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5 H D OL] H G / R V V H V
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IU H TX H Q W O\ ,Q W K H G D W D V H W  W K H P R V W D F W LYH   S H U F H Q W R I W K H W U D G H U V D F F R X Q W IR U   S H U F H Q W
R I D OO V W R F N W U D G H V  ,Q E R WK W LP H S H U LR G V D Q G IR U E R W K W K H IU H TX H Q W D Q G W K H LQ IU H TX H Q W
W U D G H U V  D V LJ Q Lp F D Q W O\ J U H D W H U S U R S R U W LR Q R I D OO S R V V LE OH J D LQ V W K D Q R I D OO S R V V LE OH OR V V H V
D U H U H D OL] H G W K U R X J K R X W W K H \H D U W J U H D W H U W K D Q    LQ D OO F D V H V  ,Q ' H F H P E H U  OR V V H V D U H
U H D OL] H G D W D K LJ K H U U D W H U H OD W LYH W R J D LQ V W K D Q G X U LQ J W K H U H V W R I W K H \H D U  LQ G LF D W LQ J W K D W
LQ YH V W R U V D U H U H D OL] LQ J W D [ OR V V H V LQ ' H F H P E H U  ' X H W R K R Z S R U W IR OLR V D U H U H F R Q V W U X F W H G R YH U
W LP H  D YH U D J H S R U W IR OLR V L] H V D U H OD U J H U IR U W K H OD W H U \H D U V R I W K H V D P S OH  3 *5 D Q G 3 / 5 D UH
W K H U H IR U H V P D OOH U IR U W K H V H F R Q G W H P S R U D O S D U W LW LR Q  MX V W D V W K H \ D U H V P D OOH U IR U W K H S D U W LW LR Q
R I IU H TX H Q W W U D G H U V 

2Q H U H D V R Q ZK \ LQ YH V W R U V P LJ K W F K R R V H W R V H OO ZLQ Q H U V U D W K H U W K D Q OR V H U V LV E H F D X V H W K H \
D Q W LF LS D W H D F K D Q J H LQ W K H W D [ OD Z X Q G H U ZK LF K F D S LW D O J D LQ V U D W H V ZLOO U LV H  7K H W D [ OD Z R I
    P D G H V X F K D F K D Q J H  ,I LQ YH V W R U V V R OG R o ZLQ Q H U V LQ D Q W LF LS D W LR Q R I K LJ K H U W D [ U D W H V 
W K H \ P LJ K W K D YH H Q W H U H G     ZLW K D OD U J H U S H U F H Q W D J H R I OR V H U V LQ W K H LU S R U W IR OLR W K D Q X V X D O
% H F D X V H V X F K V W R F NV D U H S X U F K D V H G S U LR U W R     W K H \ ZR X OG Q R W V K R Z X S LQ W K H S R U W IR OLR V
U H F R Q V W U X F W H G K H U H  ,W LV S R V V LE OH W K H U H IR U H W K D W W K H U D W H D W ZK LF K ZLQ Q H U V D U H E H LQ J U H D OL] H G
U H OD W LYH W R OR V H U V LV OR ZH U LQ W K H LQ YH V W R U V W R W D O S R U W IR OLR W K D Q LQ W K H S D U W LD O U H F R Q V W U X F W H G
S R U W IR OLR V  $ V R OG V W R F NV D U H V R OG D Q G Q H Z R Q H V S X U F K D V H G W K H S D U W LD O S R U W IR OLR V E H F R P H
P R U H D Q G P R U H U H S U H V H Q W D W LYH R I W K H W R W D O S R U W IR OLR  : H ZR X OG H [S H F W LI D V H OOR o R I ZLQ Q H U V
LQ D Q W LF LS D W LR Q R I W K H     W D [ OD Z D oH F W V W K H R E V H U YH G U D W H D W ZK LF K J D LQ V D Q G OR V V H V D U H
U H D OL] H G LQ W K H S D U W LD O S R U W IR OLR V  W K D W H oH F W ZR X OG E H J U H D W H U LQ W K H p U V W S D U W R I W K H V D P S OH
S H U LR G W K D Q LQ W K H OD V W S D U W  + R ZH YH U W K H U D W LR 3 *5  3 / 5 LV YLU W X D OO\ W K H V D P H IR U W K H
S H U LR G V     W R     D Q G     W R     

7D E OH ,,, U H S R U W V W K H D YH U D J H U H W X U Q V V LQ F H W K H G D \ R I S X U F K D V H IR U U H D OL] H G D Q G S D S H U ZLQ Q H U V

D Q G OR V H U V  ,Q ' H F H P E H U W K H OR V V H V W K D W D U H U H D OL] H G D U H R I P X F K J U H D W H U P D J Q LW X G H W K D Q
W K R V H U H D OL] H G W K U R X J K R X W W K H U H V W R I W K H \H D U  7K LV LV D G G LW LR Q D O H YLG H Q F H W K D W V R P H LQ YH V W R U V
G R H Q J D J H LQ W D [P R W LYD W H G V H OOLQ J LQ ' H F H P E H U 

/ D NR Q LV K R N D Q G 6 P LG W     V X J J H V W W K D W LQ YH V W R U V P LJ K W V H OO ZLQ Q H U V D Q G K R OG R Q W R OR V H U V
LQ D Q H oR U W W R U H E D OD Q F H W K H LU S R U W IR OLR V  : H H [S H F W W K D W LQ YH V W R U V ZK R D U H U H E D OD Q F LQ J ZLOO
V H OO D S R U W LR Q  E X W Q R W D OO R I W K H LU V K D U H V R I ZLQ Q LQ J V W R F NV  $ V D OH R I W K H H Q W LU H K R OG LQ J
R I D V W R F N LV P R V W OLNH O\ Q R W P R W LYD W H G E \ W K H G H V LU H W R U H E D OD Q F H  6 R W R H OLP LQ D W H W U D G H V

 
W K D W P D \ E H P R W LYD W H G E \ D G H V LU H W R U H E D OD Q F H  , F D OF X OD W H 3 *5 D Q G 3 / 5 X V LQ J R Q O\ V D OH V
W K D W D U H R I D Q D F F R X Q W V H Q W LU H S R V LW LR Q LQ D V W R F N D Q G X V LQ J S D S H U J D LQ V D Q G OR V V H V R Q W K H
G D \V R I W K R V H V D OH V  7K H U H P D \ E H V R P H F D V H V ZK H U H V K D U H V R I D V W R F N D U H D OU H D G \ LQ W K H
S R U W IR OLR E H IR U H     D Q G W K H Q D G G LW LR Q D O V K D U H V D U H S X U F K D V H G  )R U W K H V H  W K H V D OH R I D OO
V K D U H V S X U F K D V H G D IW H U     P D \ Q R W D P R X Q W W R W K H V D OH R I D OO V K D U H V K H OG  6 R W K LV U H P R YD O
R I V D OH V W K D W F R X OG E H P R W LYD W H G E \ G LYH U V Lp F D W LR Q LV Q R W S H U IH F W  ( YH Q V R LI W K H S U H IH U H Q F H
IR U V H OOLQ J ZLQ Q H U V LV G X H W R U H E D OD Q F LQ J  U H P R YLQ J P R V W U H E D OD Q F LQ J P R W LYD W H G W U D G H V ZLOO
J U H D W O\ U H G X F H W K H S U H IH U H Q F H IR U V H OOLQ J ZLQ Q H U V 

,Q 7D E OH ,9  IR U W K H H Q W LU H \H D U  ZK H Q S D U W LD O V D OH V D U H LJ Q R U H G W K H S U H IH U H Q F H IR U V H OOLQ J
ZLQ Q H U V U D W K H U W K D Q OR V H U V LV V X E V W D Q W LD OO\ X Q F K D Q J H G  7K H W H Q G H Q F \ W R V H OO ZLQ Q H U V D Q G
K R OG OR V H U V G R H V Q R W D S S H D U W R E H W K H U H V X OW R I U H E D OD Q F LQ J  : K H Q S D U W LD O V D OH V D U H LJ Q R U H G 
LQ YH V W R U V U H D OL] H OR V V H V LQ ' H F H P E H U D W H YH Q D K LJ K H U U D W H U H OD W LYH W R U H D OL] LQ J J D LQ V  3 H U K D S V
W K LV LV E H F D X V H LQ YH V W R U V ZK R D U H LQ W H Q W LR Q D OO\ U H D OL] LQ J W D [ OR V V H V F K R R V H W R V H OO W K H LU H Q W LU H
S R V LW LR Q LQ W K H OR V LQ J V W R F N

,Q YH V W R U V ZK R V H OO ZLQ Q H U V IR U W K H S X U S R V H R I U H E D OD Q F LQ J W K H LU S R U W IR OLR V D U H OLNH O\ W R P D NH

Q H Z S X U F K D V H V  ,Q D Q D OW H U Q D W LYH H oR U W W R H OLP LQ D W H W U D G H V W K D W P D \ E H P R W LYD W H G E \ D G H V LU H
W R U H E D OD Q F H  , F D OF X OD W H 3 *5 D Q G 3 / 5 X V LQ J R Q O\ V D OH V IR U ZK LF K W K H U H LV Q R Q H Z S X U F K D V H
LQ W R D S R U W IR OLR R Q W K H V D OH G D W H R U G X U LQ J W K H IR OOR ZLQ J W K U H H ZH H NV D Q G X V LQ J S D S H U J D LQ V
D Q G OR V V H V R Q W K H G D \V R I W K R V H V D OH V  7D E OH 9 U H S R U W V W K D W ZK H Q V D OH V P R W LYD W H G E \ D G H V LU H
W R U H E D OD Q F H D U H H OLP LQ D W H G LQ W K LV ZD \ LQ YH V W R U V F R Q W LQ X H W R S U H IH U W R V H OO ZLQ Q H U V  2Q F H
D J D LQ  LQ YH V W R U V U H D OL] H OR V V H V D W D K LJ K H U U D W H W K D Q J D LQ V LQ ' H F H P E H U 

$ Q R W K H U U H D V R Q ZK \ LQ YH V W R U V P LJ K W V H OO ZLQ Q H U V D Q G K R OG OR V H U V LV W K D W W K H \ H [S H F W W K H OR V H U V
W R R X W S H U IR U P W K H ZLQ Q H U V LQ W K H IX W X U H  $ Q LQ YH V W R U ZK R E X \V D V W R F N E H F D X V H R I ID YR U D E OH
LQ IR U P D W LR Q P D \ V H OO W K D W V W R F N ZK H Q LW J R H V X S E H F D X V H V K H E H OLH YH V K H U LQ IR U P D W LR Q LV Q R Z
U H q H F W H G LQ W K H S U LF H  2Q W K H R W K H U K D Q G  LI W K H V W R F N J R H V G R ZQ V K H P D \ F R Q W LQ X H W R K R OG LW 
E H OLH YLQ J W K D W W K H P D U NH W K D V Q R W \H W F R P H W R D S S U H F LD W H K H U LQ IR U P D W LR Q  ,Q YH V W R U V F R X OG
D OV R F K R R V H W R V H OO ZLQ Q H U V D Q G K R OG OR V H U V V LP S O\ E H F D X V H W K H \ E H OLH YH S U LF H V P H D Q U H YH U W  ,
W H V W ZK H W K H U V X F K E H OLH IV D U H MX V W Lp H G  H [S R V W 

7D E OH 9 , U H S R U W V H [F H V V U H W X U Q V IR U S H U LR G V IR OOR ZLQ J W K H V D OH R I D ZLQ Q LQ J V W R F N R U W K H

R E V H U YD W LR Q R I D S D S H U OR V V  7K U H H LQ YH V W P H Q W K R U L] R Q V D U H H [D P LQ H G    W U D G LQ J G D \V  ZK LF K

 
LV W K H D S S U R [LP D W H P H G LD Q LQ V D P S OH K R OG LQ J S H U LR G IR U V W R F NV     W U D G LQ J G D \V R Q H \H D U 
ZK LF K LV % H Q D U W ] L D Q G 7K D OH U V     H V W LP D W H R I W K H D YH U D J H LQ YH V W R U V LQ YH V W P H Q W K R U L] R Q 
D Q G    W U D G LQ J G D \V W ZR \H D U V ZK LF K LV K R Z R IW H Q  R Q D YH U D J H  1 H Z < R U N 6 W R F N ( [F K D Q J H
H TX LW LH V W X U Q H G R YH U G X U LQ J W K LV S H U LR G  5 H W X U Q V D U H F D OF X OD W H G LQ H [F H V V R I W K H &5 6 3 YD OX H 
ZH LJ K W H G LQ G H [ )R U ZLQ Q H U V W K D W D U H V R OG  W K H D YH U D J H H [F H V V U H W X U Q R YH U W K H IR OOR ZLQ J \H D U
LV   S H U F H Q W P R U H W K D Q LW LV IR U OR V H U V W K D W D U H Q R W V R OG  ,Q YH V W R U V ZK R V H OO ZLQ Q H U V D Q G
K R OG OR V H U V E H F D X V H W K H \ H [S H F W W K H OR V H U V W R R X W S H U IR U P W K H ZLQ Q H U V LQ W K H IX W X U H D U H  R Q
D YH U D J H  P LV W D NH Q  7K H V X S H U LR U U H W X U Q V W R IR U P H U ZLQ Q H U V Q R W H G K H U H D U H F R Q V LV W H Q W ZLW K
-H J D G H H V K D Q G 7LW P D Q V     p Q G LQ J R I S U LF H P R P H Q W X P LQ V H F X U LW \ U H W X U Q V D W K R U L] R Q V
R I X S W R H LJ K W H H Q P R Q W K V  W K R X J K ' H E R Q G W D Q G 7K D OH U         p Q G S U LF H U H YH U V D OV D W

OR Q J H U K R U L] R Q V R I W K U H H W R p YH \H D U V 

7K H D YH U D J H H [F H V V U H W X U Q V W R ZLQ Q H U V V R OG LQ 7D E OH 9 , D U H G H W H U P LQ H G E \ F D OF X OD W LQ J H [F H V V
E X \D Q G K R OG U H W X U Q V R YH U W K H S H U LR G V V X E V H TX H Q W W R H D F K S U R p W D E OH V D OH R I H D F K V W R F N D Q G
W K H Q W D NLQ J D Q D YH U D J H ZK LF K ZH LJ K V H D F K R E V H U YD W LR Q H TX D OO\ 0D Q \ V W R F NV D U H V R OG IR U D
S U R p W R Q P R U H W K D Q R Q H G D W H  V R P H W LP H V W K H V D P H V W R F N LV V R OG IR U D S U R p W R Q W K H V D P H
G D W H E \ P R U H W K D Q R Q H LQ YH V W R U  ( D F K R I W K H V H V D OH V LV F R X Q W H G D V D V H S D U D W H R E V H U YD W LR Q 
7K H V D P H S U R F H G X U H D S S OLH V W R S D S H U OR V V H V  7K H S YD OX H V LQ 7D E OH 9 , D U H H V W LP D W H G E \
E R R W V W U D S S LQ J D Q H P S LU LF D O G LV W U LE X W LR Q IR U W K H G LoH U H Q F H LQ D YH U D J H H [F H V V E X \D Q G K R OG
U H W X U Q V W R U H D OL] H G ZLQ Q H U V D Q G S D S H U OR V V H V  7K LV H P S LU LF D O G LV W U LE X W LR Q LV J H Q H U D W H G X Q G H U
W K H Q X OO K \S R W K H V LV W K D W V X E V H TX H Q W H [F H V V U H W X U Q V W R U H D OL] H G ZLQ Q H U V D Q G S D S H U OR V H U V D U H
G U D ZQ IU R P W K H V D P H X Q G H U O\LQ J G LV W U LE X W LR Q  7K H P H W K R G R OR J \ LV V LP LOD U W R W K D W R I % U R F N
/ D NR Q LV K R N D Q G / H % D U R Q     D Q G ,NH Q E H U U \ / D NR Q LV K R N D Q G 9 H U P D H OH Q      / \R Q 
% D U E H U  D Q G 7V D L     W H V W W K H D F F H S W D Q F H D Q G U H MH F W LR Q U D W H V IR U W K LV P H W K R G R OR J \ D Q G
p Q G W K D W LW S H U IR U P V ZH OO LQ U D Q G R P V D P S OH V  )R U H D F K V W R F N LQ W K H V D P S OH IR U ZK LF K &5 6 3
U H W X U Q G D W D D U H D YD LOD E OH  D U H S OD F H P H Q W V W R F N LV G U D ZQ ZLW K U H S OD F H P H Q W IU R P W K H V H W R I D OO
&5 6 3 V W R F NV R I W K H V D P H V L] H G H F LOH D Q G V D P H E R R NW R P D U NH W TX LQ W LOH D V W K H R U LJ LQ D O V W R F N
8 V LQ J W K H U H S OD F H P H Q W V W R F NV W R J H W K H U ZLW K W K H R U LJ LQ D O R E V H U YD W LR Q G D W H V  D YH U D J H H [F H V V
E X \D Q G K R OG U H W X U Q V D U H F D OF X OD W H G IR U W K H        D Q G    W U D G LQ J G D \V IR OOR ZLQ J G D W H V R Q
 1RWHWKDW WKH LQVDPSOH PHGLDQ KROGLQJ SHULRG LV D GRZQZDUGO\ ELDVHG HVWLPDWH RI WKH WUXH PHGLDQ
KROGLQJ SHULRG VLQFH VWRFNV KHOG IRU ORQJ SHULRGV DUH PRUH OLNHO\ WR EH ERXJKW EHIRUH RU VROG DIWHU WKH GDWD
SHULRG DQG WKHUHIRUH QRW FRXQWHG LQ WKH VDPSOH DYHUDJHV 7KH DYHUDJH WXUQRYHU UDWH IRU HTXLW\ LQ WKHVH
DFFRXQWV LV  SHUFHQW SHU PRQWK ZKLFK FRUUHVSRQGV WR DQ DYHUDJH KROGLQJ SHULRG RI DERXW  PRQWKV
 $W WKH WLPH RI WKLV VWXG\ &563 GDWD ZHUH DYDLODEOH WKURXJK  )RU WKLV UHDVRQ WZR \HDU VXEVHTXHQW
UHWXUQV DUH QRW FDOFXODWHG IRU VDOHV GDWHV LQ 

 
ZK LF K V D OH V IR U D S U R p W R U S D S H U OR V V H V D U H R E V H U YH G  7K H V H D YH U D J H V  D Q G W K H LU G LoH U H Q F H V 
F R Q V W LW X W H R Q H R E V H U YD W LR Q IU R P W K H H P S LU LF D O G LV W U LE X W LR Q      V X F K R E V H U YD W LR Q V D U H P D G H 
7K H Q X OO K \S R W K H V LV LV U H MH F W H G D W W K H o S H U F H Q W OH YH O LI W K H D YH U D J H V X E V H TX H Q W H [F H V V U H W X U Q
W R U H D OL] H G ZLQ Q H U V P LQ X V W K D W W R S D S H U OR V H U V LQ W K H G D W D V H W LV J U H D W H U W K D Q W K H  bo
S H U F H Q W LOH D YH U D J H H [F H V V U H W X U Q W R U H D OL] H G ZLQ Q H U V P LQ X V W K D W W R S D S H U OR V H U V R E V H U YH G LQ
W K H H P S LU LF D O G LV W U LE X W LR Q 

: H V D Z LQ 7D E OH ,,, F R OX P Q  W K D W LQ YH V W R U V D U H P R U H OLNH O\ W R U H D OL] H V P D OOH U  U D W K H U W K D Q

OD U J H U  J D LQ V D Q G OR V V H V  ,W P D \ E H W K D W  G X H W R U H J U H W D YH U V LR Q  LQ YH V W R U V D U H P R V W OR D W K
W R U H D OL] H W K H LU J U H D W H V W OR V V H V  D Q G  G X H W R W D [ F R Q V H TX H Q F H V  W K H \ S R V W S R Q H U H D OL] LQ J W K H LU
J U H D W H V W J D LQ V  / R ZH U S U LF H U D Q J H V D U H OLNH O\ W R K D YH D J U H D W H U S U R S R U W LR Q R I OD U J H OR V H U V D Q G
D V P D OOH U S U R S R U W LR Q R I OD U J H ZLQ Q H U V W K D Q X S S H U S U LF H U D Q J H V  ,Q YH V W R U V ZLOO W K H U H IR U H K D YH
D J U H D W H U S U R S H Q V LW \ W R Q R W V H OO OR V H U V LQ OR ZH U S U LF H U D Q J H V  D Q G W R Q R W V H OO ZLQ Q H U V LQ K LJ K H U
S U LF H U D Q J H V 

+ D U U LV     V X J J H V W V W K D W LQ YH V W R U V U H W LF H Q F H W R V H OO OR V H U V P D \ E H G X H W R W K H LU V H Q V LW LYLW \
W R K LJ K H U W U D G LQ J F R V W V D W OR ZH U V W R F N S U LF H V  7D E OH 9 ,, U H S R U W V 3 *5 D Q G 3 / 5 IR U G LoH U H Q W
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W K D Q OR V H U V  7K LV G LoH U H Q F H LV V W D W LV W LF D OO\ V LJ Q Lp F D Q W LQ   S D U W LW LR Q V  : K H Q F R P S D U LQ J
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D W ZK LF K LQ YH V W R U V S X U F K D V H D G G LW LR Q D O V K D U H V R I V W R F NV W K H \ D OU H D G \ R ZQ  7K H S U R S R U W LR Q
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W K H LU OD U J H U R Q H V  7K H V H E H OLH IV F R X OG W K H Q D OV R OH D G W K H P W R E X \ IH ZH U D G G LW LR Q D O V K D U H V R I
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D V D E U H D N S R LQ W V H H 7D E OH ,,,  6 LP LOD U O\ , S D U W LW LR Q OR V H U V LQ W R OD U J H D Q G V P D OO OR V H U V X V LQ J
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ZLQ Q H U V D U H U H S X U F K D V H G D W D U D W H R I      6 P D OO OR V H U V D U H U H S X U F K D V H G D W D U D W H R I    
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W K H \ E H OLH YH V P D OO ZLQ Q H U V ZLOO U H YH U W E X W OD U J H ZLQ Q H U V ZLOO S H U IR U P ZH OO K R ZH YH U R W K H U
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LQ YH V W R U E X \V    V K D U H V R I V W R F N $ D W    G R OOD U V S H U V K D U H  7K H Q V W R F N $ D S S U H F LD W H V W R
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W K H R U \ D S S OLH V R Q O\ W R W K H V W R F NV V K H R ZQ V  7K X V D E H OLH I LQ P H D Q U H YH U V LR Q LP S OLH V W K D W
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R ZQ W K H V H V W R F NV  ZK LOH S U R V S H F W W K H R U \ P D NH V Q R S U H G LF W LR Q LQ W K LV F D V H  2G H D Q     p Q G V
W K D W W K LV V D P H J U R X S R I LQ YH V W R U V W H Q G V W R E X \ V W R F NV ZK LF K K D YH  R Q D YH U D J H  R X W S H U IR U P H G
W K H &5 6 3 YD OX H ZH LJ K W H G LQ G H [ E \ D E R X W   S H U F H Q W R YH U W K H S U H YLR X V W ZR \H D U V  7K LV ZR X OG
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W LR Q H oH F W V  W K D W LV  W K H \ U H D OL] H W K H LU S U R p W D E OH V W R F NV LQ YH V W P H Q W V D W D P X F K K LJ K H U U D W H
W K D Q W K H LU X Q S U R p W D E OH R Q H V  H [F H S W LQ ' H F H P E H U  7K H H [W H Q W W R ZK LF K W K LV E H K D YLR U D oH F W V
P D U NH W S U LF H V G H S H Q G V R Q W K H W U D G LQ J D F W LYLW LH V R I R W K H U P D U NH W S D U W LF LS D Q W V V X F K D V S U R IH V 
V LR Q D O W U D G H U V D Q G LQ V W LW X W LR Q D O LQ YH V W R U V  ,I W K H G LV S R V LW LR Q H oH F W K R OG V LQ D J J U H J D W H LW P D \
F R Q W U LE X W H W R W K H S R V LW LYH U H OD W LR Q V K LS E H W ZH H Q S U LF H F K D Q J H D Q G YR OX P H LG H Q W Lp H G E \ / D NR Q 
LV K R N D Q G 6 P LG W     D Q G E \ )H U U LV  + D X J H Q  D Q G 0D NK LMD      7K H G LV S R V LW LR Q H oH F W
F R X OG D OV R E H D F D X V H R I D S R V LW LYH F R U U H OD W LR Q E H W ZH H Q S U LF H F K D Q J H V D Q G YR OX P H LQ R W K H U
P D U NH W V V X F K D V U H V LG H Q W LD O U H D O H V W D W H  6 K LOOH U D Q G &D V H     U H S R U W H YLG H Q F H R I G LV S R V LW LR Q
H oH F W V IU R P LQ W H U YLH ZV R I K R P H R ZQ H U V LQ E R R P D Q G S R V W E R R P U H D O H V W D W H P D U NH W V 

% \ D oH F W LQ J V X S S O\ W K H G LV S R V LW LR Q H oH F W P D \ D OV R F R Q W U LE X W H W R P D U NH W V W D E LOLW \ Q H D U S U LF H V
D W ZK LF K V X E V W D Q W LD O W U D G LQ J K D V S U H YLR X V O\ W D NH Q S OD F H  ,I P D Q \ LQ YH V W R U V E X \ D V W R F N D W
D S D U W LF X OD U S U LF H  W K LV S U LF H P D \ E H F R P H W K H LU U H IH U H Q F H S R LQ W  ,I W K H V W R F N ID OOV E H OR Z W K LV
U H IH U H Q F H S R LQ W  W K H V H LQ YH V W R U V ZLOO E H D YH U V H W R V H OOLQ J IR U D OR V V  U H G X F LQ J W K H V X S S O\ R I
S R W H Q W LD O V H OOH U V  $ U H G X F H G V X S S O\ R I S R W H Q W LD O V H OOH U V F R X OG V OR Z IX U W K H U S U LF H G H F U H D V H V 
2Q W K H R W K H U K D Q G  LI W K H V W R F N U LV H V D E R YH W K H U H IH U H Q F H S R LQ W  W K H V H LQ YH V W R U V ZLOO E H P R U H
ZLOOLQ J W R V H OO LQ F U H D V LQ J W K H V X S S O\ R I S R W H Q W LD O V H OOH U V  D Q G S R V V LE O\ V OR ZLQ J IX U W K H U S U LF H
LQ F U H D V H V  ,I W K H V H LQ YH V W R U V K D YH S U LYD W H LQ IR U P D W LR Q D E R X W W K H IX W X U H S U R V S H F W V R I D F R P S D Q \
ZK R V H V W R F N W K H \ K R OG  W K H G LV S R V LW LR Q H oH F W P D \ V OR Z W K H U D W H D W ZK LF K W K LV LQ IR U P D W LR Q LV
LQ F R U S R U D W H G LQ W R S U LF H  )R U H [D P S OH  LQ YH V W R U V ZLW K Q H J D W LYH LQ IR U P D W LR Q P D \ E H X Q ZLOOLQ J
W R V H OO D V W R F N LI LW V S U LF H LV E H OR Z W K H LU U H IH U H Q F H S R LQ W  ,Q Q R W V H OOLQ J W K H V W R F N W K H V H
LQ YH V W R U V ZLOO ID LO W R V LJ Q D O W K H LU Q H J D W LYH LQ IR U P D W LR Q W R W K H P D U NH W  D Q G W K H U H F R X OG E H D
G H OD \ E H IR U H W K D W LQ IR U P D W LR Q LV U H q H F W H G LQ S U LF H V 

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D YH U V LR Q  OH W X V LP D J LQ H W K D W D K \S R W K H W LF D O LQ YH V W R U LV F K R R V LQ J W R V H OO R Q H R I W ZR V W R F NV 
7K H p U V W R I W K H V H V W R F NV E H K D YH V OLNH W K H D YH U D J H U H D OL] H G ZLQ Q H U LQ W K LV G D W D V H W D Q G W K H
R W K H U OLNH W K H D YH U D J H S D S H U OR V H U  7K H LQ YH V W R U ZLV K H V W R V H OO     G R OOD U V ZR U W K R I V W R F N
D IW H U F R P P LV V LR Q V D Q G W K D W K D S S H Q V W R E H ZK D W K LV S R V LW LR Q LQ H D F K V W R F N LV F X U U H Q W O\ ZR U W K 
6 X S S R V H K H LV D YH U V H W R U H D OL] LQ J OR V V H V D Q G V R V H OOV W K H ZLQ Q LQ J V W R F N ,I K LV H [S H U LH Q F H LV

 
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7D E OH ,,, W K LU G F R OX P Q  6 LQ F H W K H V W R F N LV F X U U H Q W O\ ZR U W K     G R OOD U V LW V S X U F K D V H S U LF H
W K H U H IR U H P X V W K D YH E H H Q    G R OOD U V  D Q G K LV F D S LW D O J D LQ LV    G R OOD U V  ,I K H LQ V W H D G F K R R V H V
W R V H OO     G R OOD U V R I W K H OR V LQ J V W R F N K LV U H W X U Q ZLOO E H      ZLW K D S X U F K D V H S U LF H R I
    G R OOD U V  D Q G D F D S LW D O OR V V R I    G R OOD U V  2Q H \H D U OD W H U W K H OR V LQ J V W R F N ZK LF K K H
F K R R V H V W R K R OG ZLOO K D YH  R Q D YH U D J H  D U H W X U Q  S H U F H Q W E H OR Z W K H P D U NH W 7D E OH 9 ,  W K H
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W D [ U D W H V IR U F D S LW D O J D LQ V IR U LQ YH V W R U V LQ W K LV V D P S OH ZLOO YD U \ IU R P  W R   S H U F H Q W  S OX V
V W D W H W D [H V  $ V V X P H W K D W R X U LQ YH V W R U V P D U J LQ D O W D [ U D W H LV   S H U F H Q W D Q G W K D W K H K D V
W D [D E OH J D LQ V D J D LQ V W ZK LF K W R R oV H W OR V V H V  7K H Q E \ F K R R V LQ J W R V H OO W K H ZLQ Q LQ J V W R F N
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D U H W X U Q R I  S H U F H Q W R Q K LV P R Q H \ F K R R V LQ J Q R W W R G H IH U W K H V H W D [H V F R V W V K LP D E R X W  
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W K H OR V H U LV   G R OOD U V OH V V W K D Q LI K H K D G K H OG W K H R W K H U V W R F N W K H ZLQ Q H U  8 V LQ J    
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OR V H U V W R R OR Q J  7K H R U \ D Q G H YLG H Q F H  - RXUQDO RI ) LQDQFH         

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W K H Q X P E H U R I U H D OL] H G J D LQ V S OX V W K H Q X P E H U R I S D S H U X Q U H D OL] H G J D LQ V  D Q G 3 / 5 LV W K H
Q X P E H U R I U H D OL] H G OR V V H V G LYLG H G E \ W K H Q X P E H U R I U H D OL] H G OR V V H V S OX V W K H Q X P E H U R I S D S H U
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W K H U H D U H       U H D OL] H G J D LQ V       S D S H U J D LQ V       U H D OL] H G OR V V H V  D Q G       S D S H U
OR V V H V  )R U ' H F H P E H U W K H U H D U H     U H D OL] H G J D LQ V      S D S H U J D LQ V      U H D OL] H G OR V V H V 
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S U R S R U W LR Q V D U H H TX D O W R ] H U R D V V X P LQ J W K D W D OO U H D OL] H G J D LQ V  S D S H U J D LQ V  U H D OL] H G OR V V H V 
D Q G S D S H U OR V V H V U H V X OW IU R P LQ G H S H Q G H Q W G H F LV LR Q V 

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7K LV W D E OH U H S R U W V W K H P H D Q U H W X U Q U H D OL] H G W R V W R F NV V R OG IR U D J D LQ D Q G W R V W R F NV V R OG IR U D
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5 H WX UQ R Q 5 H D OL] H G *D LQ V            
5 H WX UQ R Q 3 D S H U *D LQ V            
5 H WX UQ R Q 5 H D OL] H G / R VVH V            
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3 *5 DQG 3 /5 :KHQ WKH ( QWLU H 3 RVLWLRQ LQ D 6WRFN LV 6ROG

7K LV W D E OH F R P S D U H V W K H D J J U H J D W H 3 U R S R U W LR Q R I *D LQ V 5 H D OL] H G 3 *5 WR WK H D J J UH J D WH
3 U R S R U W LR Q R I / R V V H V 5 H D OL] H G 3 / 5  ZK H U H 3 *5 LV W K H Q X P E H U R I U H D OL] H G J D LQ V G LYLG H G
E \ W K H Q X P E H U R I U H D OL] H G J D LQ V S OX V W K H Q X P E H U R I S D S H U X Q U H D OL] H G J D LQ V  D Q G 3 / 5 LV
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W R W D O S R V LW LR Q LQ D V W R F N ZD V V R OG W K D W G D \ 3 D S H U X Q U H D OL] H G J D LQ V D Q G OR V V H V D U H F R X Q W H G
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5 H D OL] H G J D LQ V  S D S H U J D LQ V  OR V V H V  D Q G S D S H U OR V V H V D U H D J J U H J D W H G R YH U W LP H        
D Q G D F U R V V D OO D F F R X Q W V LQ W K H G D W D V H W  3 *5 D Q G 3 / 5 D U H U H S R U W H G IR U W K H H Q W LU H \H D U D Q G
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    S D S H U J D LQ V      U H D OL] H G OR V V H V  D Q G     S D S H U OR V V H V  7K H W V W D W LV W LF V W H V W W K H Q X OO
K \S R W K H V H V W K D W W K H G LoH U H Q F H V LQ S U R S R U W LR Q V D U H H TX D O W R ] H U R D V V X P LQ J W K D W D OO U H D OL] H G
J D LQ V  S D S H U J D LQ V  U H D OL] H G OR V V H V  D Q G S D S H U OR V V H V U H V X OW IU R P LQ G H S H Q G H Q W G H F LV LR Q V 

( Q W LU H < H D U ' H F H P E H U

3 / 5        
3 *5        
' LoH U H Q F H LQ 3 U R S R U W LR Q V        
W V W D W LV W LF    

 
 7D E OH 9

3 *5 DQG 3 /5 :KHQ 1 R 1 HZ 6WRFN LV 3 XU FKDVHG :LWKLQ 7 KU HH :HHNV RI 6DOH

7K LV W D E OH F R P S D U H V W K H D J J U H J D W H 3 U R S R U W LR Q R I *D LQ V 5 H D OL] H G 3 *5 WR WK H D J J UH J D WH
3 U R S R U W LR Q R I / R V V H V 5 H D OL] H G 3 / 5  ZK H U H 3 *5 LV W K H Q X P E H U R I U H D OL] H G J D LQ V G LYLG H G E \
W K H Q X P E H U R I U H D OL] H G J D LQ V S OX V W K H Q X P E H U R I S D S H U X Q U H D OL] H G J D LQ V  D Q G 3 / 5 LV W K H
Q X P E H U R I U H D OL] H G OR V V H V G LYLG H G E \ W K H Q X P E H U R I U H D OL] H G OR V V H V S OX V W K H Q X P E H U R I S D S H U
X Q U H D OL] H G OR V V H V  ,Q W K LV W D E OH OR V V H V D Q G J D LQ V D U H F R X Q W H G R Q O\ LI D Q R Q H Z S X U F K D V H
ZD V P D G H LQ W R D S R U W IR OLR R Q W K H G D \ R I W K H V D OH R U ZLW K LQ W K U H H ZH H NV IR OOR ZLQ J W K H V D OH 
3 D S H U X Q U H D OL] H G J D LQ V D Q G OR V V H V D U H F R X Q W H G IR U G D \V R Q ZK LF K TX D OLI\LQ J V D OH V ZH U H P D G H 
5 H D OL] H G J D LQ V  S D S H U J D LQ V  OR V V H V  D Q G S D S H U OR V V H V D U H D J J U H J D W H G R YH U W LP H        
D Q G D F U R V V D OO D F F R X Q W V LQ W K H G D W D V H W  3 *5 D Q G 3 / 5 D U H U H S R U W H G IR U W K H H Q W LU H \H D U D Q G
IR U ' H F H P E H U R Q O\ )R U W K H H Q W LU H \H D U W K H U H D U H      U H D OL] H G J D LQ V       S D S H U J D LQ V 
    U H D OL] H G OR V V H V  D Q G      S D S H U OR V V H V  )R U ' H F H P E H U W K H U H D U H     U H D OL] H G J D LQ V 
    S D S H U J D LQ V      U H D OL] H G OR V V H V  D Q G     S D S H U OR V V H V  7K H W V W D W LV W LF V W H V W W K H Q X OO
K \S R W K H V H V W K D W W K H G LoH U H Q F H V LQ S U R S R U W LR Q V D U H H TX D O W R ] H U R D V V X P LQ J W K D W D OO U H D OL] H G
J D LQ V  S D S H U J D LQ V  U H D OL] H G OR V V H V  D Q G S D S H U OR V V H V U H V X OW IU R P LQ G H S H Q G H Q W G H F LV LR Q V 

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3 / 5        
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( [ 3 RVW 5HWXU QV

7K LV W D E OH F R P S D U H V D YH U D J H U H W X U Q V LQ H [F H V V R I W K H &5 6 3 YD OX H ZH LJ K W H G LQ G H [ W R V W R F NV
W K D W D U H V R OG IR U D S U R p W : LQ Q LQ J 6 W R F NV 6 R OG D Q G W R V W R F NV W K D W F R X OG E H  E X W D U H Q R W 
V R OG IR U D OR V V 3 D S H U / R V V H V  5 H W X U Q V D U H P H D V X U H G R YH U W K H        D Q G    W U D G LQ J
G D \V V X E V H TX H Q W W R W K H V D OH R I D U H D OL] H G ZLQ Q H U D Q G V X E V H TX H Q W W R G D \V R Q ZK LF K V D OH V R I
R W K H U V W R F NV W D NH S OD F H LQ W K H S R U W IR OLR R I D S D S H U OR V H U  3 YD OX H V U H IH U W R W K H IU H TX H Q F \ ZLW K
ZK LF K G LoH U H Q F H V LQ H [F H V V U H W X U Q V R YH U W K H V D P H S H U LR G V LQ W K H H P S LU LF D O E R R W V W U D S S H G
G LV W U LE X W LR Q V H [F H H G W K H G LoH U H Q F H LQ H [F H V V U H W X U Q V R E V H U YH G LQ W K H G D W D 

3 H U IR U P D Q F H R YH U 3 H U IR U P D Q F H R YH U 3 H U IR U P D Q F H R YH U
Q H [W   Q H [W    Q H [W   
W U D G LQ J G D \V W U D G LQ J G D \V W U D G LQ J G D \V

$ YH U D J H H [F H V V U H WX UQ R Q               
: LQ Q LQ J 6 W R F NV 6 R OG
$ YH U D J H H [F H V V U H WX UQ R Q               
3 D S H U / R VVH V
' LoH U H Q F H LQ H [F H VV UH WX UQ V               
S YD OX H V            

 
 7D E OH 9 ,,

3 *5 DQG 3 /5 3 DU WLWLRQHG E\ 3 U LFH DQG 5HWXU Q

7K LV W D E OH F R P S D U H V W K H D J J U H J D W H 3 U R S R U W LR Q R I *D LQ V 5 H D OL] H G 3 *5 WR WK H D J J UH J D WH
3 U R S R U W LR Q R I / R V V H V 5 H D OL] H G 3 / 5  ZK H U H 3 *5 LV W K H Q X P E H U R I U H D OL] H G J D LQ V G LYLG H G
E \ W K H Q X P E H U R I U H D OL] H G J D LQ V S OX V W K H Q X P E H U R I S D S H U X Q U H D OL] H G J D LQ V  D Q G 3 / 5 LV
W K H Q X P E H U R I U H D OL] H G OR V V H V G LYLG H G E \ W K H Q X P E H U R I U H D OL] H G OR V V H V S OX V W K H Q X P E H U R I
S D S H U X Q U H D OL] H G OR V V H V  7K H G D W D D U H S D U W LW LR Q H G R Q V W R F N S U LF H D Q G R Q D E V R OX W H YD OX H R I
W K H U H W X U Q W R G D W H 5  IR U D OO D F F R X Q W V           -D Q X D U \ W K U R X J K 1 R YH P E H U R Q O\ 7K H
W V W D W LV W LF V W H V W W K H Q X OO K \S R W K H V H V W K D W W K H G LoH U H Q F H V LQ S U R S R U W LR Q V D U H H TX D O W R ] H U R
D V V X P LQ J W K D W D OO U H D OL] H G J D LQ V  S D S H U J D LQ V  U H D OL] H G OR V V H V  D Q G S D S H U OR V V H V U H V X OW IU R P
LQ G H S H Q G H Q W G H F LV LR Q V 

M5M x        M5M x        M5M x       x M5M

3 ULFH x    3 / 5                
3 *5                
' LoH U H Q F H                
W V W D W LV W LF            

   x 3 ULFH x    3 / 5                
3 *5                
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W V W D W LV W LF            

   x 3 ULFH 3 / 5                
3 *5            
' LoH U H Q F H                
W V W D W LV W LF          

 
 Value (Utility)

Losses Gains

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3*53/5

 

 


-DQ 0D U 0D \ -XO 6HS 1R Y

0 RQWK

)LJXU H  5DWLR RI WKH 3 U RSRU WLRQ RI *DLQV 5HDOL]HG 3 *5 WR WKH 3 U RSRU WLRQ RI
/RVVHV 5HDOL]HG 3 /5 IRU HDFK PRQWK 3 *5 LV W K H Q X P E H U R I U H D OL] H G J D LQ V G LYLG H G
E \ W K H Q X P E H U R I U H D OL] H G J D LQ V S OX V W K H Q X P E H U R I S D S H U X Q U H D OL] H G J D LQ V  D Q G 3 / 5 LV W K H
Q X P E H U R I U H D OL] H G OR V V H V G LYLG H G E \ W K H Q X P E H U R I U H D OL] H G OR V V H V S OX V W K H Q X P E H U R I S D S H U
X Q U H D OL] H G OR V V H V  5 H D OL] H G J D LQ V  S D S H U J D LQ V  OR V V H V  D Q G S D S H U OR V V H V D U H D J J U H J D W H G R YH U
W LP H         D Q G D F U R V V D OO D F F R X Q W V LQ W K H G D W D V H W