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When a quantity such as the transmission of an optical modulator is sinusoidally modulated, the modulation depth can be defined as the modulation amplitude (i.e. one-half of the peak-to-peak changes) divided by the mean value.
A modulation depth of 100% thus corresponds to a situation where the minimum value of the modulated quantity is zero, and the maximum is twice the mean value.
A signal with a modulation depth of 50%.
Here, the modulation amplitude is half the mean value.