The Possibility of Evil Vocab

Vocabulary List 1.1 (The Possibility of Evil)

Agriculture Agriculture is the main source of livelihood in every country in the region except Brunei and Singapore. Agricultural employment, however, has been declining. More than two-thirds of the workforces of Cambodia and Laos practice agriculture. As the economies of the ASEAN countries have been restructured toward growth in industry and services, there has been a corresponding decline in the proportion of the gross domestic product (GDP) derived from agriculture, most significantly in Indonesia, Malaysia, and Thailand. Agricultural output in Southeast Asia has increased significantly since 1970. There are wide variations in this growth across the region, with the greatest gains in Malaysia and Thailand and little or no increase in Cambodia, Laos, and Vietnam. Hunger and malnutrition are problems in pockets of even the most developed countries, but they have been especially serious in Cambodia because of crop failures and internal strife. The condition of the rural population everywhere is clearly related to limited access to land, the landless experiencing greater poverty and poorer health. Landlessness is perhaps most serious in the Philippines. The dominant form of agriculture in the region is wet-rice cultivation. Where conditions permit, two crops typically are planted each year. Other food crops such as corn (maize), cassava, and pulses (legumes) frequently are grown in drier areas where there is too little water for a second planting of rice. Rice production requires a reliable water supply. Thailand and the Philippines rely heavily on rain-fed systems, while Indonesia utilizes irrigation to a large extent. Irrigation or some other form of water control is especially critical in the cultivation of the high-yielding varieties (HYVs) of rice that have been introduced since the 1960s. The spread of the so-called Green Revolution—in which HYVs and chemical fertilizers and pesticides are utilized—has brought mixed results. There is little doubt that production has increased because of the higher yields of these hybrid strains and because their more rapid maturation increases the possibility of multiple annual crops. Frequently, however, poorer farmers are not able to take advantage of these strains, because of the high cost of their use. The goal of rice self-sufficiency has been difficult to achieve for most countries. A large variety of cash crops are grown for the local and export markets, both on large commercial estates and by individual growers or smallholders. Tree crops are the most important in terms of value, although the area devoted to them is limited largely to equatorial areas. Rubber and palm oil are significant in Malaysia, Indonesia, and southern Thailand, while coconuts and sugar are important in the Philippines. Other major export crops are cacao, coffee, and spices, while crops grown largely for local and regional consumption include chilies, sweet potatoes, peanuts (groundnuts), and tobacco. The cultivation of opium poppies is important in parts of Myanmar and Thailand. The emphasis on rubber and palm oil production is in response to a considerable (though fluctuating) worldwide demand for these commodities and because of a nearly continuous harvest period that provides year-round employment. Foreign corporations once dominated production, but, as the region’s countries gained independence, much of the production was nationalized. Government ownership continues to predominate, with increasing private ownership. Fishing contributes only a token amount to the GDP of Southeast Asian countries, but it is an important livelihood in certain areas and supplies a significant portion of the local diet. Marine output has gradually expanded with new technologies. The maritime nations of Thailand, Indonesia, Malaysia, and the Philippines all have globally important fishing industries. Shrimp catches are especially in demand in the world economy. Aquaculture has become increasingly important in the region, such species as shrimp, carp, and grouper being raised in excavated ponds.

Risky environments occur when there is potential for injury, unsafe practices and the surrounding are considered hazardous or reliable. In a sporting and physical activity context, this can be due to a variety of factors such as: playing surface, isolation, water, unpredictability and equipment. A playing surface is the environment in which physical activity takes place. A playing surface can be dangerous or hazardous when the ground is uneven, wet/slippery and debris is present. This can be risky for participants as it can lead to severe injury and or death. An example of this is when physical activity or sport is called off due to wet weather. This puts participants at risk as its presents the possibility of the participants slipping over and cutting themselves or fracturing/breaking a bone. Isolation occurs when a person, people or event is held far away from first aid or a significant population, which can contribute to a risky environment. Acquiring an injury in an isolated location makes it difficult for help, and assistance may take longer to arrive, further putting yourself at risk. For example, bushwalking by yourself at night, the walker could slip and break an ankle. It may then take a while for aid to locate or reach you, further putting yourself at risk. Also, an isolated location makes it difficult to fully assess potential risks leading to an unsafe location for physical activity. With the example of the ultra- marathon, organisers were not able to fully assess the potential risk of bushfires leading to serious injury for their competition therefore isolation is a significant contributing factor to a risky environment. Water is a factor which influences risks in sport and physical activity. The lack of water can lead to dehydration and other health issues. On the other hand, the presence of water can result in slippery surfaces as well as altered or unknown conditions. This can be seen when an athlete takes part in a triathlon. Water is required to remain hydrated, however it can become hazardous. During the run and bike legs, water or rain can result in slippery surfaces and can therefore be dangerous for participants. In the swim leg, water depth and conditions can be unknown, rough or altered creating danger for participants. Evidently, water is an influential factor of the risks in physical activity and sport. Unpredictability will always play a role in sport and physical activity. Situations will never be completely foreseeable nor will risks be avoidable. The optimum risk identification processes cannot completely eliminate risks, simply reduce them. It is important for sporting associations to establish plans and processes not only to identify risk environments but to manage risks should unpredictable circumstances arise. Equipment is a factor that can contribute to a risky environment. If there is a lack of the correct and required equipment in physical activity, or if the equipment is ill-fitting or faulty, participants are then at risk of getting injured. For example, if a cricket player isn’t wearing a helmet and the cricket ball hits their head, they are at risk of serious head injury or death. Therefore, if proper and suitable equipment is available, participants can partake in physical activity safely without risk of injury.

Why should mankind explore space? Why should money, time and effort be spent exploring, investigating and researching something with so few apparent benefits? Why should resources be spent on space rather than on conditions and people on Earth? These are questions that, understandably, are very often asked. Perhaps the best answer lies in our genetic makeup as human beings. What drove our distant ancestors to move from the trees into the plains, and on into all possible areas and environments? It appears that we are driven to ensure the success and continuation of not just our own genes, but of the species as a whole. The wider the distribution of a species, the better its chance of survival. Perhaps the best reason for exploring space is this genetic predisposition to expand wherever possible. Nearly every successful civilisation has explored, because by doing so, any dangers in surrounding areas can be identified and prepared for. These might be enemies in neighbouring cultures, physical features of the area, a change in the area which might affect food supplies, or any number of other factors. They all pose a real danger, and all can be made less threatening if certain preparations are made. Without knowledge, we may be completely destroyed by the danger. With knowledge, we can lessen its effects. Exploration also allows minerals and other potential resources to be located. Additional resources are always beneficial when used wisely, and can increase our chances of survival. Even if we have no immediate need of them, they will perhaps be useful later. Resources may be more than physical assets. Knowledge or techniques acquired through exploration, or preparing to explore, filter from the developers into society at large. The techniques may have medical applications which can improve the length or quality of our lives. Techniques may be social, allowing members of society better to understand those within or outside the culture. Better understanding may lead to more efficient use of resources, or a reduction in competition for resources. We have already benefited from other spin-offs, including improvements in earthquake prediction – which has saved many lives – in satellites used for weather forecasting and in communications systems. Even non-stick saucepans and mirrored sunglasses are by-products of technological developments in the space industry! While many resources are spent on what seems a small return, the exploration of space allows creative, brave and intelligent members of our species to focus on what may serve to save us. While space may hold many wonders and explanations of how the universe was formed or how it works, it also holds dangers. The chances of a large comet or asteroid hitting the Earth are small, but it could happen in time. Such strikes in the past may account for the extinction of dinosaurs and other species. Human technology is reaching the point where it might be able to detect the possibility of this happening, and enable us to minimise the damage, or prevent it completely, allowing us as a species to avoid extinction. The danger exists, but knowledge can help human beings to survive. Without the ability to reach out across space, the chance to save ourselves might not exist. In certain circumstances, life on Earth may become impossible: over-population or epidemics, for instance, might eventually force us to find other places to live. While Earth is the only planet known to sustain life, surely the adaptive ability of humans would allow us to inhabit other planets and moons. It is true that the lifestyle would be different, but human life and cultures have adapted in the past and surely could in the future. The more a culture expands, the less chance there is that it will become extinct. Space allows us to expand and succeed: for the sake of everyone on the Earth, now and in the future, space exploration is essential.

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.

Commas Directions: Correct the sentences by adding commas where needed. 1. After the sound of the bell we realized it was a false alarm. 2. Mr. Yoshino the head of the department resigned yesterday. 3. The gentleman with the black umbrella who is an ambassador to the United States said hello to us as we were entering the hotel. 4. Even though we won the game the players unfortunately did not play their best. 5. Heather walked quickly up to the door and knocked hoping that someone would answer. Author’s Purpose 6. An author writes a story about a boy who saves his town from a flood by using his quick thinking. The author includes exciting descriptions of the boy's bravery. What is the author’s most likely purpose for writing this story? A. To inform readers about the dangers of floods B. To entertain readers with a heroic tale C. To explain how to prevent floods D. To persuade readers to prepare for emergencies 7. Which of the following is an example of an author writing to persuade? A. A science textbook chapter explaining the water cycle B. A commercial encouraging people to adopt shelter pets C. A short story about a girl who finds a magical necklace D. A recipe for making chocolate chip cookies 8. Read the following sentence: "Studies show that students who read for 20 minutes a day score higher on tests. Reading is one of the best habits you can develop for success in school and life." What is the author’s purpose in this passage? A. To entertain readers with a fun story B. To persuade readers to read more often C. To inform readers about how books are written D. To explain how to find books to read 9. An author writes a how-to guide titled 10 Easy Steps to Plant a Garden. What is the author’s primary purpose? A. To persuade readers to grow their own vegetables B. To inform readers how to plant a garden C. To entertain readers with funny garden tips 10. Read the excerpt: "Long ago, in a village surrounded by mountains, the people discovered a secret about their water well. Every full moon, the well water turned to gold for just one night. But no one knew why. This mystery brought travelers from far and wide, hoping to uncover the truth." What is the author’s purpose in this excerpt? A. To persuade readers to visit the village B. To inform readers about a historical event C. To entertain readers with a mysterious tale D. To explain the science behind the water Main Idea When I stepped out into the bright sunlight from the darkness of the movie house, I had only two things on my mind: Paul Newman and a ride home. I was wishing I looked like Paul Newman--- he looks tough and I don't--- but I guess my own looks aren't so bad. I have light-brown, almost-red hair and greenish-gray eyes. I wish they were more gray because I hate most guys that have green eyes, but I have to be content with what I have. My hair is longer than a lot of boys wear theirs, squared off in back and long at the front and sides, but I am a greaser and most of my neighborhood rarely bothers to get a haircut. Besides, I look better with long hair. 11. What is the main idea? The narrator likes movies. The narrator wishes he was Paul Newman. The narrator is content with his appearance. The narrator looks better with long hair. 12. The narrator believes. . . looks are important. he should get a haircut. green eyes are bad. that he has red hair. Once there were four girls who shared a pair of pants. The girls were all different sizes and shapes, and yet the pants fit each of them. You may think this is a suburban myth. But I know it's true, because I am one of them, one of the sisters of the Traveling Pants. We discovered their magic last summer, purely by accident. The four of us were splitting up for the first time in our lives. Carmen had gotten them from a secondhand place without even bothering to try them on. She was going to throw them away, but by chance, Tibby spotted them. First Tibby tried them; then me, Lena; then Bridget; then Carmen. By the time Carmen pulled them on, we knew something extraordinary was happening. If the same pants fit and I mean really fit the four of us, they aren't ordinary. They don't belong completely to the world of things you can see and touch. My sister, Effie, claims I don't believe in magic, and maybe I didn't then. But after the first summer of the Traveling Pants, I do. 13. What is the main idea? Four friends were connected through a special pair of pants. A pair of pants called the Traveling Pants. Carmen finding a pair of pants from a second-hand shop. The girls believing in magic. 14. The narrator included that the pants fit all of them to emphasize how the girls become friends. the girls are different sizes. why the pants are special. where the pants came from. If you are interested in stories with happy endings, you would be better off reading some other book. In this book, not only is there no happy ending, there is no happy beginning and very few happy things in the middle. This is because not very many happy things happened in the lives of the three Baudelaire youngsters. Violet, Klaus, and Sunny Baudelaire were intelligent children, and they were charming, and resourceful, and had pleasant facial features, but they were extremely unlucky, and most everything that happened to them was rife with misfortune, misery, and despair. I'm sorry to tell you this, but that is how the story goes. 15. What is the main idea? description about the story to come. A warning about the story and its sad content. A declaration about the Baudelaire family. A beginning for the end of the story. 16. The narrator believes the reader does not like sad stories. likes stories with happy endings. can’t enjoy the story. will find the story unhappy. 17. Read the following sentence: Of course you can exaggerate your story, but what you say must be based on truth. Which word means the same as exaggerate? repeat reveal overstate increase 18. What is the meaning of the word inaugurated, used in the following sentence: Less than two months after Abraham Lincoln was inaugurated President in 1861, he encountered one of the most difficult tasks ever experienced by a United States leader: civil war. elected by a vote brought into office identified by name viewed as an authority 19. What does the phrase “practice your presentation so much that you could do it in your sleep” suggest in the following sentence: The best advice is to practice your presentation so much that you could do it in your sleep. get plenty of sleep the night before giving a presentation give their presentations in front of a small audience first take advice from their teachers on how to write a presentation memorize their presentations before they give them 20. Read the following sentence: The Phoenix Mars Lander is a NASA spacecraft that landed on the Red Planet in May 2009 to study the history of water and potential for life on the planet. What is another word for potential? existence situation possibility qualification

rural- (adj) relating to farm areas and life in the country syn- countrified, pastoral 16. substantial- (adj) large, important; major, significant; prosperous; not imaginary, material syn- considerable, tangible, big 17. tactful- (adj) skilled in handling difficult situations or people, polite syn- skillful, discrete 18. tamper- (v) to interfere with; to handle in a secret and improper way syn- monkey with, fool with, mess with 19. ultimate- (adj) last, final; most important or extreme; eventual; basic, fundamental syn- farthest, furthest, terminal 20. uncertainty- (n) doubt, the state of being unsure syn- doubtfulness, unsurenessanecdote- (n) a short account of an incident in someone’s life syn- tale, sketch, vignette, yarn 2. consolidate- (v) to combine, unite; to make solid or firm syn- strengthen, firm up, merge 3. counterfeit- (n) an imitation designed to deceive; (adj) not genuine, fake; (v) to make an illegal copy syn- (adj) fake, phony, bogus 4. docile- (adj) easily taught, led, or managed; obedient syn- manageable, teachable, pliant 5. dominate- (v) to rule over by strength or power, control; to tower over, command due to height syn- govern, overlook 6. entreat- (v) to beg, implore, ask earnestly syn- plead, appeal to 7. fallible- (adj) capable of being wrong, mistaken, or inaccurate syn- errant, flawedfickle- (adj) liable to change very rapidly, erratic, marked by a lack of constancy or steadiness, inconsistent syn- inconstant, faithless 9. fugitive- (n) one who flees or runs away; (adj) fleeting, lasting a very short time; difficult to grasp syn- (n) deserter; (adj) elusive 10. grimy- (adj) very dirty, covered with dirt or soot syn- filthy, sooty, soiled, dirt-encrusted 11. iota- (n) a very small part or quantity syn- speck, dab, job, bit, smidgen 12. maul- (v) to beat or knock about, handle roughly; to mangle; (n) a heavy hammer syn- (v) manhandle, batter 13. potential- (adj) possible, able to happen; (n) something that can develop or become a reality syn- (n) possibility, capability 14. radiant- (adj) shining, bright; giving forth light or energy syn- glowing, brilliant, dazzling, resplendent

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