHHQ# LPSURYHG# VXEVWDQWLDOO\# E\# HPSOR\LQJ# D
PRUH#DFFXUDWH#HVWLPDWH#RI#WKH#QHFHVVDU\#FRPSHQVDWLRQ#IRU
IRUPDQW# IUHTXHQF\# HUURUV1# ,W# LQYROYHV# D# ZHLJKWLQJ# RI# WKH
IRUPDQW#IUHTXHQF\#FRUUHFWLRQ#DV#D#IXQFWLRQ#RI#WKH#FKDQJH
LQ#WKH#EDQGZLGWK#RI#WKH#IRUPDQW1#,Q#WKH#ILUVW#ORRS/#WKH#QHZ
IRUPDQW#IUHTXHQFLHV#DUH#FDOFXODWHG#DV
)%# #)#±#+#)*#±#)#,#%2%*/
ZKHUH# )# DQG# %# DUH# WKH# RULJLQDO# YDOXHV# +4,/# )*# DQG# %*# WKH
YDOXHV#REWDLQHG#LQ#VWHS#+6,#DQG#)%#WKH#YDOXH#XVHG#LQ#VWHS
+9,1# ,Q# WKLV# ZD\/# WKH# IRUPDQW# IUHTXHQF\# YDOXHV# REWDLQHG
DIWHU# WKH# ILUVW# ORRS# DUH# DOUHDG\# TXLWH# FORVH# WR# WKH# ILQDO
YDOXHV1# &RQYHUJHQFH# LV# VSHHGHG# XS# E\# PXOWLSO\LQJ# WKH
)LJXUH#41#7KH#OHIW#SDQHO#VKRZV#WKH#UHVXOW#RI#DQ#/3#DQDO\VLV#RI#D#V\QWKHWLF#VLJQDO#+)3# #653#+],#DQG#LWV#V\QWKHVLV#SDUDPHWHUV/#%4# #433
+]/#)4# #533#111#4533#111#533#+]#+GRWWHG#OLQHV,1#7KH#PLGGOH#SDQHO#VKRZV#WKH#UHVXOWV#DIWHU#WKH#ILUVW#FRUUHFWLRQ#DQG#WKH#ULJKWPRVW#SDQHO
DIWHU#VL[#LWHUDWLRQV1
HUURU# WHUPV# E\# D# IDFWRU# !# 4# ZKHQ# WKH# HUURUV# LQ# WZR
VXEVHTXHQW#ORRSV#KDYH#WKH#VDPH#SRODULW\1#,I#WKLV#LV#QRW#WKH
FDVH# D# IDFWRU# ?# 4# LV# XVHG# WR# SUHYHQW# RVFLOODWLRQV# ZKLFK
PD\#GHOD\#RU#EORFN#FRQYHUJHQFH1
6LQFH# WKH# PDLQ# REMHFWLYH# ZDV# REWDLQLQJ# PRUH# DFFXUDWH
YDOXHV# RI# WKH# IRUPDQW# IUHTXHQFLHV/# QR# HIIRUW# KDV# EHHQ
PDGH#WR#RSWLPLVH#WKH#EDQGZLGWK#HVWLPDWLRQ1#+RZHYHU/#DW
YHU\# KLJK# )3V/# WKH# RULJLQDO# EDQGZLGWK# YDOXHV# WHQG# WR# EH
GUDVWLFDOO\#WRR#ORZ#+%#?#43#+],#ZKHQ#WKH#IRUPDQW#LV#FORVH
WR# D# SDUWLDO1# ,Q# RUGHU# WR# DYRLG# VXFK# XQUHDOLVWLFDOO\# VPDOO
YDOXHV/#D#OLPLWDWLRQ#RI#WKH#W\SH
%*# #+#%5#.#735#,425
KDV#EHHQ#LQWURGXFHG#LQ#WKH#LQLWLDO#ORRS1
,Q# SULQFLSOH/# WKH# PHWKRG# DOORZV# FRUUHFWLRQ# RI# DQ\# HUURUV
WKDW#FRQVHUYH#WKHLU#SRODULW\#DQG#DUH#DPSOLILHG#E\#LWHUDWLYH
/3&/# DOWKRXJK# WKH# PHWKRG# LV# VXEMHFW# WR# WKH# OLPLWDWLRQV
JLYHQ# E\# WKH# QRW# TXLWH# UHDOLVWLF# DVVXPSWLRQV# RI# D# VSLNH0
VKDSHG# H[FLWDWLRQ# SXOVH# IRU# HDFK# JORWWDO# SHULRG# DQG# WKH
DEVHQFH#RI#VSHFWUDO#]HURV/#ZKLFK#DUH#LQKHUHQW#LQ#WKH#EDVLF
W\SH#RI#/3&1
61#7(67#5(68/76#$1'#',6&866,21
7KH#PHWKRG#ZDV#WHVWHG#ZLWK#YDULRXV#V\QWKHWLF#VLJQDOV#WKDW
ZHUH# JHQHUDWHG# XVLQJ# /3&# WHFKQLTXH# LQFOXGLQJ# RQH# ZLWK
)3# #653#+]#DQG#D#ILUVW#IRUPDQW#WKDW#YDULHG#EHWZHHQ#533
DQG# 4533# +]1# 6HFRQG# DQG# KLJKHU# IRUPDQWV# ZHUH# NHSW
FRQVWDQW# DW# 4983/# 5:83/# 6;83# +]# HWF1# 7KH# VLJQDO# ZDV
VDPSOHG# DW# 49# N+]# ZLWK# 49# ELW2VDPSOH1# $# +DPPLQJ
ZLQGRZ# ZLWK# D# OHQJWK# RI# 53#PV# ZDV# XVHG# DQG# WKLV# ZDV
PRYHG# IRUZDUG# LQ# VWHSV# RI# 8#PV1# 7KLV# WHVW# VLJQDO
LOOXVWUDWHV# VHYHUDO# FUXFLDO# SRLQWV/# KLJK# IXQGDPHQWDO
IUHTXHQF\/# IRUPDQW# IUHTXHQFLHV# DW# RU# EHORZ# WKH
IXQGDPHQWDO/#DQG#D#UDSLGO\#FKDQJLQJ#ILUVW#IRUPDQW1
7KH# )4# YDOXHV# XVHG# LQ# WKH# V\QWKHVLV/# WKH# UHVXOW# RI# WKH
LQLWLDO# /3# DQDO\VLV/# DQG# WKDW# DIWHU# WKH# ILUVW# DQG# WKH# VL[WK
FRUUHFWLRQ# ORRSV# DUH# VKRZQ# LQ# )LJXUH# 41# 7KH# VHFRQG
IRUPDQW# ZDV# DOVR# VXEMHFW# WR# FRUUHFWLRQ/# EXW# WKLV# LV# QRW
VKRZQ# LQ# WKH# ILJXUH/# VLQFH# WKH# FRUUHFWLRQ# UHTXLUHG# ZDV
PXFK#VPDOOHU#DQG#QRW#DV#WHOOLQJ#DV#WKDW#LQ#)41
,W# FDQ# EH# VHHQ# WKDW# WKH# DFFXUDF\# LQ# IRUPDQW# IUHTXHQF\
HVWLPDWLRQ#LV#LQFUHDVHG#VXEVWDQWLDOO\#DOUHDG\#DIWHU#WKH#ILUVW
ORRS# RI# WKH# SURFHGXUH/# ZKLOH# WKH# VXEVHTXHQW
LPSURYHPHQWV# DUH# VPDOOHU1# 7KH# EDQGZLGWK# HVWLPDWHV# GR
QRW#LPSURYH#VR#IDVW1# ,W# FDQ# DOVR# EH# VHHQ# WKDW# WKH# PHWKRG
IDLOV# ZKHQ# WKH# IRUPDQW# IUHTXHQF\# LV# EHORZ# RU# VOLJKWO\
DERYH#WKH#ILUVW#SDUWLDO1#$W#KLJKHU#)3V/#WKH#PHWKRG#EHFRPHV
LQFUHDVLQJO\# VHQVLWLYH# WR# VPDOO# IOXFWXDWLRQV# LQ# WKH
DPSOLWXGH# RI# SDUWLDOV# IRU# IRUPDQWV# WKDW# DUH# IDU# IURP# WKH
FORVHVW#RQH1
)LJXUH#4#LOOXVWUDWHV#WZR#RI#WKH#SUREOHPV#ZLWK#WKLV#PHWKRG1
4,# 2QH# RI# WKHVH# LV# WKH# QHFHVVLW\# WR# NHHS# WKH# YDULRXV
V\QWKHWLF# YHUVLRQV# SUHFLVHO\# LQ# V\QFKURQ\# ZLWK# WKH
RULJLQDO# VLJQDO1# )DLOXUH# WR# GR# VR# ZLOO# UHVXOW# LQ# VXE0
RSWLPDO# IXQFWLRQLQJ# ZKHUH# WKH# IRUPDQW# LV# PRYLQJ1# ,Q
)LJXUH# 4/# WKH# UHVXOW# DIWHU# WKH# ILUVW# FRUUHFWLRQ# VKRZV
VRPH# FOHDU# VLJQV# RI# DV\QFKURQ\1# :KHUH# )4# ZDV
PRYLQJ# XS# LQ# IUHTXHQF\/# WKLV# DFFLGHQWDOO\# LPSURYHG
WKH# IUHTXHQF\# FRUUHFWLRQ/# ZKLOH# WKH# RSSRVLWH# HIIHFW
FDQ# EH# REVHUYHG/# ZKHUH# )4# ZDV# PRYLQJ# GRZQ1# 7KH
DV\QFKURQ\# DOVR# FDXVHG# VRPH# LQHIILFLHQF\# RI# WKH
EDQGZLGWK#FRUUHFWLRQ1
5,# 7KH#RWKHU#SUREOHP#RFFXUV#ZKHQ#)4#LV#YHU\#FORVH#WR#RU
EHORZ#)31#,Q#WKLV#VLWXDWLRQ/#WKH#PHWKRG#ZRUNV#OHVV#ZHOO
RU# IDLOV/# VLQFH# WKH# EDVLF# ZRUNLQJ# K\SRWKHVLV# GRHV# QRW
QHFHVVDULO\# KROG1# 7KLV# NLQG# RI# HUURU# LV# GXH# WR# WKH
DEVHQFH# RI# VSHFWUDO# FRPSRQHQWV# EHORZ# WKH# ILUVW
SDUWLDO/# ZKLFK# OHDGV# WR# DQ# RYHUHVWLPDWLRQ# RI# WKH
IRUPDQW#IUHTXHQF\1#$IWHU#WKH#VL[WK#µFRUUHFWLRQ¶/#LQ#WKLV
H[DPSOH/#WKH#YDOXH#RI#%4#DSSURDFKHV#]HUR#ZKHQ#)4#LV
MXVW#DERYH# )31# ,W# FDQ/# KRZHYHU/# DOVR# EH# VHHQ# WKDW# WKLV
GLG# QRW# KDSSHQ# WRZDUGV# WKH# HQG# RI# WKH# VLJQDO/# ZKHUH
)4#FURVVHV#)3#LQ#WKH#RWKHU#GLUHFWLRQ1
$# IXUWKHU# SUREOHP# LV# WKH# ULVN# WKDW# WKH# DVVRFLDWLRQ# RI
UHIOHFWLRQ# FRHIILFLHQWV# DQG# IRUPDQWV# PLJKW# FKDQJH
EHWZHHQ# VXEVHTXHQW# DQDO\VHV1# 7KLV# FDQ# EH# PDGH# OHVV
OLNHO\# WR# KDSSHQ# E\# OHDYLQJ# WKH# IRUPDQWV# ZLWK# D# PRUH
IDYRUDEOH# YDOXH# RI# )32%# +DERYH# )5# RU# )6,# ZLWKRXW
FRUUHFWLRQ1
$W# WKH# MXQFWXUH# EHWZHHQ# YRLFHG# DQG# YRLFHOHVV# VHJPHQWV
DQG# DW# SODFHV# ZLWK# YHU\# UDSLG# IRUPDQW# WUDQVLWLRQV/# WKH
SURFHGXUH# LV# QRW# µZHOO# EHKDYHG¶# GXH# WR# VHYHUH# SUREOHPV
ZLWK# ERWK# V\QFKURQ\# DQG# IRUPDQW# DVVRFLDWLRQ1# 7KH
PHWKRG#GRHV#QRW#HLWKHU#VROYH#WKH#SUREOHP#FRQFHUQLQJ#WKH
WHQGHQF\# IRU# UDSLGO\# PRYLQJ# IRUPDQWV# WR# EH# UHSUHVHQWHG
E\# VHYHUDO# VLPXOWDQHRXV# UHVRQDQFHV# ZKHQ# WKH# DQDO\VLV
ZLQGRZ#LQFOXGHV#VHYHUDO#JORWWDO#SHULRGV#>8@1
$FFRUGLQJ# WR# +DUULV# +4<:;,/# WKH# UHODWLRQ# EHWZHHQ
IUHTXHQF\#UHVROXWLRQ#')/#GHILQHG#DV#WKH#09#G%#EDQGZLGWK/
DQG#WKH#WRWDO#OHQJWK#'#RI#D#+DQQLQJ#ZLQGRZ#LV# JLYHQ# E\
')#˜#'# # 51# 7KXV/# LI# ZH# ZDQW# WR# UHVROYH# LQGLYLGXDO
IRUPDQWV#DV#VHSDUDWH#VSHFWUDO#SHDNV#GRZQ#WR#D#GLVWDQFH#RI
433# +]# EHWZHHQ# WKHLU# FHQWUH# IUHTXHQFLHV/# ZH# QHHG# D
ZLQGRZ#OHQJWK#RI#DW#OHDVW#53#PV1
,Q# RUGHU# WR# DGHTXDWHO\# UHSUHVHQW# UDSLG# IRUPDQW
PRYHPHQWV/# '# VKRXOG# QRW# H[FHHG# 515# SLWFK# SHULRGV# >8@1
+RZHYHU/# LI# ZH# XVH# WKLV# FULWHULRQ/# WKH# ILUVW# PHQWLRQHG
UHTXLUHPHQW# LV# RQO\# VDWLVILHG# IRU# VSHHFK# DW# )3# ?# 443# +]/
IUHTXHQF\# UHVROXWLRQ# EHLQJ# OLPLWHG# WR# )324141# ,I# ZH# VNLS
WKH#UHTXLUHPHQW#WKDW#HDFK#IRUPDQW#VKRXOG#EH#UHSUHVHQWHG
E\#D#VHSDUDWH#SHDN#LQ#WKH#VSHFWUXP/#ZKLFK#LV#QRW#UHTXLUHG
E\#WKH#/3&#PHWKRG/#WKH#VLWXDWLRQ#LV#QRW#TXLWH#DV#KRSHOHVV/
VLQFH# D# VKRUWHU# WLPH# ZLQGRZ# FDQ# EH# XVHG1# 7KH# RSWLPXP
HIIHFWLYH#OHQJWK#RI#WKH#WLPH# ZLQGRZ# LV# SUREDEO\# FROVH# WR
RQH# SLWFK# SHULRG# +WKLV# FRUUHVSRQGV# WR# '# # 5# ZLWK# D
+DQQLQJ#ZLQGRZ,1
71#&21&/86,216
$W# SUHVHQW/# WKH# PHWKRG# ZRUNV# VDWLVIDFWRULO\# RQO\# ZLWK
IXOO\# YRLFHG# VOLFHV# RI# VSHHFK# WKDW# GR# QRW# LQFOXGH# DQ\
GUDVWLF# FKDQJHV# LQ# YRLFLQJ# DQG# IRUPDQW# IUHTXHQFLHV1# ,Q
VXFK# VOLFHV# RI# VSHHFK/# LW# LV# QRW# XQUHDOLVWLF# WR# H[SHFW# DQ
HUURU# UHGXFWLRQ# E\# D# IDFWRU# RI# WHQ# LQ# IRUPDQW# IUHTXHQF\
PHDVXUHPHQWV#ZLWKLQ#WKH#UDQJH#DERYH#418#)31
7KH# SUREOHPV# WKDW# VWLOO# UHPDLQ# ZLWK# V\QFKURQLVDWLRQ/
YRLFLQJ#RQVHWV#DQG#RIIVHWV/#DQG#UDSLG# IRUPDQW# WUDQVLWLRQV
FRXOG#DOO#EH#VROYHG#E\#DSSO\LQJ#WKH#PHWKRG#H[DFWO\#SHULRG
E\# SHULRG1# +RZHYHU/# WKLV# UHTXLUHV# D# UHOLDEOH# GHWHFWLRQ# RI
WKH#SLWFK#SHULRGV#SULRU#WR#WKH#DSSOLFDWLRQ#RI#WKH#SURFHGXUH
GHVFULEHG#KHUH1
81#5()(5(1&(6
>4@ %161# $WDO# )# 0151# 6FKURHGHU# +4<:7,# 5HFHQW
DGYDQFHV# LQ# SUHGLFWLYH# FRGLQJ# ±# DSSOLFDWLRQV# WR
VSHHFK# V\QWKHVLV/# 3UHSULQWV# RI# WKH# 6SHHFK
&RPPXQLFDWLRQ#6HPLQDU#6WRFNKROP#$XJ#4±6/#4<:7/
9RO1#5/#5:±641
>5@ 0RQVHQ/# 51%1# )# $101# (QJHEUHWVRQ1# +4<;6,# 7KH
$FFXUDF\# RI# IRUPDQW# IUHTXHQF\# PHDVXUHPHQWV=# $
FRPSDULVRQ# RI# VSHFWURJUDSKLF# DQDO\VLV# DQG# OLQHDU
SUHGLFWLRQ/#-1#6SHHFK#+HDU1#5HV1/#59/#;<±<:1
>6@ :RRG/# 61# +4<;<,# 7KH# SUHFLVLRQ# RI# IRUPDQW
IUHTXHQF\# PHDVXUHPHQW# IURP# VSHFWURJUDPV# DQG# E\
OLQHDU# SUHGLFWLRQ1# 67/04365/# 4<;<=4/# <4±<61# 'HS1
RI# 6SHHFK/# 0XVLF# DQG# +HDULQJ/# 5R\DO# ,QVW1# RI
7HFKQRORJ\/#6WRFNKROP1
>7@ 0LOOHU/#&1-1/#11#5RXVVHO/#51#'DQLORII#)#31#+RIIPDQ1
+4<<4,#(VWLPDWLRQ#RI#IRUPDQW#IUHTXHQF\#LQ#V\QWKHWLF
LQIDQW# &9# WRNHQV1# &OLQLFDO# /LQJXLVWLFV# DQG
3KRQHWLFV/#8/#5;6±5<91
>8@ 6PLWV/# 51# +4<<7,# $FFXUDF\# RI# TXDVLVWDWLRQDU\
DQDO\VLV#RI#KLJKO\#G\QDPLF#VSHHFK#VLJQDOV1#-1#$FRXVW1
6RF1#$P1/#<9/#6734±67481
>9@ )ODQDJDQ/# -1# +4<88,# $# 'LIIHUHQFH# OLPHQ# IRU# YRZHO
IRUPDQW# IUHTXHQF\1# -1# $FRXVW1# 6RF1# $P1/# 5:/# 946±
94:1
>:@ 1RUG/# /1# )# (1# 6YHQWHOLXV1# +4<:<,# $QDO\VLV# DQG
SUHGLFWLRQ# RI# GLIIHUHQFH# OLPHQ# GDWD# IRU# IRUPDQW
IUHTXHQFLHV1# 3(5,/86/# 5HSRUW# ,/# 57±6:1# 'HS1# RI
/LQJXLVWLFV/#6WRFNKROP#8QLYHUVLW\1
>;@ 0HUPHOVWHLQ/# 31# +4<:;,# 'LIIHUHQFH# OLPHQV# IRU
IRUPDQW# IUHTXHQFLHV# RI# VWHDG\0VWDWH# DQG# FRQVRQDQW0
ERXQG#YRZHOV1#-1#$FRXVW1#6RF1#$P1/#96/#8:5±8;31
><@ $QGHUVVRQ/# $1/# $1# (ULNVVRQ# )# +1# 7UDXQP•OOHU1
+4<<9,# &ULHV# DQG# ZKLVSHUV=# $FRXVWLF# HIIHFWV# RI
YDULDWLRQV# LQ# YRFDO# HIIRUW1# 70+04365/# 4<<9=5/
45:±4631# 'HS1# RI# 6SHHFK/# 0XVLF# DQG# +HDULQJ/
5R\DO#,QVW1#RI#7HFKQRORJ\/#6WRFNKROP1
>43@ 7UDXQP•OOHU/# +1# +4<<:,# 3HUFHSWLRQ# RI# VSHDNHU# VH[/
DJH/#DQG#YRFDO#HIIRUW1#,Q#3KRQXP/#7/#4;6±4;91#'HS1
RI#3KRQHWLFV/#8PHn#8QLYHUVLW\1
>44@ 7UDXQP•OOHU/#+1#+4<;;,# 3DUDOLQJXLVWLF# YDULDWLRQ# DQG
LQYDULDQFH# LQ# WKH# FKDUDFWHULVWLF# IUHTXHQFLHV# RI
YRZHOV/#3KRQHWLFD/#78/#4±5<1
>45@ +DUULV/# )1# -1# +4<:;,# 2Q# WKH# XVH# RI# ZLQGRZV# IRU
KDUPRQLF# DQDO\VLV# ZLWK# WKH# GLVFUHWH# )RXULHU
WUDQVIRUP1#3URF1#,(((/#99/#84±;61