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MediumRiskYield Enhancement

Bearish Contingent Participation Autocallable Optimization Securities

Investment Theme: UBS issued a Bearish Contingent Participation Auto callable Optimization Securities for the Corn on Aug 11, 2014. This note with a one year maturity contains full downside exposure if the commodity falls below the value on the pricing date. On the up side, the note is conditioned to provide a return if the value falls below the trigger level. The observations days determine the value of that return. The first observation date nets 5%, the second 10%, the third 15%, and finally the last offers 20%. Due to the bearish feature, investors could lose because of inversion. This means if the security is not called and the final price is higher than the trigger price investors will be exposed to loss.

Investment Terms• Issuer – UBS• Notional- $2,137,000• Unit Size-213,700 notes• CUSIP-90273L179• Underlying-Corn• Pricing date- Aug 11, 2014• Maturity data- Aug 24,

2015• Max Return-20 %• Minimum Return- 0%

Issuer Details• Issuer – UBS• S&P Credit Rating:• Market capitalization

66.46 Bn• CDS 5y spread 150 bps

Investment underlying opportunity: Corn is a commodity, in 2013, the U.S. produced 353.7 million metric tons off. The next best producer of corn that year was China with 217.7 million metric tons. The world in total produced 1.016 billion metric tons of corn. Its produced in such quantity because of all the uses it has in the markets. Corn is a staple as a food source for many parts of the world. It is used in chemical, bio-fuel, alternative medicine, and many other things. UBS issued a Bearish Contingent Participation Auto callable Optimization Securities on corn. The bearish feature with an auto callable is comparable to a put style of option, where the security is called when the underlying value is called if it drops below the initial value level. Further analysis

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Risk Return DashboardExpected Return

6.165 %

Volatility 45.9%

Risk Score 6

Capital Guaranteed

No

Maximum Loss

100% of investment

Performance Measure

Expected Return

Medium

Market Risk High

Issuer Risk Low

Complexity Low

S&P 500 statisticsBeta N.A.

P/E N.A.

RoE N.A.

Current Ratio N.A.

Leverage Ratio N.A.

Altman's Z-Score N.A.

Dividend Yield N.A.

Total Debt/Equity N.A.

Corn

The Expected Return is 6.165%. The volatility is at a low 45.9%. The Risk Score is at a 6. This note does not have a capital guarantee.

Investment Metrics

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Note Performance (Historical)

Note Performance (Future – Stress test )

Return 6.165% per annum 6.165% per annum

% of called 61.456% 61.456%

Probability of Gain

81.41% 81.41%

Risk Score 6 6

Volatility 45.9% 45.9%

Probability of Loss

18.58 % 18.58%

Expected Maturity

1 Years 1 Years

The note gives a return of 6.165% per annum historically with a probability of gain of 81.41%. As the note gets closer to maturity, the returns and the probability of gain increases.

Investment Performance

7/24/1998 4/19/2001 1/14/2004 10/10/2006 7/6/2009 4/1/2012 12/27/2014 9/22/2017

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Historical Analysis

Asset performance Note Return Asset Level

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Recommendation: Metrics and historical analysis concludes this investment is a risky one for aconservative investor. In current market environment for an adventurous investor this investment will definitely help to obtain 20% maximum return.

Pros Cons•Note provides a bearish feature that provides a return of as the underlying reaches trigger levels below the initial value on pricing date.•Note offers exciting opportune exposure to Corn commodity and futures market for $10 per note.•Note offers a pre offers four observation periods for the auto callable to enact.

•Note has potential to loss.•if the security is not called and the final price is higher than the trigger price investors will be exposed to loss.

Score Card: Autocallable Market-Linked Step Up Note on S&P 500

Market Direction (SP 500):

Market Vol (SP 500):

Underlying Direction:

Underlying Vol:

Issuer Credit (CDS):

Investor Risk Appetite:

Investment Recommendation

Disclaimer: This report is prepared by Gatick Global solutions team. This is not an investment advise.

Contact Details:Karthik Misra and Chandra S Khandrika for further details and questions

Bearish Bullish

Low High

Bearish Bullish

Low High

Low High

Low High