Other Forms of Energy and Energy Change & Conservation

THE SOAR SYSTEM A solar system is a group of planets and other celestial bodies that revolve around a star. A solar nebula- a vast cloud of gas and dust, mostly hydrogen and helium. How the Solar System Form • COLLAPSE AND SPINNING DISK FORMATION - Gravity pulls material inward. The cloud flattens into a spinning disk due to conservation of angular momentum. • PROTOSTAR FORMATION- (BIRTH OF THE SUN). Material collects at the center, and begun to heat up. When it reaches to 10 million KELVIN, nuclear fusion begins. thus, SUN is born. • PLANETESIMALS AND PROTOPLANETS. Dust and gas in the disk stick together via static and gravitational forces. These form planetesimals, which grow into protoplanets collision and accretion. • PLANET FORMATION. Inner disk: too hot for gas rocky planets form Mercury, Venus, Earth, Mars. • PLANET FORMATION. Outer disk: gas and ice giants. Jupiter, Saturn, Uranus, Neptune • LEFTOVER DEBRIS. Remaining materials forms moon, asteroids, comets and dwarf planets. DIFFERENT HYPOTHESIS IN THE FORMATION OF SOLAR SYSTEM. 1. NEBULAR HYPOTHESIS- The Solar system formed from a rotating cloud of Gas and Dust (solar nebula). As it rotates conservation of angular momentum caused the cloud to flatten into a disk. the Sun formed at the center (DISK) while planets formed from the surrounding materials through acceleration. thus, it explains the coplanar and nearly circular orbit of the planets all planets orbits around the sun on the same flat, disk shaped plane. Proposed by Immanuel Kant in 1755 and Modified by Pierre Simon Laplace in 1756. PROTOPLANET HYPOTHESIS. The Solar system formed from a rotating cloud of Gas and Dust (solar nebula). As it rotates conservation of angular momentum caused the cloud to flatten into a disk. 2. Protoplanet hypothesis. Builds on the nebular model but focuses more on the role of planetesimals which then form into full planets. PROCESS: - Small solid particles stick together through collisions. As collisions takes place, it grows into kilometer-sized planetesimals. Gravitational interactions lead to the formation of planets. Lead to formation of steroids belts and varying planet sizes 3. Encounter hypothesis. States that the sun encountered a rogue star. The encounter led to the removal of hot gas from both stars due to their gravitational interaction. The hot gas then accumulated and formed the planets. The materials from the less dense rogue star formed the other planets, while that from the sun formed the inner planets. 4. TIDAL HYPOTHESIS. (also called the Tidal Theory) is an early scientific idea about how the solar system might have formed. Proposed by James Jeans and Harold Jeffreys. A massive star passed very close to the early Sun. The hot gas then accumulated and formed the planets. The materials from the less dense rogue star formed the other planets, while that from the sun formed the inner planets. Streams of hot gas were drawn out from the Sun in elongated shape. These streams eventually condensed and cooled, forming planets, moons, and other bodies in the solar system. 5. Not accepted theory. Later studies showed the streams of hot gas would disperse too quickly into space instead of condensing into planets. The theory also couldn’t explain the specific orbital patterns and compositions we see today. Modern science favors the Nebular Hypothesis, which explains solar system formation through the collapse of a rotating gas cloud. Earth as the only habitable planet 1. Right Distance from the Sun (The Goldilocks Zone). Not too hot, not too cold — just right for liquid water to exist. 2. Atmosphere with Oxygen. Earth has a mix of gases, especially oxygen, which most living things need to survive. 3. Liquid Water. Earth has oceans, rivers, and rain — water is essential for all life. 4. Magnetic Field. Earth’s magnetic field protects us from harmful solar radiation. 5. Stable Climate. The atmosphere and natural cycles keep temperatures and weather mostly stable over time. 6. Rich Resources. Earth has soil for growing food, minerals, and energy sources that support life and technology. Solar explorations 1. AUGUST 6, 2014. First space craft to orbit a comet (ROSETTA PROBE). Captures the comet photograph. -Comets have coma and tail as it approaches to the sun. 2. JULY 14, 2015. NASA’s New Horizons spacecraft made history by becoming the first spacecraft to fly by Pluto, giving us our first close-up look at the dwarf planet. First time visiting Pluto. Before this, Pluto was just a blurry dot in telescope images. Revealed a surprising world New Horizons showed mountains of ice, smooth plains, and a heart-shaped region called Tombaugh Regio. Changed what we knew. Scientists thought Pluto would be dull and frozen — instead, it turned out to be geologically active and incredibly complex. 3. SEPTEMBER 8, 2016. NASA launched OSIRIS-REx, the first U.S. mission to collect a sample from an asteroid and return it to Earth. Changed what we knew. Scientists thought Pluto would be dull and frozen — instead, it turned out to be geologically active and incredibly complex. OSIRIS-REx stands for: Origins, Spectral Interpretation, Resource Identification, Security–Regolith Explorer It was sent to study the asteroid Bennu, a near-Earth asteroid about 500 meters wide. Mission Goals: Collect a sample of surface material from Bennu Study the asteroid’s omposition, structure, and history. Mission Goals: Help scientists understand the origins of the solar system. Learn more about asteroids that could impact Earth. 4. August 12, 2018: Launch of NASA’s Parker Solar Probe, the first spacecraft to "touch" the Sun by flying through its outer atmosphere, called the corona. Mission Goal: To study the Sun up close and help scientists understand: How the solar wind (a stream of charged particles) is formed. Why the Sun’s corona is hotter than its surface. What causes solar storms that can affect Earth’s satellites and power grids. 5. November 26, 2018: NASA’s Insight Lander Touches Down on Mars. Its mission was focused on studying the interior of the Red Planet (crust, mantle, and core of the planet). Why the Sun’s corona is hotter than its surface. What causes solar storms that can affect Earth’s satellites and power grids 6. November 26, 2018: NASA’s Insight Lander Touches Down on Mars. Its mission was focused on studying the interior of the Red Planet (crust, mantle, and core of the planet) 7. JULY 30, 2020 PERSEVERANCE PROBE. Perseverance rover as part of the Mars 2020 mission aboard an Atlas V-541 rocket This marked a major step in Mars exploration. 8. DECEMBER 25, 2021-JAMES WEBB SPACE TELESCOPE. Investigate exoplanets’ atmospheres for signs of habitability. Observe the first galaxies formed after the Big Bang. Study the formation of stars and planetary systems. Look deeper into the infrared universe than ever before. RESULTS OF EXPLORATION • Evidence of Ancient Life-friendly Environment. • Sedimentary rocks formed in water-rich environments. • Signs of clay and carbonate minerals, which can preserve biosignatures (traces of past life). • Evidence of Ancient Life-friendly Environment. • Sedimentary rocks formed in water-rich environments. • Signs of clay and carbonate minerals, which can preserve biosignatures (traces of past life). • Evidence of Ancient Life-friendly Environment. • Sedimentary rocks formed in water-rich environments. • Signs of clay and carbonate minerals, which can preserve biosignatures (traces of past life).

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 portfolio’s risk-return profile by distributing risk in a way that aligns with the investor’s 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 company’s 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.

Cohesion and Adhesion Water molecules stick to each other as a result of hydrogen bond- ing. An attractive force that holds molecules of a single substance together is known as cohesion. Cohesion due to hydrogen bonding between water molecules contributes to the upward movement of water from plant roots to their leaves. Related to cohesion is the surface tension of water. The cohe- sive forces in water resulting from hydrogen bonds cause the mol- ecules at the surface of water to be pulled downward into the liquid. As a result, water acts as if it has a thin “skin” on its sur- face. You can observe water’s surface tension by slightly overfill- ing a drinking glass with water. The water will appear to bulge above the rim of the glass. Surface tension also enables small crea- tures such as spiders and water-striders to run on water without breaking the surface. Adhesion is the attractive force between two particles of differ- ent substances, such as water molecules and glass molecules. A related property is capillarity (KAP-uh-LER-i-tee), which is the attrac- tion between molecules that results in the rise of the surface of a liquid when in contact with a solid. Together, the forces of adhe- sion, cohesion, and capillarity help water rise through narrow tubes against the force of gravity. Figure 2-11 shows cohesion and adhesion in the water-conducting tubes in the stem of a flower. Temperature Moderation Water has a high heat capacity, which means that water can absorb or release relatively large amounts of energy in the form of heat with only a slight change in temperature. This property of water is related to hydrogen bonding. Energy must be absorbed to break hydrogen bonds, and energy is released as heat when hydrogen bonds form. The energy that water initially absorbs breaks hydro- gen bonds between molecules. Only after these hydrogen bonds are broken does the energy begin to increase the motion of the water molecules, which raises the temperature of the water. When the temperature of water drops, hydrogen bonds reform, which releases a large amount of energy in the form of heat. Therefore, during a hot summer day, water can absorb a large quantity of energy from the sun and can cool the air without a large increase in the water’s temperature. At night, the gradually cooling water warms the air. In this way, the Earth’s oceans stabilize global temperatures enough to allow life to exist. Water’s high heat capac- ity also allows organisms to keep cells at an even temperature despite temperature changes in the environment. As a liquid evaporates, the surface of the liquid that remains behind cools down. A relatively large amount of energy is absorbed by water during evaporation, which significantly cools the surface of the remaining liquid. Evaporative cooling prevents organisms that live on land from overheating. For example, the evaporation of sweat from a person’s skin releases body heat and prevents over- heating on a hot day or during strenuous activity. Adhesion Cohesion Hydrogen bonds Cohesion, adhesion, and capillarity contribute to the upward movement of water from the roots of plants. FIGURE 2–11 www.scilinks.org Topic: Hydrogen Bonding Keyword: HM60777 mb06se_cols03.qxd 5/18/07 10:47 AM Page 41 42 CHAPTER 2 Density of Ice Unlike most solids, which are denser than their liquids, solid water is less dense than liquid water. This property is due to the shape of the water molecule and hydrogen bonding. The angle between the hydrogen atoms is quite wide. So, when water forms solid ice, the angles in the molecules cause ice crystals to have large amounts of open space, as shown in Figure 2-12. This open space lattice structure causes ice to have a low density. Because ice floats on water, bodies of water such as ponds and lakes freeze from the top down and not the bottom up. Ice insulates the water below from the cold air, which allows fish and other aquatic crea- tures to survive under the icy surface.

CHARACTERISTICS OF LIFE The world is filled with familiar objects, such as tables, rocks, plants, pets, and automobiles. Which of these objects are living or were once living? What are the criteria for assigning something to the living world or the nonliving world? Biologists have established that living things share seven characteristics of life. These characteristics are organization and the presence of one or more cells, response to a stimulus (plural, stimuli), homeostasis, metabolism, growth and development, reproduction, and change through time. Organization and Cells Organization is the high degree of order within an organism’s internal and external parts and in its interactions with the living world. For example, compare an owl to a rock. The rock has a spe- cific shape, but that shape is usually irregular. Furthermore, differ- ent rocks, even rocks of the same type, are likely to have different shapes and sizes. In contrast, the owl is an amazingly organized individual, as shown in Figure 1-2. Owls of the same species have the same body parts arranged in nearly the same way and interact with the environment in the same way. Copyright © by Holt, Rinehart and Winston. All rights reserved. ORGANISM (Barn Owl) ORGAN (Owl’s Ear) TISSUE (Nervous Tissue Within the Ear) CELL (Nerve Cell) Every living organism has a level of organization. The different levels of organization for a complex multicellular organism, such as an owl, are shown in the figure below. FIGURE 1-2 THE SCIENCE OF LIFE 7 All living organisms, whether made up of one cell or many cells, have some degree of organization. A cell is the smallest unit that can perform all life’s processes. Some organisms, such as bacteria, are made up of one cell and are called unicellular (YOON-uh-SEL-yoo-luhr) organisms. Other organisms, such as humans or trees, are made up of multiple cells and are called multicellular (MUHL-ti-SEL-yoo-luhr) organisms. Complex multicellular organisms have the level of orga- nization shown in Figure 1-2. In the highest level, the organism is made up of organ systems, or groups of specialized parts that carry out a certain function in the organism. For example, an owl’s ner- vous system is made up of a brain, sense organs, nerve cells, and other parts that sense and respond to the owl’s surroundings. Organ systems are made up of organs. Organs are structures that carry out specialized jobs within an organ system. An owl’s ear is an organ that allows the owl to hear. All organs are made up of tissues. Tissues are groups of cells that have similar abilities and that allow the organ to function. For example, nervous tissue in the ear allows the ear to detect sound. Tissues are made up of cells. A cell must be covered by a membrane, contain all genetic information necessary for replication, and be able to carry out all cell functions. Within each cell are organelles. Organelles are tiny structures that carry out functions necessary for the cell to stay alive. Organelles contain biological molecules, the chemical compounds that provide physical structure and that bring about movement, energy use, and other cellular functions. All biological molecules are made up of atoms. Atoms are the simplest particle of an ele- ment that retains all the properties of a certain element. Response to Stimuli Another characteristic of life is that an organism can respond to a stimulus—a physical or chemical change in the internal or external environment. For example, an owl dilates its pupils to keep the level of light entering the eye constant. Organisms must be able to respond and react to changes in their environment to stay alive. ORGANELLE (Mitochondrion) BIOLOGICAL MOLECULE (Phospholipid) ATOM (Oxygen) cell from the Latin, cella meaning “small room,” or “hut” Word Roots and Origins www.scilinks.org Topic: Characteristics of Life Keyword: HM60257 mb06se_bios01.qxd 5/18/07 10:37 AM Page 7 8 CHAPTER 1 Homeostasis All living things, from single cells to entire organisms, have mecha- nisms that allow them to maintain stable internal conditions. Without these mechanisms, organisms can die. For example, a cell’s water content is closely controlled by the taking in or releas- ing of water. A cell that takes in too much water will rupture and die. A cell that doesn’t get enough water will also shrivel and die. Homeostasis (HOH-mee-OH-STAY-sis) is the maintenance of a stable level of internal conditions even though environmental conditions are constantly changing. Organisms have regulatory systems that maintain internal conditions, such as temperature, water content, and uptake of nutrients by the cell. In fact, multi- cellular organisms usually have more than one way of maintain- ing important aspects of their internal environment. For example, an owl’s temperature is maintained at about 40°C (104°F). To keep a constant temperature, an owl’s cells burn fuel to produce body heat. In addition, an owl’s feathers can fluff up in cold weather. In this way, they trap an insulating layer of air next to the bird’s body to maintain its body temperature. Metabolism Living organisms use energy to power all the life processes, such as repair, movement, and growth. This energy use depends on metabolism (muh-TAB-uh-LIZ-uhm). Metabolism is the sum of all the chemical reactions that take in and transform energy and materials from the environment. For example, plants, algae, and some bacteria use the sun’s energy to generate sugar molecules during a process called photosynthesis. Some organisms depend on obtaining food energy from other organisms. For instance, an owl’s metabolism allows the owl to extract and modify the chemi- cals trapped in its nightly prey and use them as energy to fuel activities and growth. Growth and Development All living things grow and increase in size. Some nonliving things, such as crystals or icicles, grow by accumulating more of the same material of which they are made. In contrast, the growth of living things results from the division and enlargement of cells. Cell division is the formation of two new cells from an existing cell, as shown in Figure 1-3. In unicellular organisms, the primary change that occurs following cell division is cell enlargement. In multi- cellular life, however, organisms mature through cell division, cell enlargement, and development. Development is the process by which an organism becomes a mature adult. Development involves cell division and cell differen- tiation, or specialization. As a result of development, an adult organism is composed of many cells specialized for different func- tions, such as carrying oxygen in the blood or hearing. In fact, the human body is composed of trillions of specialized cells, all of which originated from a single cell, the fertilized egg. This unicellular organism, Escherichia coli, inhabits the human intestines. E. coli reproduces by means of cell division, during which the original cell splits into two identical offspring cells. FIGURE 1-3 Observing Homeostasis Materials 500 mL beakers (3), wax pen, tap water, thermometer, ice, hot water, goldfish, small dip net, watch or clock with a second hand Procedure 1. Use a wax pen to label three 500 mL beakers as follows: 27°C (80°F), 20°C (68°F), 10°C (50°F). Put 250 mL of tap water in each beaker. Use hot water or ice to adjust the tem- perature of the water in each beaker to match the temperature on the label. 2. Put the goldfish in the beaker of 27°C water. Record the number of times the gills move in 1 minute. 3. Move the goldfish to the beaker of 20°C water. Repeat observations. Move the goldfish to the beaker of 10°C. Repeat observations. Analysis What happens to the rate at which gills move when the temp- erature changes? Why? How do gills help fish maintain homeostasis? Quick Lab mb06se_bios01.qxd 5/18/07 10:37 AM Page 8 THE SCIENCE OF LIFE 9 Reproduction All organisms produce new organisms like themselves in a process called reproduction. Reproduction, unlike other characteristics, is not essential to the survival of an individual organism. However, because no organism lives forever, reproduction is essential for the continuation of a species. Glass frogs, as shown in Figure 1-4, lay many eggs in their lifetime. However, only a few of the frogs’ off- spring reach adulthood and successfully reproduce. During reproduction, organisms transmit hereditary informa- tion to their offspring. Hereditary information is encoded in a large molecule called deoxyribonucleic acid, or DNA. A short segment of DNA that contains the instructions for a single trait of an organism is called a gene. DNA is like a large library. It contains all the books—genes—that the cell will ever need for making all the struc- tures and chemicals necessary for life. Hereditary information is transferred to offspring during two kinds of reproduction. In sexual reproduction, hereditary information recombines from two organisms of the same species. The resulting offspring are similar but not identical to their parents. For example, a male frog’s sperm can fertilize a female’s egg and form a single fer- tilized egg cell. The fertilized egg then develops into a new frog. In asexual reproduction, hereditary information from different organisms is not combined; thus the original organism and the new organism are genetically the same. A bacterium, for example, reproduces asexually when it splits into two identical cells. Change Through Time Although individual organisms experience many changes during their lifetime, their basic genetic characteristics do not change. However, populations of living organisms evolve or change through time. The ability of populations of organisms to change over time is important for survival in a changing world. This factor is also impor- tant in explaining the diversity of life-forms we see on Earth today.

CARBOHYDRATES Carbohydrates are organic compounds composed of carbon, hydrogen, and oxygen in a ratio of about one carbon atom to two hydrogen atoms to one oxygen atom. The number of carbon atoms in a carbohydrate varies. Some carbohydrates serve as a source of energy. Other carbohydrates are used as structural materials. Carbohydrates can exist as monosaccharides, disaccharides, or polysaccharides. Monosaccharides A monomer of a carbohydrate is called a monosaccharide (MAHN-oh-SAK-uh-RIED). A monosaccharide—or simple sugar— contains carbon, hydrogen, and oxygen in a ratio of 1:2:1. The gen- eral formula for a monosaccharide is written as (CH2O)n, where n is any whole number from 3 to 8. For example, a six-carbon mono- saccharide, (CH2O)6, would have the formula C6H12O6. The most common monosaccharides are glucose, fructose, and galactose, as shown in Figure 3-6. Glucose is a main source of energy for cells. Fructose is found in fruits and is the sweetest of the monosaccharides. Galactose is found in milk. Notice in Figure 3-6 that glucose, fructose, and galactose have the same molecular formula, C6H12O6, but differing structures. The different structures determine the slightly different properties of the three compounds. Compounds like these sugars, with a single chemical formula but different structural forms, are called isomers (IE-soh-muhrz). SECTION 2 OBJECTIVES ● Distinguish between monosaccharides, disaccharides, and polysaccharides. ● Explain the relationship between amino acids and protein structure. ● Describe the induced fit model of enzyme action. ● Compare the structure and function of each of the different types of lipids. ● Compare the nucleic acids DNA and RNA. VOCABULARY carbohydrate monosaccharide disaccharide polysaccharide protein amino acid peptide bond polypeptide enzyme substrate active site lipid fatty acid phospholipid wax steroid nucleic acid deoxyribonucleic acid (DNA) ribonucleic acid (RNA) nucleotide C HO H C H OH C OH H C CH2OH H C H OH O Glucose C OH C O H OH C OH H CH2OH C H CH2OH Fructose C H HO C OH H C OH H C CH2OH H C H OH O Galactose Glucose, fructose, and galactose have the same chemical formula, but their structural differences result in different properties among the three compounds. FIGURE 3-6 Copyright © by Holt, Rinehart and Winston. All rights reserved. 56 CHAPTER 3 Disaccharides and Polysaccharides In living things, two monosaccharides can combine in a condensa- tion reaction to form a double sugar, or disaccharide (die-SAK-e-RIED). For example in Figure 3-4, the monosaccharides fructose and glu- cose can combine to form the disaccharide sucrose. A polysaccharide is a complex molecule composed of three or more monosaccharides. Animals store glucose in the form of the polysaccharide glycogen. Glycogen consists of hundreds of glucose molecules strung together in a highly branched chain. Much of the glucose that comes from food is ultimately stored in your liver and muscles as glycogen and is ready to be used for quick energy. Plants store glucose molecules in the form of the polysaccha- ride starch. Starch molecules have two basic forms—highly branched chains that are similar to glycogen and long, coiled, unbranched chains. Plants also make a large polysaccharide called cellulose. Cellulose, which gives strength and rigidity to plant cells, makes up about 50 percent of wood. In a single cellu- lose molecule, thousands of glucose monomers are linked in long, straight chains. These chains tend to form hydrogen bonds with each other. The resulting structure is strong and can be broken down by hydrolysis only under certain conditions. PROTEINS Proteins are organic compounds composed mainly of carbon, hydrogen, oxygen, and nitrogen. Like most of the other biological macromolecules, proteins are formed from the linkage of monomers called amino acids. Hair and horns, as shown in Figure 3-7a, are made mostly of proteins, as are skin, muscles and many biological catalysts (enzymes). Amino Acids There are 20 different amino acids, and all share a basic structure. As Figure 3-7b shows, each amino acid contains a central carbon atom covalently bonded to four other atoms or functional groups. A single hydrogen atom, highlighted in blue in the illustration, bonds at one site. A carboxyl group, —COOH, highlighted in green, bonds at a second site. An amino group, —NH2, highlighted in yel- low, bonds at a third site. A side chain called the R group, high- lighted in red, bonds at the fourth site. The main difference among the different amino acids is in their R groups. The R group can be complex or it can be simple, such as the CH3 group shown in the amino acid alanine in Figure 3-7b. The differences among the amino acid R groups gives different proteins very different shapes. The different shapes allow pro- teins to carry out many different activities in living things. Amino acids are commonly shown in a simplified way such as balls, as shown in Figure 3-7c. (a) Many structures, such as hair and horns are made of proteins. (b) Proteins are made up of amino acids. Amino acids differ only in the type of R group (shown in red) they carry. Polar R groups can dissolve in water, but nonpolar R groups cannot. (c) Amino acids have complex structures, so, in this and other textbooks, they are often simplified into balls. FIGURE 3-7 (b) Alanine (an amino acid) (c) Simplified version of amino acid CH3 H N OH C C H O H (a) Copyright © by Holt, Rinehart and Winston. All rights reserved. BIOCHEMISTRY 57 H H N C C OH H O H CH3 H2O Glycine Alanine H N OH C C H O H H H N C C H O H CH3 N OH C C H O H (a) (b) (a) The peptide bond (shaded blue) that binds amino acids together to form a polypeptide results from a condensation reaction that produces water. (b) Poly- peptides are commonly shown as a string of balls in this textbook and elsewhere. Each ball represents an amino acid. FIGURE 3-8 Substrate Products Enzyme 1 2 3 In the induced fit model of enzyme action, the enzyme can attach only to a substrate (reactant) with a specific shape. The enzyme then changes and reduces the activation energy of the reaction so reactants can become products. The enzyme is unchanged and is available to be used again. 3 2 1 FIGURE 3-9 Dipeptides and Polypeptides Figure 3-8a shows how two amino acids bond to form a dipeptide (die-PEP-TIED). In this condensation reaction, the two amino acids form a covalent bond, called a peptide bond (shaded in blue in Figure 3-8a) and release a water molecule. Amino acids often form very long chains called polypeptides (PAHL-i-PEP-TIEDZ). Proteins are composed of one or more polypep- tides. Some proteins are very large molecules, containing hun- dreds of amino acids. Often, these long proteins are bent and folded upon themselves as a result of interactions—such as hydrogen bonding—between individual amino acids. Protein shape can also be influenced by conditions such as temperature and the type of solvent in which a protein is dissolved. For exam- ple, cooking an egg changes the shape of proteins in the egg white. The firm, opaque result is very different from the initial clear, runny material. Enzymes Enzymes—RNA or protein molecules that act as biological catalysts—are essential for the functioning of any cell. Many enzymes are proteins. Figure 3-9 shows an induced fit model of enzyme action. Enzyme reactions depend on a physical fit between the enzyme molecule and its specific substrate, the reactant being catalyzed. Notice that the enzyme has folds, or an active site, with a shape that allows the substrate to fit into the active site. An enzyme acts only on a specific substrate because only that substrate fits into its active site. The linkage of the enzyme and substrate causes a slight change in the enzyme’s shape. The change in the enzyme’s shape weakens some chemical bonds in the substrate, which is one way that enzymes reduce activation energy, the energy needed to start the reaction. After the reaction, the enzyme releases the products. Like any catalyst, the enzyme itself is unchanged, so it can be used many times. An enzyme may not work if its environment is changed. For example, change in temperature or pH can cause a change in the shape of the enzyme or the substrate. If such a change happens, the reaction that the enzyme would have catalyzed cannot occur.

LESSON 3 Characteristics of Living Things Learning Objectives • Describe each characteristic of life • Relate each characteristic of life with how first forms of life evolved What sets living things apart from nonliving things? Organisms are equipped with different characteristics that allow them to grow, adapt, survive, and perpetuate. These include the ability to metabolize, respond to stimuli, interact, and reproduce, among others What are the characteristics of life? Try to look at your surroundings and identify the living things that you see. You have probably identified a lot. Many scientists believe that there are more than 10 million kinds of living things that exist on Earth today. But the question is, how can something be considered living? There are certain characteristics that all living things exhibit: the characteristics of life. Living things are made up of cells. They metabolize, grow and develop, respond to stimulus, adapt to their environment, and reproduce. Living Things Are Made up of Cells All living things are made up of cells. Cells are the basic building blocks of all living things. Each cell contains materials that carry out basic life processes such as respiration. In the 1600s, an argument against the theory of spontaneous generation was made. Italian physician and biologist Francesco Redi disproved the theory that all living things come from nonliving things. Cells have different properties and characteristics. The cell theory describes the properties of all cells. There are three tenets of the cell theory: 1. The cell is the basic unit of life. 2. All living things are composed of one or more cells. 3. All cells arise from preexisting cells. The discovery of the cell is largely attributed to Robert Hooke. Upon examining a piece of cork using a microscope that he built, Hooke observed tiny compartments that he called "cells" (from the Latin word cella, meaning "little room"). Matthias Schleiden suggested that all structural parts of plants are made up of cells. In 1839, Theodore Schwann stated that along with plants, all animals were composed of cells. From these conclusions about plants and animals, advancement on the study of animal parts and functions began. In 1855, Rudolf Virchow included the idea that all cells came from preexisting cells. Some living things are made up of only single cells. Single-celled or unicellular organisms include bacteria, some protists, and some fungi. Even though composed of single cells, these organisms carry out all the functions necessary for life. Most living things such as animals and plants, are multicellular organisms. They are composed of many cells, which are grouped together and perform specific tasks in the body. In different organisms, cells also vary in sizes, shapes, parts, and functions. There are two kinds of organisms according to their cell structure, the prokaryotes and eukaryotes (figure 5-3). Prokaryotes are single-celled organisms that lack a membrane-bound nucleus, mitochondria, and all other organelles. Its name comes from the Greek words pro, which means "before," and karyon, which means "nut or kernel." Eukaryotes are organisms with cells that contain membrane-bound nucleus and other membrane-bound organelles. The nucleus of a eukaryotic cell contains the genetic material (DNA), enclosed by a nuclear envelope. Other membrane-bound organelles are mitochondria, Golgi apparatus, and chloroplast found in photosynthetic organisms such as algae and plants. There are also unicellular eukaryotes known as protozoa. All other eukaryotes are multicellular organisms, such as plants, animals, and fungi. Living Things Metabolize Essential chemical reactions in life can be best described as building up (anabolism) and breaking down (catabolism) processes. In anabolism, the substances needed by organisms to grow, store energy, and repair tissues are synthesized. In contrast in catabolism, some complex substances are broken down, releasing the energy stored in their molecules. This happens in food digestion. This chemical building up and breaking down processes are collectively called metabolism. Metabolism, from the Greek word metabole meaning "change," is the sum total of all the life-sustaining chemical reactions in living things. It allows living things to grow, maintain their structures and functions, and respond to stimuli. Living Things Grow and Develop Growth and development are not new concepts to many. In all living things, growth involves the increase in one's size or height. However, growth is not just an increase in physical structure. It also involves complex changes in an organism. Growth and development occur rapidly from younger stages of life to maturity. In humans, animals, and plants, distinct changes brought by growth and development can be dearly identified. Microorganisms such as bacteria also undergo growth and development until they reach their maximum size and maturity. A life span is the average length of time a aving thing can live. Living things have different life spans. Humans have average life spectancy of 60 to 70 years, while some plants, such as the narra trees, can live for more than 100. Living Things Respond to Stimuli All living things respond to stimuli the environment. This responsiveness Increases survivability. Stimulus (plural: uli) is any signal or change in he environment of an organism that produces a response or reaction from that organism. Responses to stimuli depend on an organism's need. Responding to stimuli also maintains homeostasis in living things. Homeostasis is the internal balance of a body system. This balance is needed for the proper function and regulation of the living thing's body. For example, when a person is in a warmer environment, the body sweats, keeping the body maintain a temperature suited for the normal function of the body. Living Things Interact No living thing can live alone. Interaction among organisms is simultaneously happening on Earth. From the smallest microorganisms to the biggest organism, and from the North Pole to the South Pole of Earth, all are connected in one living system. An ecosystem is formed when a community of organisms interacts with another community and with their environment. Many processes and interactions, such as in a feeding relationship, life cycle, and the exchange of gases between plants and animals, occur in the ecosystem. These are some of the important processes needed to maintain life on Earth. Living Things Reproduce The ability of living things to produce offspring of their kind is called reproduction. Reproduction is not an individual organism's need, rather, it is for the species' perpetuation. In some cases, animals become extinct because of their inability to reproduce their kind. Higher forms of plants and animals reproduce through sexual reproduction. Sexual reproduction involves the union of sex cells or gametes-the egg cell from a female organism and the sperm cell from a male organism. This union gives rise to a new individual with characteristics or traits from both parents. Other simple organisms, such as bacteria and plants, can reproduce asexually. These organisms give rise to a new individual from their body. A bacterial cell divided in two through asexual reproduction gives rise to new bacteria, as shown in figure 5-5. A yeast can form buds that later on become separate individual. Plants grow new plants using their stem, leaf, and roots. Both sexual and asexual reproductions have important functions. In both cases, the genetic material (DNA) is passed on from one generation to the next, ensuring the survival of the species on Earth. 1. Bacteria copy their DNA by starting at any point on the circular chromosomes. 2. The two copies of DNA attach to the inside wall of the bacterial cell. 3. The cell starts to divide, forming a new membrane and cell wall. 4. The bacterial cell splits into two separate cells, each with their own DNA. Living Things Adapt and Evolve All living things can adapt to their environment. This adaptation is necessary for rvival. Adaptation depends on the need of an individual. A polar bear, for example, would not be able to survive in an extremely cold environment without its capacity adapt. Adaptation is any response or reaction toward a stimulus that helps in the survival of an organism. A seed-eating bird will eventually eat a worm when there are seeds to be found. This change in food choice is therefore its adapting mechanism. Prolonged adaptation to certain environments may lead to the gradual evolution of the succeeding generations. Evolution is the gradual change in organisms over a long period in response to changing environment. Living Things Are Organized Life on Earth exhibits organization. The atom is the smallest unit of matter, lowed by molecules, which are combinations of atoms. When these molecules are grouped together, they form a cell. The cell is the basic unit of life. In multicellular organisms, such as plants and animals, cells are grouped as tissues to perform specific Functions. Different tissues can be grouped further and form organs. Organs in animals include the heart, brain, and lungs, among others. The organs form organ systems that makes the function of the body more complex and efficient. Organ systems form the whole organism. All living things exhibit organization, whether they are unicellular or multicellular organisms..

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