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Create a vocabulary test checking understanding for b2 students with the following words: loose ends a task is due overdue attain procrastination cluttered desk figure out enterprise entrepreneur entrepreneurship distraction disruption outcome digression digress (v) headset circle back facilities bonus benefits rivalry competition commute daycare level-headed comply with sth wear and tear laughing stock track record to play the blame game breach accomplish take advantage of boast about emotionally draining tempting seductive death penalty capital punishment resonate noise-cancelling headphones get rid of sth put sth off postpone thrive on adrenaline rush commitment break down superficial surveillance addicted to sth sedentary lifestyle tense stay alert notifications come down to enhance artificial intelligence confidential regardless of tireless efforts chin wag flossing compulsive over-exercising rapture comprehensive school weep circle back wrap up cutting-edge bargaining rivalry differentiation hazard crucial retain raise the bar head to head make a killing ahead of the curve to drop the ball ballpark figure
Create a vocabulary quiz checking understanding with the following words: loose ends a task is due overdue attain procrastination cluttered desk figure out enterprise entrepreneur entrepreneurship distraction disruption outcome digression digress (v) headset circle back facilities bonus benefits rivalry competition commute daycare level-headed comply with sth wear and tear laughing stock track record to play the blame game breach accomplish take advantage of boast about emotionally draining tempting seductive death penalty capital punishment resonate noise-cancelling headphones get rid of sth put sth off postpone thrive on adrenaline rush commitment break down superficial surveillance addicted to sth sedentary lifestyle tense stay alert notifications come down to enhance artificial intelligence confidential regardless of tireless efforts chin wag flossing compulsive over-exercising rapture comprehensive school weep circle back wrap up cutting-edge bargaining rivalry differentiation hazard crucial retain raise the bar head to head make a killing ahead of the curve to drop the ball ballpark figure
### Quizalize Script: **"Millennial TV & Celeb Quiz Challenge"** #### Quiz Introduction: - **Title**: "Millennial TV & Celebrity Quiz Challenge šŗāØ" - **Description**: "Are you ready to prove your 2000s pop culture expertise? Answer these fun questions to show off your TV and celebrity knowledge! Invite your friends and see who comes out on top!" - **Gamified Element**: - Enable Quizalizeās leaderboard feature to track scores as users compete in real-time. #### Question 1: - **Prompt**: "Who said this iconic line? *āHow YOU doinā?ā* š" - **Answer Options**: 1. Ross (Friends) 2. Joey (Friends) 3. Chandler (Friends) - **Correct Answer**: Joey (Friends) - **Feedback**: - **Correct**: "š You got it! Joey Tribbianiās catchphrase is unforgettable. šš" - **Incorrect**: "ā Oops! Itās Joey from *Friends*! Now we need to binge-watch, donāt we?" - **Gamified Feature**: Award bonus points for quick answers, encouraging fast responses. #### Question 2: - **Prompt**: "Which show features these 4 iconic New Yorkers? š āØ" - **Answer Options**: 1. Gossip Girl 2. The OC 3. Sex and the City - **Correct Answer**: Sex and the City - **Feedback**: - **Correct**: "š Yesss! Itās *Sex and the City*! Samantha, Carrie, Miranda, and Charlotte are forever icons. š
" - **Incorrect**: "Oh no! Itās *Sex and the City*. Make some time for a glam-filled NYC binge session!" - **Visual Add-on**: Include an animated NYC skyline background or glittery graphics for correct answers. #### Question 3: - **Prompt**: "Which celeb famously shaved her head in the 2000s? š©āš¤" - **Answer Options**: 1. Britney Spears 2. Christina Aguilera 3. Lindsay Lohan - **Correct Answer**: Britney Spears - **Feedback**: - **Correct**: "š Yep, itās Britney! A legendary moment in pop culture history. šøš¤" - **Incorrect**: "Not quite! The answer is Britney Spears. That iconic moment is unforgettable!" - **Audio Elements**: Add a drumroll sound for suspense before revealing the answer. #### Final Score Screen: - **Score Tiers**: - **High Score (100%)**: "š Youāre a 2000s pop culture master! Share your score and challenge your friends to top it!" - **Medium Score (50-99%)**: "š Not bad! Youāre almost an expert. Share your score and invite others to play!" - **Low Score (Below 50%)**: "š
Looks like you need a refresh on 2000s pop culture. Share your score and dare your friends to do better!" - **Gamified Feature**: - Enable the "Challenge a Friend" option in Quizalize to spark competition. - Include a timer extension for players to decrease stress during tricky questions. #### Call-to-Action: - **Prompt**: "How well did you do? Share your results and invite your friends to join the fun! š" - **End Message**: "⨠Follow us for more fun quizzes! Whoās ready for the next challenge?" #### Design & Interactive Elements: - **Visual Enhancements**: Use animated GIFs or static pop culture images (e.g., retro TV screenshots, Britney Spears visuals) to visually set the tone for the quiz. - **Audio Elements**: Add celebratory sound effects when revealing correct answers or upon quiz completion. - **Gamified Elements**: Reward streak bonuses for consecutive correct answers to keep players engaged and competitive. This script is tailored for Quizalize, leveraging its gamification features and interactive design options to create a fun and engaging quiz that users will enjoy while fostering friendly competition!
GUIDELINES ON THE ESTABLISHMENT AND IMPLEMENTATION OF THE RESULTS-BASED PERFORMANCE MANAGEMENT SYSTEM IN THE DEPARTMENT OF EDUCATION I. Rationale 1. The Civil Service Commission (CSC), through the issuance of Memorandum Circular (MC) No. 06, series of 2012, sets the guidelines on the establishment and implementation of the Strategic Performance Management System (SPMS) in all government agencies. The SPMS gives emphasis to the strategic alignment of the agencyās thrusts with the day-to-day operation of the units and individual personnel within the organization. It focuses on measures of performance vis-a-vis the targeted milestones, and provides a credible and verifiable basis for assessing the organizational outcomes and the collective performance of the government employees. 2. As a learner-centered institution, the Department of Education (DepEd) is committed to continuously improve itself to better serve the Filipino learners and the community. The adoption of the SPMS in DepEd strengthens the culture of performance and accountability in the agency, with the DepEdās mandate, vision and mission at its core. 3. There is a need to concretize the linkage between the organizational thrusts and the performance management system. It is important to ensure organizational effectiveness and track individual improvement and efficiency by cascading the institutional accountabilities to the various levels, units and individual personnel, as anchored on the establishment of a rational and factual basis for performance targets and measures. Finally, it is necessary to link the SPMS with other systems relating to human resources and to ensure adherence to the principle of performance-based tenure and incentives. 4. In view of the above, this Order aims to adopt the SPMS as the Results-based Performance Management System (RPMS). II. Scope of Policy 5. This DepEd Order provides for the establishment and implementation of the RPMS in all DepEd schools and offices, covering all officials and employees, school-based and non school-based, in the Department holding regular plantilla positions. It stipulates the specific mechanisms, criteria and processes for the performance target setting, monitoring, evaluation and development planning. IV. Policy Statement 9. The DepEd hereby sets the guidelines on the establishment and implementation of the Results-based Performance Management System (RPMS) in the Department, stipulating the strategies, methods, tools and rewards for assessing the accomplishments vis-a-vis the commitments. This will be used for measuring and rewarding higher levels of performance of the various units and development planning of all personnel in all levels. 10. For non school-based personnel, the RPMS shall provide for an objective and verifiable basis for rating and ranking the performance of units and individual personnel in view of the granting of the Performance-Based Bonus (PBB) starting 2015. 11. For school-based personnel, the RPMS shall be used only as an appraisal tool, which shall be the basis for training and development. The granting of PBB shall be governed by the existing PBB guidelines. 12. The Department shall adopt the RPMS framework shown in Annex B. 13. The DepEd RPMS shall follow the four-stage performance management system cycle as prescribed by the CSC: i. Performance planning and commitment (Phase I); ii. Performance monitoring and coaching (Phase II); iii. Performance review and evaluation (Phase III); and iv. Performance rewarding and development planning (Phase IV). V. Performance Cycle/Process 14. The RPMS shall align the performance targets and accomplishments with the Departmentās mandate, vision, mission and strategic goals. It shall ensure 100% results orientation vis-a-vis the planned targets. On the other hand, the rateeās demonstration of the required competencies shall be monitored for developmental purposes only. 15. The RPMS cycle shall cover performance for one whole year. All school-based personnel shall follow a performance cycle starting in April of the current year and ending in March of the following year; while non school-based personnel shall follow a performance cycle starting in January and ending in December. Annexes C and D illustrate the performance cycles which shall apply to school-based and non school-based personnel, respectively. 16. The performance planning and commitment shall be done prior to the beginning of the performance cycle; while the performance monitoring and coaching shall take place immediately after Phase I, and continue throughout the performance cycle. The performance review and evaluation, as well as the performance rewarding and development planning shall be done at the end of the performance cycle. A. Phase I: Performance Planning and Commitment 17. The performance planning and commitment shall be done prior to the start of the performance cycle where the rater meets with the ratee to discuss and agree on the following: i. Office KRAs, Objectives and Performance Indicators as anchored to the overall organizational outcomes; and ii. Individual KRAs, Objectives and Performance Indicators as anchored to the Office KRAs and Objectives. 18. The Office Performance Commitment and Review Form (OPCRF) shall be accomplished by the head of office to reflect the Office KRAs, Objectives and Performance Indicators. The head of office, in coordination with the Planning Office, shall ensure alignment of the office plans and commitments to the overall organizational outcomes. The OPCRF shall be equivalent to the IPCRF of the head of office. A sample of the filled out OPCRF, including the instructions for accomplishing the form, is shown in Annex E. 19. The Individual Performance Commitment and Review Form (IPCRF) shall be accomplished by the individual personnel to reflect the agreed Individual KRAs, Objectives and Performance Indicators. A sample of the filled out IPCRF, including the instructions for accomplishing the form, is shown in Annex F. 20. Defining the Key Result Areas. The head of office, in coordination with the Planning Office, shall define the office KRAs as anchored on the overall organizational outcomes. The rater and the ratee shall discuss and agree on the break down of the office KRAs into individual KRAs. Three (3) to five (5) KRAs shall be defined for each office and individual employee. KRAs are broad categories of general outputs or outcomes. It is the mandate or function of the office and/or individual employee. The KRA is the reason why an office and/or job exist. It is an area where the office and/or individual employee are expected to focus on. 21. Setting the Objectives. The head of office shall set three (3) objectives per office KRA. The rater and the ratee shall discuss and agree on three (3) objectives per individual KRA. Objectives are specific tasks, which an office and/or employee need to do to achieve their specific KRAs. In objective setting, the SMART criteria, which stands for Specific, Measurable, Attainable, Relevant, Time Bound, shall be applied. The SMART criteria are illustrated in Annex G. 22. Setting the Timeline. The timeline shall define the target date for accomplishing each of the Objectives. The timeline for the office Objectives shall be set by the head of office in coordination with the Planning Office and School Planning Team; while the timeline for the individual Objectives shall be discussed and agreed by the rater and the ratee. 23. Assigning the Weight. Assigning of weights shall be done per KRA. Weights for each office KRA shall be assigned by the head of office in coordination with the Planning Office; while the weights for each of the individual KRAs shall be discussed and agreed upon by the rater and the ratee. 24. Identifying the Performance Indicators. Using a five (5)-point rating scale, the head of office shall identify a performance indicator for each of the office objectives, while the rater and the ratee shall identify and agree on the performance indicator for each of the individual objectives. Performance indicators are exact quantification of objectives expressed through rubrics. They are assessment tools, which gauge whether a performance is positive or negative. In identifying the performance indicator, the operational definition or meaning of each numerical rating shall be indicated under each relevant dimension (i.e., quality, efficiency, or timeliness) per performance target or success indicator. This shall ensure that the rating is objective, impartial and verifiable. Table 1 below discusses the performance measures by which the indicator must satisfy. Table 1. Performance Measures CATEGORY DEFINITION Effectiveness/Quality The extent to which actual performance compares with targeted performance. The degree to which objectives are achieved and the extent to which targeted problems are solved. In management, effectiveness relates to getting the right things done. Efficiency The extent to which time or resources is used for the intended task or purpose. Measures whether targets are accomplished with a minimum amount or quantity of waste, expense, or unnecessary effort. Timeliness Measures whether the deliverable was done on time based on the requirements of the rules and regulations, and/or clients/stakeholders. Time-related performance indicators evaluate such things as project completion deadlines, time management skills and other time-sensitive expectations. Some Performances are only rated on quality and efficiency, some on quality and timeliness, and others on efficiency only. You need not use all three (3) categories. 25. Demonstration of Competencies. During Phase I, the rater shall discuss with the ratee the competencies required of the individual personnel. Competencies are defined as the knowledge, skills and behavior that individuals demonstrate in achieving oneās results. Competencies shall uphold the DepEdās core values. They represent the way individuals define and live the values. 26. DepEd shall adopt four classes of competencies as follows: i. Core behavioral competencies are competencies, which cut across the organization; ii. Leadership competencies are competencies intended for managerial positions; a. Third level officials b. Chiefs and Assistant Chiefs c. School Heads and Department Heads iii. Staff Core Skills are competencies intended for staff and teaching-related personnel; and iv. Teaching competencies are competencies intended for teachers. The DepEd-required competencies are illustrated in Annex I. 27. The rateeās demonstration of the required competencies shall be monitored to effectively plan the interventions needed for behavioral and professional development. The assessment in the demonstration of competencies shall not be reflected in the final rating. 28. Reaching Agreement. Once the office and individual KRAs, Objectives and Performance Indicators are clearly defined, the rater and the ratee shall commit and reach an agreement by signing the OPCRF and IPCRF. The signed/approved OPCRF and IPCRF shall be the basis for monitoring and assessment, which shall take place in Phases II and III, respectively. B. Phase II: Performance Monitoring and Coaching 29. The performance monitoring and coaching shall commence after the rater and the ratee commit on the KRAs, Objectives and Performance Indicators, and sign the OPCRF and IPCRF. This shall be done throughout the year. 30. The two (2) main components of Phase II are the following: i. Performance monitoring; and ii. Coaching and feedback. 31. Performance monitoring shall provide key inputs and objective basis for rating. It shall facilitate feedback and provide evidence of performance. Performance monitoring shall be the responsibility of both the rater and the ratee who agree to track and record significant incidents through the use of the Performance Monitoring and Coaching Form (PMCF) shown in Annex J. Significant incidents are actual events and behaviors in which both positive and negative performances are observed and documented. 32. Coaching and feedback shall be a continuous process. Coaching and feedback shall be provided by the rater and/or shall be sought by the ratee to improve work performance and behavior. The rater, as the coach or mentor of the ratee, playing a critical role in the performance monitoring and coaching, shall provide an enabling environment and intervention to improve the office performance and to manage and develop individual potentials. 33. The PMCF shall capture the significant incidents. It shall provide a record of demonstrated behaviors, competencies and performance, and shall be an effective substitute in the absence of quantifiable data. The rater and the ratee shall sign each significant incident recorded in the PMCF to ensure that agreement has been reached. C. Phase III: Performance Review and Evaluation 34. The performance review and evaluation shall be done at the end of the performance cycle to assess the office and individual employeeās performance level based on the commitments and measures as contained in the signed OPCRF and IPCRF. 35. A mid-year review is prescribed to determine the progress in achieving the Objectives. In exceptional cases, and only if the situation warrants, a one-time recalibration of office and individual Objectives shall be allowed during the mid-year review. Exceptional cases shall include instances when high level decisions are taken into effect such as changes in strategic directions, and circumstances beyond the control of the ratee such as natural and/or man-made calamities, including typhoon, earthquake and other fortuitous events. During the mid-year review, the rater shall inform in writing the ratee of the status of performance, in case of an Unsatisfactory or Poor performance. Coaching, feedback and appropriate interventions shall be provided where necessary. 36. The RPMS shall put premium on KRAs towards the realization of organizational vision, mission, strategic priorities and the OPIF logframe. Hence, rating for planned and/or intervening tasks shall always be supported by reports, documents or any output as proofs of actual performance. In the absence of said bases or proofs, a particular task shall not be rated and shall be disregarded. 37. Office and Individual Performance Assessment. The head of office, in coordination with the Planning Office, shall assess the performance of the office vis-a-vis the committed targets at the beginning of the performance cycle. The rater and the ratee shall discuss and agree on the individual assessment based on the actual accomplishments of each of the KRAs and Objectives. The final rating shall be based solely on the accomplishment of the specific objectives as measured by the Performance Indicators. The OPCRF and IPCRF shall be accomplished and completed by the rater and the ratee to: i. Reflect actual accomplishments and results; ii. Rate each of the objectives; iii. Compute for the score per objective; iv. Determine the overall rating for accomplishments; v. Reach an agreement; and vi. Assess the competencies. 38. Initial self-rating shall be encouraged prior to the rater-ratee discussion. 39. Third Level Officials, as heads of offices, shall accomplish the OPCRF for submission to the Planning Office. The individual assessment of Third Level Officials shall be contained in the CESPES Forms for submission to the Career Executive Service Board (CESB). The BHROD and Personnel Division shall be furnished a copy of both forms. 40. Actual Results. The rater and the ratee shall discuss and agree on the actual accomplishments and results based on the performance commitments and measures made at the beginning of the rating period. They shall evaluate each objective whether it has been achieved or not. The significant incidents as reflected in the PMCF shall be considered for the actual results. 41. Rating the Objectives. Based on the actual accomplishments and results, each of the Objectives shall be rated using the rating scale specified below: Table 2. The RPMS Rating Scale NUMERICAL RATING ADJECTIVAL RATING DESCRIPTION OF MEANING OF RATING 5 Outstanding Performance represents an extraordinary level of achievement and commitment in terms of quality and time, technical skills and knowledge, ingenuity, creativity and initiative. Employees at this performance level should have demonstrated exceptional job mastery in all major areas of responsibility. Employee achievement and contributions to the organization are of marked excellence. 4 Very Satisfactory Performance exceeded expectations. All goals, objectives and targets were achieved above the established standards. 3 Satisfactory Performance met expectations in terms of quality of work, efficiency and timeliness. The most critical annual goals were met. 2 Unsatisfactory Performance failed to meet expectations, and/or one or more of the most critical goals were not met. 1 Poor Performance was consistently below expectations, and/or reasonable progress toward critical goals was not made. Significant improvement is needed in one or more important areas. The final assessment shall correspond to the adjectival description of Outstanding, Very Satisfactory, Satisfactory, Unsatisfactory or Poor. The range of adjectival rating is as per attached in Forms A, B, and C. 42. Process for Computing the Score per KRA. i. The rater and ratee shall ensure that each KRA has been assigned weight according to priority. ii. As an option, the rater and ratee may assign weights to objectives which shall be equal to the total weight assigned to a particular KRA. KRA 1 ā Weight assigned is 40% Objective 1 is 20% Objective 2 is 10% Objective 3 is 10% iii. The score per KRA shall be computed using the following formula: 43. Plus Factor. The plus factor shall be considered as another KRA. These are value adding accomplishments, which are not covered within the regular duties and responsibilities. The weight on the plus factor shall not exceed the weight of the highest mandated KRA. For teachers, the plus factor shall be limited to work/activities, which contribute to the teaching-learning process. 44. Determining the Overall Rating for Accomplishments. The overall rating/assessment for the accomplishments shall fall within the following adjectival ratings and shall be in three (3) decimal points: Table 3. Adjectival Ratings RANGE ADJECTIVAL RATING 4.500-5.000 Outstanding 3.500-4.499 Very Satisfactory 2.500-3.499 Satisfactory 1.500-2.499 Unsatisfactory below 1.499 Poor 45. Reaching Agreement. Upon determining the overall rating for the actual accomplishments and results, the rater and the ratee shall reach an agreement by signing the OPCRF and IPCRF. The average rating of individual staff members should not go higher than the collective performance assessment of the office. 46. Assessing the Competencies. The rater shall discuss with the ratee the set of competencies observed during the performance cycle. The competencies shall not be reflected in the final rating. Competencies shall be monitored for developmental purposes. In evaluating the individualās demonstration of competencies, the rating scale in Table 4 shall apply: Table 4. The DepEd Competencies Scale SCALE DEFINITION 5 Role model 4 Consistently demonstrates 3 Most of the time demonstrates 2 Sometimes demonstrates 1 Rarely demonstrates 5 (role model) ā all competency indicators 4 (consistently demonstrates) ā four competency indicators 3 (most of the time demonstrates) ā three competency indicators 2 (sometimes demonstrates) ā two competency indicators 1 (rarely demonstrates) ā one competency indicator D. Phase IV: Performance Rewarding and Development Planning 47. The results of the performance review and evaluation shall be used in performance rewarding and development planning. This phase shall be done after Phase III. 48. The rater shall discuss and provide qualitative comments, observations and recommendations in the individual employeeās performance commitment, competency assessment and significant incidents which shall be used for training and professional development. These can be written under the strengths and development needs column of the Part IV-Development Plans of the IPCRF. 49. The rater and the ratee shall identify and discuss the individualās strengths and development needs, and reflect them in the Part IV-Development Plans of the IPCRF. The competencies which the ratee demonstrated consistently and the areas, where the ratee meet or exceed expectations shall be referred to as the rateeās strengths. The competencies, which the ratee rarely demonstrates and the areas where the ratee has room for improvement and has not met the expectations, shall be identified as the rateeās development needs. Make a situational SOLO-based questions in the context of school leadership
She went by the name of Belisa Crepusculario, not because she had been baptized with that name or given it by her mother, but because she herself had searched until she found the poetry of "beauty" and "twilight" and cloaked herself in it. She made her living selling words. She journeyed through the country from the high cold mountains to the burning coasts, stopping at fairs and in markets where she set up four poles covered by a canvas awning under which she took refuge from the sun and rain to minister to her customers. She did not have to peddle her merchandise because from having wandered far and near, everyone knew who she was. Some people waited for her from one year to the next, and when she appeared in the village with her bundle beneath her arm, they would form a line in front of her stall. Her prices were fair. For five centavos she delivered verses from memory, for seven she improved the quality of dreams, for nine she wrote love letters, for twelve she invented insults for irreconcilable enemies. She also sold stories, not fantasies but long, true stories she recited at one telling, never skipping a word. This is how she carried news from one town to another. People paid her to add a line or two: our son was born, so-and-so died, our children got married, the crops burned in the field. Wherever she went a small crowd gathered around to listen as she began to speak, and that was how they learned about each others' doings, about distant relatives, about what was going on in the civil war. To anyone who paid her fifty centavos in trade, she gave the gift of a secret word to drive away melancholy. It was not the same word for everyone, naturally, because that would have been collective dece it. Each person received his or her own word, with the assurance that no one else would use it that way in this universe or the Beyond. Belisa Crepusculario had been born into a family so poor they did not even have names to give their children. She came into the world and grew up in an inhospitable land where some years the rains became avalanches of water that bore everything away before them and others when not a drop fell from the sky and the sun swelled to fill the horizon and the world became a desert. Until she was twelve, Belisa had no occupation or virtue other than having withstood hunger and the exhaustion of centuries. During one interminable drought, it fell to her to bury four younger brothers and sisters, when she realized that her turn was next, she decided to set out across the 2 plains in the direction of the sea, in hopes that she might trick death along the way. The land was eroded, split with deep cracks, strewn with rocks, fossils of trees and thorny bushes, and skeletons of animals bleached by the sun. From time to time she ran into families who, like her, were heading south, following the mirage of water. Some had begun the march carrying their belongings on their back or in small carts, but they could barely move their own bones, and after a while they had to abandon their possessions. They dragged themselves along painfully, their skin turned to lizard hide and their eyes burned by the reverberating glare. Belisa greeted them with a wave as she passed, but she did not stop, because she had no strength to waste in acts of compassion. Many people fell by the wayside, but she was so stubborn that she survived to cross through that hell and at long last reach the first trickles of water, fine, almost invisible threads that fed spindly vegetation and farther down widened into small streams and marshes. Belisa Crepusculario saved her life and in the process accidentally discovered writing. In a village near the coast, the wind blew a page of newspaper at her feet. She picked up the brittle yellow paper and stood a long while looking at it, unable to determine its purpose, until curiosity overcame her shyness. She walked over to a man who was washing his horse in the muddy pool where she had quenched her thirst. "What is this?" she asked. "The sports page of the newspaper," the man replied, concealing his surprise at her ignorance. The answer astounded the girl, but she did not want to seem rude, so she merely inquired about the significance of the fly tracks scattered across the page. "Those are words, child. Here it says that Fulgencio Barba knocked out El Negro Tiznao in the third round." That was the day Belisa Crepusculario found out that words make their way in the world without a master, and that anyone with a little cleverness can appropriate them and do business with them. She made a quick assessment of her situation and concluded that aside from becoming a prostitute or working as a servant in the kitchens of the rich there were few occupations she was qualified for. It seemed to her that selling words would be an honorable alternative. From that moment on, she worked at that profession, and was never tempted by any other. At the beginning, she offered her merchandise unaware that words could be written outside of newspapers. When she learned otherwise, she calculated the infinite possibilities of her trade and with her savings paid a priest twenty pesos to teach her to read and write, with her three 3 remaining coins she bought a dictionary. She poured over it from A to Z and then threw it into the sea, because it was not her intention to defraud her customers with packaged words. One August morning several years later, Belisa Crepusculario was sitting in her tent in the middle of a plaza, surrounded by the uproar of market day, selling legal arguments to an old man who had been trying for sixteen years to get his pension. Suddenly she heard yelling and thudding hoofbeats. She looked up from her writing and saw, first, a cloud of dust, and then a band of horsemen come galloping into the plaza. They were the Colonel's men, sent under orders of El Mulato, a giant known throughout the land for the speed of his knife and his loyalty to his chief. Both the Colonel and El Mulato had spent their lives fighting in the civil war, and their names were ineradicably linked to devastation and calamity. The rebels swept into town like a stampeding herd, wrapped in noise, bathed in sweat, and leaving a hurricane of fear in their trail. Chickens took wing, dogs ran for their lives, women and children scurried out of sight, until the only living soul left in the market was Belisa Crepusculario. She had never seen El Mulato and was surprised to see him walking toward her. "I'm looking for you," he shouted, pointing his coiled whip at her, even before the words were out, two men rushed her -- knocking over her canopy and shattering her inkwell -- bound her hand and foot, and threw her like a sea bag across the rump of El Mulato's mount. Then they thundered off toward the hills. Hours later, just as Belisa Crepusculario was near death, her heart ground to sand by the pounding of the horse, they stopped, and four strong hands set her down. She tried to stand on her feet and hold her head high, but her strength failed her and she slumped to the ground, sinking into a confused dream. She awakened several hours later to the murmur of night in the camp, but before she had time to sort out the sounds, she opened her eyes and found herself staring into the impatient glare of El Mulato, kneeling beside her. "Well, woman, at last you've come to," he said. To speed her to her senses, he tipped his canteen and offered her a sip of liquor laced with gunpowder. She demanded to know the reason for such rough treatment, and El Mulato explained that the Colonel needed her services. He allowed her to splash water on her face, and then led her to the far end of the camp where the most feared man in all the land was lazing in a hammock strung between two trees. She could not see his face, because he lay in the deceptive shadow of the leaves and the indelible shadow of all his years as a bandit, but she imagined from the way his 4 gigantic aide addressed him with such humility that he must have a very menacing expression. She was surprised by the Colonel's voice, as soft and well-modulated as a professor's. "Are you the woman who sells words?" he asked. "At your service," she stammered, peering into the dark and trying to see him better. The Colonel stood up, and turned straight toward her. She saw dark skin and the eyes of a ferocious puma, and she knew immediately that she was standing before the loneliest man in the world. "I want to be President," he announced. The Colonel was weary of riding across that godforsaken land, waging useless wars and suffering defeats that no subterfuge could transform into victories. For years he had been sleeping in the open air, bitten by mosquitoes, eating iguanas and snake soup, but those minor inconveniences were not why he wanted to change his destiny. What truly troubled him was the terror he saw in people's eyes. He longed to ride into a town beneath a triumphal arch with bright flags and flowers everywhere, he wanted to be cheered, and be given newly laid eggs and freshly baked bread. Men fled at the sight of him, children trembled, and women miscarried from fright, he had had enough, and so he had decided to become President. El Mulato had suggested that they ride to the capital, gallop up to the Palace, and take over the government, the way they had taken so many other things without anyone's permission. The Colonel, however, did not want to be just another tyrant, there had been enough of those before him and, besides, if he did that, he would never win people's hearts. It was his aspiration to win the popular vote in the December elections. "To do that, I have to talk like a candidate. Can you sell me the words for a speech?" the Colonel asked Belisa Crepusculario. She had accepted many assignments, but none like this. She did not dare refuse, fearing that El Mulato would shoot her between the eyes, or worse still, that the Colonel would burst into tears. There was more to it than that, however, she felt the urge to help him because she felt a throbbing warmth beneath her skin, a powerful desire to touch that man, to fondle him, to clasp him in her arms. All night and a good part of the following day, Belisa Crepusculario searched her repertory for words adequate for a presidential speech, closely watched by El Mulato, who could not take his eyes from her firm wanderer's legs and virginal breasts. She discarded harsh, cold words, words 5 that were too flowery, words worn from abuse, words that offered improbable promises, untruthful and confusing words, until all she had left were words sure to touch the minds of men and women's intuition. Calling upon the knowledge she had purchased from the priest for twenty pesos, she wrote the speech on a sheet of paper and then signaled El Mulato to untie the rope that bound her ankles to a tree. He led her once more to the Colonel, and again she felt the throbbing anxiety that had seized her when she first saw him. She handed him the paper and waited while he looked at it, holding it gingerly between thumbs and fingertips. "What the shit does this say," he asked finally. "Don't you know how to read?" "War's what I know," he replied. She read the speech aloud. She read it three times, so her client could engrave it on his memory. When she finished, she saw the emotion in the faces of the soldiers who had gathered round to listen, and saw that the Colonel's eyes glittered with enthusiasm, convinced that with those words the presidential chair would be his. "If after they've heard it three times, the boys are still standing there with their mouths hanging open, it must mean the thing's damn good, Colonel" was El Mulato's approval. "All right, woman. How much do I owe you?" the leader asked. "One peso, Colonel." "That's not much," he said, opening the pouch he wore at his belt, heavy with proceeds from the last foray. "The peso entitles you to a bonus. I'm going to give you two secret words," said Belisa Crepusculario. "What for?" She explained that for every fifty centavos a client paid, she gave him the gift of a word for his exclusive use. The Colonel shrugged. He had no interest at all in her offer, but he did not want to be impolite to someone who had served him so well. She walked slowly to the leather stool where he was sitting, and bent down to give him her gift. The man smelled the scent of a mountain cat issuing from the woman, a fiery heat radiating from her hips, he heard the terrible whisper of her hair, and a breath of sweetmint murmured into his ear the two secret words that were his alone. "They are yours, Colonel," she said as she stepped back. "You may use them as much as you 6 please." El Mulato accompanied Belisa to the roadside, his eyes as entreating as a stray dog's, but when he reached out to touch her, he was stopped by an avalanche of words he had never heard before; believing them to be an irrevocable curse, the flame of his desire was extinguished. During the months of September, October, and November the Colonel delivered his speech so many times that had it not been crafted from glowing and durable words it would have turned to ash as he spoke. He travelled up and down and across the country, riding into cities with a triumphal air, stopping in even the most forgotten villages where only the dump heap betrayed a human presence, to convince his fellow citizens to vote for him. While he spoke from a platform erected in the middle of the plaza, El Mulato and his men handed out sweets and painted his name on all the walls in gold frost. No one paid the least attention to those advertising ploys; they were dazzled by the clarity of the Colonel's proposals and the poetic lucidity of his arguments, infected by his powerful wish to right the wrongs of history, happy for the first time in their lives. When the Candidate had finished his speech, his soldiers would fire their pistols into the air and set off firecrackers, and when finally they rode off, they left behind a wake of hope that lingered for days on the air, like the splendid memory of a comet's tail. Soon the Colonel was the favorite. No one had ever witnessed such a phenomenon: a man who surfaced from the civil war, covered with scars and speaking like a professor, a man whose fame spread to every corner of the land and captured the nation's heart. The press focused their attention on him. Newspapermen came from far away to interview him and repeat his phrases, and the number of his followers and enemies continued to grow. "We're doing great, Colonel," said El Mulato, after twelve successful weeks of campaigning. But the Candidate did not hear. He was repeating his secret words, as he did more and more obsessively. He said them when he was mellow with nostalgia; he murmured them in his sleep; he carried them with him on horseback; he thought them before delivering his famous speech; and he caught himself savoring them in his leisure time. And every time he thought of those two words, he thought of Belisa Crepusculario, and his senses were inflamed with the memory of her feral scent, her fiery heat, the whisper of her hair, and her sweetmint breath in his ear, until he began to go around like a sleepwalker, and his men realized that he might die before he ever sat in the presidential chair. "What's got hold of you, Colonel," El Mulato asked so often that finally one day his chief broke 7 down and told him the source of his befuddlement: those two words that were buried like two daggers in his gut. "Tell me what they are and maybe they'll lose their magic," his faithful aide suggested. "I can't tell them, they're for me alone," the Colonel replied. Saddened by watching his chief decline like a man with a death sentence on his head, El Mulato slung his rifle over his shoulder and set out to find Belisa Crepusculario. He followed her trail through all that vast country, until he found her in a village in the far south, sitting under her tent reciting her rosary of news. He planted himself, spraddle-legged, before her, weapon in hand. "You! You're coming with me," he ordered. She had been waiting. She picked up her inkwell, folded the canvas of her small stall, arranged her shawl around her shoulders, and without a word took her place behind El Mulato's saddle. They did not exchange so much as a word in all the trip; El Mulato's desire for her had turned into rage, and only his fear of her tongue prevented his cutting her to shreds with his whip. Nor was he inclined to tell her that the Colonel was in a fog, and that a spell whispered into his ear had done what years of battle had not been able to do. Three days later they arrived at the encampment, and immediately, in view of all the troops, El Mulato led his prisoner before the Candidate. "I brought this witch here so you can give her back her words, Colonel," El Mulato said, pointing the barrel of his rifle at the woman's head. "And then she can give you back your manhood." The Colonel and Belisa Crepusculario stared at each other, measuring one another from a distance. The men knew then that their leader would never undo the witchcraft of those accursed words, because the whole world could see the voracious-puma eyes soften as the woman walked to him and took his hand in hers. Copyright Ā© 1989 by Isabel Allende From The Stories of Eva Luna, Translated by Margaret Sayers Peden
Some Arctic Dinos Lived in Herds
By Sid Perkins
Just as interesting, however, is how this was discovered. Scientists didnāt look at a single fossil bone.
Instead, they analyzed a large number of preserved footprints on a mountainside located toward the
southern end of central Alaska.
Anthony Fiorillo works at the Perot Museum of Nature and Science in Dallas, Texas. As a vertebrate
paleontologist, he studies the fossils of creatures with backbones. In 2007, he was part of a research
team exploring Denali National Park. āWe rounded the corner and there they were,ā he recalls.
Thousands of footprints had been preserved in stone. āIt was amazing.ā
Dinosaurs died out more than 65 million years ago (not
counting birds, their modern-day relatives). So, itās a bit
surprising that scientists know so much about these
ancient creatures. Now, a new study reveals that a certain
type of duckbilled dinosaur lived in the Arctic year-round.
These animals also traveled in herds that included many
age groups, they find. The creatures even appear to have
gone through a āteenage growth spurt.ā
Those tracks pepper a steep patch of exposed rock about twice as
long as a football field and up to 60 meters (roughly 200 feet) wide.
They sit at least 160 kilometers (100 miles) north of the Gulf of Alaska.
Between 69 million and 72 million years ago, that now-rocky material
was muddy sediment on a floodplain near a seacoast, Fiorillo explains.
The hadrosaurs walked across the squishy mud. Later, the footprints
they left turned to stone.
Previous studies suggested adult duckbills took care of their young,
says Fiorillo. The new evidence that these dinosaurs truly traveled in
herds with multiple age groups confirms that parents cared for their
young well beyond the time they left the nest, his team concludes. The
researchers published their findings June 30 in Geology.
Ā© Science News for Students
Thousands of tracks cover this
rocky mountainside in Alaskaās
Denali National Park. They
provide a wealth of information
about the size, age and lifestyle
of certain dinosaurs.
COURTESY OF PEROT MUSEUM OF
NATURE AND SCIENCE
EVIDENCE FOR HERDS O F DINOSAURS
Small meat-eating dinosaurs called theropods had left behind a few of the tracks that Fiorilloās team
found in Denali. Birds had left some others. But the vast majority came from creatures called
hadrosaurs. These large plant-eating duckbilled dinosaurs had been quite common during the
Cretaceous Period. That helps explain one of their nicknames: ācattle of the Cretaceous.ā
For the new study, the researchers focused only on the hadrosaur tracks. More than half of the
footprints were preserved so well that they had clear impressions of the skin on the dinosaursā feet.
Most tracks had a similar level of preservation. That suggests all were probably left within a short
period. Other fossils in the nearby rocks, including insect burrows, suggest these hadrosaurs had left
their footprints during the summer. These are trace fossils ā evidence of ancient life other than a
preserved carcass or bone.
At the time these dinosaurs lived, Fiorillio says, the average temperature in the warmest months was
between 10° and 12° Celsius (50° and 54° Fahrenheit). Thatās about what conditions are like today
along the border between Canada and the lower 48 U.S. states, he notes.
The team measured a large sample of the duckbillsā footprints. They fell into four distinct size ranges.
The largest tracks, presumably made by adults, measured about 64 centimeters (25 inches) across. The
smallest tracks, 8 centimeters (3 inches) wide, were likely left by young duckbills. They would have
been no more than a year old. Tracks of two other size groups were probably made by juveniles and
near-adults.
These data suggest the community of hadrosaurs included four different age groups.
Ā© Science News for Students
A hadrosaur footprint made
roughly 70 million years ago. For
scale, the long blue bar at right is
10 centimeters long; each small
blue or white bar measures 1
centimeter.
COURTESY OF PEROT MUSEUM OF NATURE
AND SCIENCE
Ā© Science News for Students
THESE DINOSAURS DIDNāT MIGRATE
About 84 percent of the tracks sampled for the new study had been left by older hadrosaurs ā adults or
near-adults. Roughly 13 percent came from the youngest members of the herd. And a mere 3 percent
came from herd members considered to be juveniles, says Fiorillo. The rarity of tracks by these tweens
suggests that the young of this species had a rapid growth spurt. If true, they would have spent relatively
little time at this vulnerable size ā and therefore left very few tracks.
āWhatās really neat is how many small tracks there are,ā notes Anthony Martin. An ichnologist ā or
expert in trace fossils ā he works at Emory University in Atlanta, Ga.
Other scientists had analyzed fossil bones from duckbills. These studies had hinted that the equivalent of
adolescent hadrosaurs would have experienced growth spurts. But the new findings are āthe best
evidence that Iāve seen,ā says Eric Snively. Heās a vertebrate paleontologist at the University of Wisconsin-
La Crosse. āThis is a great study,ā he adds, āand further evidence that juvenile hadrosaurs grew up in an
eye-blink.ā
Also previously, researchers had proposed that Arctic dinosaurs migrated farther south for the winter.
Thatās because even if the region was much warmer than it is today, nights in the high Arctic would have
been 24 hours long. So, with no sunshine for several months, Alaska would have had long periods of very
bleak, chilly weather.
But finding juveniles in the herd
strongly suggests that these
dinosaurs remained in the Arctic all
year. Thatās because adolescents and
preadolescents wouldnāt have had
the strength or stamina to make
those long treks, Fiorillo maintains.
Field work is often harsh. Paleontologists studying the dinosaur
footprints here on an Alaskan mountainside sometimes worked
in cold and fog.
COURTESY OF PEROT MUSEUM OF NATURE AND SCIENCE
Ā© Science News for Students
The presence of very young dinosaurs might have been expected, he notes: If this were a nesting region,
the babies would have hatched sometime just before summer. And remember, thatās when these tracks
were left. But that wouldnāt explain the juveniles, he says.
The teamās findings āsuggest that these dinosaurs were overwintering in Alaska somehow,ā says Snively.
At the time, the average temperature in the region remained above freezing even during the winter, he
notes. But, he adds, āthis study raises interesting issues about how the dinosaurs could live in the region
when it was pretty dark for several months at a time.ā
Introduction to Hedging Instruments: Forwards, Futures, Options, and Swaps Hedging instruments are financial tools used by businesses and investors to mitigate risk. These instruments help protect against adverse price movements in assets such as commodities, currencies, interest rates, or securities. The four main hedging instruments are forwards, futures, options, and swaps. 1. Forwards A forward contract is a customised agreement between two parties to buy or sell an asset at a predetermined price on a specified future date. Key Characteristics: Over-the-counter (OTC): Traded directly between parties, not on an exchange. Customisation: Can be tailored to suit the needs of the parties involved. Settlement: Occurs at the end of the contract, which may involve physical delivery or cash settlement. Risk: Forwards carry counter-party risk, as there is a possibility one party may default. Example: A company that needs to import raw materials in six months may enter into a forward contract to lock in the current price, avoiding the risk of price increases. 2. Futures A futures contract is similar to a forward, but it is standardised and traded on an exchange. This standardisation eliminates counter-party risk. Key Characteristics: Standardised: Contract size, expiration, and other terms are fixed by the exchange. Mark-to-market: Gains and losses are settled daily. Liquidity: Futures are highly liquid because they are traded on exchanges. Regulation: As they are traded on formal exchanges, they are more regulated than forwards. Example: A wheat farmer may sell futures contracts to hedge against a possible decline in wheat prices before harvest. 3. Options Options provide the right, but not the obligation, to buy or sell an asset at a specified price on or before a certain date. There are two types of options: call options and put options. Call Option: Gives the holder the right to buy an asset at a predetermined price. Put Option: Gives the holder the right to sell an asset at a predetermined price. Key Characteristics: Premium: The buyer pays a premium upfront to obtain the option. Limited Risk: The maximum loss is limited to the premium paid. Flexibility: Options can be used for speculative or hedging purposes. Example: An investor holding stocks may buy a put option to protect against potential declines in the stock's price. 4. Swaps A swap is a contract in which two parties agree to exchange cash flows or liabilities over a specific period. The most common types are interest rate swaps and currency swaps. Key Characteristics: Customizable: Like forwards, swaps are often tailored to meet the needs of the parties involved. Counterparty Risk: Swaps are typically OTC instruments, exposing parties to default risk. Common Uses: Used to manage interest rate risk or currency risk. Example: A company with a variablerate loan may enter into an interest rate swap to exchange its variable payments for fixedrate payments, thus locking in stable costs. Hedging instruments are essential for managing financial risk in volatile markets. Each instrument serves different purposes, with varying levels of complexity, risk, and customization. Whether through forwards, futures, options, or swaps, businesses can better plan for the future by reducing exposure to uncertain price fluctuations. Hedging Strategies for Market Risk, Credit Risk, and Currency Risk 1. Hedging Strategies for Market Risk Market risk (also known as systematic risk) arises from fluctuations in asset prices, such as stocks, bonds, commodities, and interest rates, due to economic factors or market volatility. Key Hedging Instruments for Market Risk: Derivatives (Options, Futures, and Forwards): These instruments allow investors to hedge against unfavorable price movements in stocks, commodities, or interest rates. Example: An investor holding a large stock portfolio might buy a put option to protect against a potential market downturn. If the market declines, the put option increases in value, offsetting losses in the portfolio. Short Selling: Investors can sell borrowed assets with the expectation of buying them back at a lower price, profiting from the decline. Example: A fund manager expecting a market decline may short sell stocks to hedge a portfolio against losses. Common Hedging Strategies: Portfolio Diversification: Reducing market risk by spreading investments across various asset classes (stocks, bonds, commodities) and sectors. Using Index Futures: Large portfolios can be hedged using index futures that track the performance of the overall market. If the market declines, profits from the short position in the futures contract will offset losses in the portfolio. Risk Parity: Allocating assets based on the level of risk rather than the dollar amount invested, balancing risk exposure across asset classes. 2. Hedging Strategies for Credit Risk Credit risk refers to the possibility that a borrower will default on a debt obligation. This is especially important for banks, lenders, and institutions dealing with bonds and loans. Key Hedging Instruments for Credit Risk: Credit Default Swaps (CDS): A financial derivative where the buyer of a CDS pays a premium to the seller in exchange for protection against a default on a loan or bond. Example: A bank holding corporate bonds can buy a CDS to ensure they are compensated if the issuing company defaults. Collateralised Debt Obligations (CDOs): These instruments pool together various debt instruments and allow risk to be distributed among multiple investors. Credit Insurance: Companies may use insurance to protect against the risk of a customer defaulting on payments. Common Hedging Strategies: Diversification of Loan Portfolio: Spreading out credit exposures across various industries, geographies, and borrower profiles reduces the overall risk of default. Tightening Lending Standards: Limiting exposure to highrisk borrowers by implementing stringent credit assessments. AssetBacked Securities: Banks can sell loans or bonds packaged as assetbacked securities to reduce their exposure to credit risk. 3. Hedging Strategies for Currency Risk Currency risk (or exchange rate risk) arises from fluctuations in foreign exchange rates, which can affect companies involved in international trade or with investments in foreign countries. Key Hedging Instruments for Currency Risk: Forward Contracts: A firm agrees to exchange a specified amount of currency at a predetermined exchange rate on a future date. Example: A U.S. exporter expecting payment in euros might enter into a forward contract to sell euros and lock in a favorable exchange rate. Currency Options: These give the right, but not the obligation, to buy or sell currency at a specific price. Example: A U.S.based company buying goods from Japan might buy a call option on the yen to hedge against the risk of yen appreciation. Currency Swaps: Two parties exchange interest payments and principal in different currencies to hedge against exchange rate fluctuations. Common Hedging Strategies: Natural Hedging: Companies can offset currency risk by balancing foreign revenue with costs in the same currency. For example, if a company generates revenue in euros, it can also incur expenses in euros, reducing exposure to exchange rate fluctuations. Multi-Currency Invoicing: Firms can invoice in their home currency, shifting the currency risk to the buyer. Currency Diversification: Holding a diversified basket of currencies can reduce exposure to large fluctuations in any one currency. Effective hedging strategies are crucial for managing various types of risks in financial markets. Market risk can be managed using instruments like futures and options, while credit risk can be mitigated through diversification and credit derivatives. Currency risk, often faced by multinational firms, can be hedged using forward contracts, options, or swaps. Each strategy helps firms and investors protect their portfolios, ensure financial stability, and reduce the impact of adverse movements in the financial markets. Portfolio Risk Management Techniques: Diversification, Asset Allocation, and Risk Budgeting Managing risk is a fundamental aspect of portfolio management. Investors use various techniques to control and reduce the risks inherent in investing. Three key techniques used in portfolio risk management are diversification, asset allocation, and risk budgeting. Each of these techniques helps in mitigating potential losses while aiming to achieve the desired return. 1. Diversification Diversification is a risk management strategy that involves spreading investments across different assets, sectors, or geographic regions to reduce exposure to any single risk. The idea is that different assets perform differently under various market conditions, so losses in one investment can be offset by gains in others. Key Benefits of Diversification: Reduction of Unsystematic Risk: Unsystematic risk, which is unique to a specific company or industry, can be reduced by holding a variety of investments that respond differently to market conditions. Improved Stability: A diversified portfolio is less volatile, as the negative performance of one asset can be balanced by the positive performance of others. Methods of Diversification: Across Asset Classes: Investing in a mix of asset classes such as stocks, bonds, commodities, and real estate. Example: A portfolio with 60% equities, 30% bonds, and 10% commodities is more diversified than one solely consisting of stocks. Within Asset Classes: Diversifying within a single asset class (e.g., holding stocks from different sectors like technology, healthcare, and energy). Geographic Diversification: Investing in assets across various countries or regions to mitigate country-specific risks. Example: Holding U.S. stocks along with emerging market equities can reduce risks related to a downturn in one country's economy. 2. Asset Allocation Asset allocation refers to the process of dividing investments among different asset classes (such as stocks, bonds, and cash) to align with an investor's risk tolerance, time horizon, and financial goals. Asset allocation plays a crucial role in portfolio risk management by determining the overall risk-return profile of the portfolio. Key Elements of Asset Allocation: Strategic Asset Allocation: A longterm approach that involves setting target allocations for different asset classes based on financial goals and risk tolerance. Example: A young investor with a longterm horizon might allocate 70% to stocks, 20% to bonds, and 10% to cash. Tactical Asset Allocation: A more active approach that involves adjusting the asset mix in response to short-term market conditions. Example: If the investor expects an economic downturn, they might temporarily reduce exposure to equities and increase exposure to bonds. Types of Asset Allocation Models: Conservative: Focuses on preserving capital with a larger allocation to bonds and cash (e.g., 20% stocks, 80% bonds). Balanced: A moderate risk approach with an equal focus on growth and income (e.g., 50% stocks, 50% bonds). Aggressive: Targets higher returns by investing predominantly in equities, accepting higher risk (e.g., 80% stocks, 20% bonds). Example of Asset Allocation: A 40 year old investor with moderate risk tolerance may allocate their portfolio as follows: 50% equities, 40% bonds, and 10% in alternative investments such as real estate or commodities. The equities provide growth potential, while the bonds and alternative assets offer stability and income. 3. Risk Budgeting Risk budgeting is a method of allocating risk across different components of a portfolio, rather than focusing solely on returns. The goal is to optimise the portfolioās risk-return profile by distributing risk in a way that aligns with the investorās objectives and risk tolerance. Key Concepts of Risk Budgeting: Risk Contribution: Each asset class or investment in the portfolio contributes a certain amount of risk (measured by metrics such as volatility or Value at Risk). Risk budgeting ensures that no single asset class dominates the overall risk of the portfolio. Example: A portfolio may contain 60% stocks and 40% bonds, but if the stocks are highly volatile, they may contribute 90% of the portfolio's risk. Target Risk: Investors set a maximum acceptable level of risk (e.g., a portfolio volatility of 10%) and allocate investments so that the total risk remains within this target. Techniques in Risk Budgeting: Risk Parity: Allocates risk evenly across asset classes, rather than allocating capital based solely on return expectations. Example: In a risk-parity portfolio, both bonds and stocks might be balanced in such a way that they contribute equally to the overall portfolio risk, even though the dollar investment in bonds may be larger due to their lower volatility. Value at Risk (VaR): This technique measures the potential loss in a portfolio over a specific time period, under normal market conditions, at a given confidence level. The risk budget ensures that the potential loss stays within acceptable limits. Example of Risk Budgeting: An investor targets an overall portfolio risk of 8% volatility. After analyzing the risk contribution of each asset class, they determine that equities, which currently make up 60% of the portfolio, contribute 70% of the risk. To adhere to the risk budget, the investor may reduce their equity exposure and increase their allocation to bonds or other less volatile assets. Diversification, asset allocation, and risk budgeting are complementary techniques used in portfolio risk management. Diversification reduces unsystematic risk by spreading investments across various assets. Asset allocation ensures that investments align with an investor's goals and risk tolerance. Risk budgeting focuses on managing the contribution of risk from each asset class to create a balanced and efficient portfolio. Together, these strategies help investors achieve a balance between risk and return, ensuring longterm portfolio stability. Risk Mitigation Through Insurance, Securitisation, and Other Financial Engineering Techniques Risk mitigation is a core objective in financial management, and various strategies can be employed to reduce or manage risks. Three major approaches are insurance, securitisation, and financial engineering techniques. Each of these methods helps firms and individuals transfer, reduce, or eliminate certain financial risks. 1. Insurance as a Risk Mitigation Tool Insurance is a traditional risk transfer method that protects against financial losses by shifting the risk to an insurance company in exchange for premium payments. It is widely used to mitigate various forms of risk, such as operational, liability, and property risks. Key Aspects of Insurance for Risk Mitigation: Risk Transfer: The insurer takes on the risk in exchange for a premium, thus protecting the insured party from unexpected financial losses. Indemnity: In the event of a loss, the insurance policy compensates the insured based on the terms of the contract. Customisable Coverage: Insurance policies can be tailored to address specific risks, such as property damage, business interruption, liability, or cyber risks. Types of Insurance for Businesses: Property and Casualty Insurance: Covers physical assets like buildings, machinery, and inventory from risks like fire, theft, or natural disasters. Liability Insurance: Protects businesses against legal liabilities arising from accidents, negligence, or professional errors. Business Interruption Insurance: Compensates for lost income if a business has to halt operations due to unforeseen events. Credit Insurance: Shields companies from losses due to the nonpayment of trade receivables. 2. Securitisation as a Risk Mitigation Technique Securitisation is a financial engineering process that involves pooling various financial assets (such as loans, mortgages, or receivables) and converting them into marketable securities. This process allows firms to transfer risk to investors, thereby reducing their exposure. Key Elements of Securitisation: Risk Transfer: By securitising assets, companies can transfer the risk of default or nonpayment to investors who purchase the securities. Liquidity Creation: Securitisation converts illiquid assets (like mortgages or loans) into liquid, tradeable securities, improving cash flow for the originating firm. Diversification of Risk: Pooling assets with different risk profiles reduces the impact of individual defaults, spreading the risk across multiple investors. Common Forms of Securitisation: MortgageBacked Securities (MBS): Pools of mortgages are bundled and sold as securities to investors, transferring the risk of mortgage defaults. Example: A bank that issues home loans can bundle those loans into MBS and sell them to investors, transferring the credit risk of potential defaults. Asset-Backed Securities (ABS): Similar to MBS, but backed by other types of assets like credit card receivables, auto loans, or student loans. Collateralised Debt Obligations (CDOs): Structured financial products that pool different types of debt, such as loans and bonds, and sell them as securities with varying risk levels. Example: A bank may issue a portfolio of auto loans and then pool these loans into an assetbacked security (ABS). The ABS is sold to investors, who take on the risk of loan defaults. By securitising the loans, the bank reduces its exposure to credit risk and generates immediate cash flow. 3. Financial Engineering Techniques for Risk Mitigation Financial engineering involves the use of complex financial instruments, derivatives, and structured products to manage or mitigate financial risks. These techniques allow firms to hedge against specific risks, optimize capital structure, and improve financial stability. Common Financial Engineering Techniques: Derivatives: Financial instruments like futures, forwards, options, and swaps are used to hedge against price fluctuations, interest rate changes, or currency movements. Example: A company with significant foreign exchange exposure may use currency forwards or options to hedge against exchange rate fluctuations, ensuring predictable cash flows. Options and Futures: Options: Provides the right (but not the obligation) to buy or sell an asset at a predetermined price, allowing firms to hedge against unfavorable price movements. Example: An airline company can buy options on jet fuel to hedge against rising fuel prices. Futures: Standardized contracts to buy or sell an asset at a set price on a future date, commonly used to hedge commodities or financial assets. Example: A wheat producer may use futures contracts to lock in a favorable price for its crop, hedging against a potential price drop. Swaps: These involve the exchange of cash flows between two parties, often used to manage interest rate risk or currency risk. Interest Rate Swaps: Firms can exchange floatingrate interest payments for fixedrate payments to hedge against rising interest rates. Currency Swaps: Used to hedge exchange rate risk in crossborder transactions by exchanging principal and interest payments in different currencies. Example: A company with a variablerate loan may enter into an interest rate swap to exchange its variable payments for fixedrate payments, locking in stable costs. Structured Products: These are customised financial instruments designed to achieve specific riskreturn objectives. They often combine derivatives with other securities to create tailored risk exposures. Example: A structured note that combines a bond with an embedded option, offering downside protection while allowing for potential upside linked to the performance of an equity index. Credit Derivatives: Tools like credit default swaps (CDS) allow investors to transfer credit risk to other parties. Example: A bondholder worried about a companyās potential default may purchase a CDS, which pays out in case of a default event. Example: A company may issue a bond with an embedded call option, allowing it to repurchase the bond if interest rates decline. This financial engineering tool enables the company to mitigate the risk of rising interest rates, reducing future borrowing costs. Risk mitigation through insurance, securitisation, and financial engineering offers businesses a variety of tools to manage and transfer risks. Insurance allows for the direct transfer of risk to an insurer, while securitisation helps companies offload risk by packaging and selling assets as securities. Financial engineering techniques, including derivatives, swaps, and structured products, provide sophisticated ways to hedge market, interest rate, and currency risks. Each approach helps organizations improve financial stability, enhance liquidity, and manage potential losses in a volatile market environment.
In a single domesticated grain seed, one might see the bud of great civilizations. The birth of agriculture was a turning point in humans' social development, as stable food supplies enabled people to transcend the constraints of food gained by hunting and gathering. After that, people were able to settle down and experience population booms. As one of the major areas around the globe where agriculture originated, China has contributed to the world's domesticated rice, millet, buckwheat and soybeans. Archaeological studies have unveiled that the planting of rice originated around 10,000 years ago in the lower reaches of the Yangtze River, leading to the eventual replacement there of hunting and gathering practices dating back 5,000 to 6,000 years. "It marked the formation of a rice-based agricultural society in the area," said Zhao Zhijun, an archaeologist at the Chinese Academy of Social Sciences. Archaeological studies of the origins of rice-based agriculture are an important part of a national project tracing the origins of Chinese civilization itself. President Xi Jinping has greatly valued the project. At a group study session of the Political Bureau of the Communist Party of China Central Committee on May 27, 2022, Xi, who is also general secretary of the CPC Central Committee, emphasized the significance of the project and the role that archaeological studies play in better understanding Chinese civilization. The project to trace the origins of Chinese civilization, in addition to finding signs of human activity more than 1 million years ago, has also proved that China's history includes 10,000 years of culture and more than 5,000 years of civilization. The project has provided clear knowledge of the origins and formation of Chinese civilization, the history of its development, the process of the formation and development of its pluralistic and integrated pattern, and the characteristics of the civilization and why it was formed in such a way, he added. This was not the first time that Xi emphasized the importance of the origin-tracing project. Since the 18th National Congress of the CPC in 2012, Xi has toured more than 100 historical and cultural locations and issued many instructions related to archaeology and the origin-tracing project. During the 23rd group study session of the Political Bureau of the CPC Central Committee in 2020, Xi called for giving more attention to archaeological research and letting historical facts speak for themselves. "This will provide strong support for our efforts to carry forward the best of traditional Chinese culture and increase our cultural confidence," said Xi. The origin-tracing project has been carried out since 2002. Its ongoing fifth phase, which started in 2020, involves the participation of more than 500 researchers from 29 institutes across the country. It primarily centers on several ancient capital sites, including the Liangzhu site in Hangzhou, Zhejiang province, the Taosi site in Xiangfen county, Shanxi province, the Shimao site in Shenmu, Shaanxi province, and the Erlitou site in Luoyang, Henan province, from 3,500 to 5,500 years ago, as well as other settlements mainly along the basins of the Yellow, Yangtze and Liaohe rivers. The project has also expanded to a wider geographic and chronological framework to decode how Chinese civilization emerged and how its diverse elements formed a unity. Excavation of the Liangzhu site, which is over 5,000 years old and is one of the major sites covered in the origin-tracing project, has yielded an inner city covering 3 million square meters and an outer city of 6.3 million sq m, making it the world's largest capital at the time. It also had a giant water control system, which contributed to the formation of a rice-based agricultural society. By calculating the earthwork volume, archaeologists found that building the entire ancient city, the water control system and Mojiaoshan ā a 10-meter-tall man-made terrace in the center of the city ā required 10,000 people working daily for seven-and-a-half years. The discoveries show that Liangzhu had a kingship able to organize people for large-scale public construction, and its social differentiation, emergence of the city concept and existence of a kingship prove that it became a civilized society, said Wang Wei, a veteran archaeologist at the Chinese Academy of Social Sciences. Significant topic Wang said that tracing the origins of a civilization is a significant topic in the research of human history. Over the years, the Chinese project has provided China's answer to how to define civilizations. In 2022, Xi commended the efforts and stressed that the project has made creative contributions to the research on tracing the origins of the world's civilizations. Wang said: "International academia has proposed three indispensable elements for a civilized society based on features of Mesopotamian and Egyptian civilizations: written characters, metallurgy and the city concept. But we can find that some of the three elements were absent in many ancient civilizations. For example, the Mayan civilization had no metallurgy, while the Incan civilization didn't have written characters." Western scholars believe that Chinese civilization began with the Yinxu Ruins in Anyang, Henan province, a capital of the late Shang Dynasty (c.16th century-11th century BC), based on the discovery of inscribed oracle bones from that time. However, Chinese archaeologists don't agree. With continued archaeological research, international academia now believes that places around the world can propose criteria for civilization based on their own ancient social development. China's archaeological studies have shaped the nation's criteria in defining a civilization: the development of productivity, an increase in population, the appearance of cities, social differentiation and the emergence of kingship and state. "These criteria are suitable for identifying other civilizations as well," said Wang. "Civilizations have in common the appearance of kingship and state. They are only different in the ways of imposing kingship and the forms of state." In China, kingship and state "were shown by exquisite jade and bronze ritual artifacts, grand palaces and magnificent mausoleums imitating aboveground palaces", he added. "In Mesopotamia and ancient Egypt, they were demonstrated through superb stone temples, pyramids and large-scale tombs." Multidisciplinary subject President Xi said in 2020 that archaeologists should work closely with researchers from other fields to make an interpretive analysis of material remains. Zhang Chi, a professor of archaeology at Peking University, said that since material remains are often the research focus of archaeological studies, these should not only be observed with the eyes, but also studied using scientific and technological tools. Therefore, from the perspective of research methods, archaeology is by nature a multidisciplinary subject, Zhang added.