A comparison of reticle-produced amplitude- and frequency-modulated waves has been made. By calculating the power content of each component of the frequency spectrum of a modulated wave, the optimum values for the parameters of bandwidth and modulation index have been determined. It is shown that an FM system with a modulation index of 1.8 and a bandwidth encompassing only the first sideband pair exhibits the highest effective signal-to-noise ratio. Using these values of bandwidth and modulation index, the FM system exhibits a slight effective signal-to-noise superiority when compared with an AM system operating under similar conditions. The superiority of effective signal-to-noise ratio is lost if either the bandwidth or modulation index departs markedly from its optimum value. The modulation efficiency for various reticle-produced modulated waves has also been calculated.