Financial Energy Commodity contracts are traded on the New York Mercantile Exchange. The picture at the left side of the slide here is the actual building with the reflection of the sun on it is the New York Mercantile Exchange building on the Hudson River in New York City. To the right is an actual picture taken with the traders trading in the pits as they yell and scream back and forth at one another placing the orders. The New York Mercantile Exchange started in the 1800s. There was scattered markets for the goods in large cities. You can picture a city like New York City and agricultural products being brought in and sold in various parts of it. So some entrepreneur businessmen decided that they needed a central exchange. So in 1872 it was founded as the Butter and Cheese Exchange. In 1880 it was changed to the Butter Cheese and Egg Exchange. And then finally in 1882 it was changed to its present name of the New York Mercantile Exchange. Later products would include yellow globe onions, apples, potatoes, plywood and platinum. Platinum is the only product which is still traded today on the New York Mercantile Exchange. So today trades crude oil, heating oil, gasoline, propane, natural gas, platinum and palladium. The futures contract, the definition given by the New York Mercantile Exchange is a legally binding obligation for the holder of the contract to buy or sell a particular commodity at a specific price and location at a specific date in the future. The keyword here is future. These are known as futures. We are buying and selling energy commodities at a future date and time. And again this is a legally binding obligation. This is what makes exchanges a sound place to conduct business. If you fail to perform under a contract obligation with the New York Mercantile Exchange there are both financial and legal ramifications. The components of a standard NYMEX energy contract. First we name the commodity crude oil, natural gas, heating oil, unleaded gasoline. The price, which is what most times we are most interested in, the location. Each of the energy commodities on NYMEX has a different delivery location and then the date. What future point in time do we wish to buy or sell the energy commodity? The trades on the New York Mercantile Exchange between the counterparties are conducted under the International Swaps and Derivatives Association or ISDA 2002 master agreement. This is a standardized contract under which all financial energy commodity contracts are traded. One of the primary functions of energy contracts on the New York Mercantile Exchange is that they provide us price discovery. We can establish a price for crude oil, natural gas, heating oil, and unleaded gasoline for any future point in time. Years back prior to the advent of the New York Mercantile Exchange no one could really tell what the price was at any point in time. The trades were conducted over the telephone but now with the New York Mercantile Exchange at any point in time you can look up the live trading. The New York Mercantile Exchange is owned by the Chicago Mercantile Exchange or the CME Group. If you go to CMEGroup.com you can see the commodity prices. There are some links to that on the homepage of the course module here. In addition this allows us to perform what we call hedging. The hedging is to reduce risk in a transaction. In the case of the futures contracts it helps us to reduce our price and or physical risk. We may be concerned about high prices if we're a consumer of energy commodities. We may be concerned about low prices if we are a producer of energy commodities. We may also be concerned about receiving physical supply or having a guaranteed physical market. The New York Mercantile Exchange contracts guarantee that. These are common terms used by NIMEX. An ask is a motion to sell at a specific price. It's the same as an offer. So ask an offer interchangeable. It's your asking price. What do you wish to get in the marketplace for your commodity? And notice this says a motion because they're addressing the idea of the physical trading that takes place in the pits. The movement of hand gestures back and forth as traders buy and sell. A bid then is the opposite. It's a motion to buy at a specific price. What is your bid for the energy commodity? A bull in this case we're talking about a person. It's one who anticipates prices will increase or volatility in the market will increase. They're the opposite of a bear. A bear is one who anticipates a decline in price or the volatility in the marketplace. Obviously the opposite of a bull. This is a picture of the New York Mercantile Exchange trading floor. It just so happens in the foreground is the natural gas trading pit. Off to the left barely seen is the crude oil trading pit. Notice the various colors of jackets around the floor. I will identify who some of those are in a minute. But the yellow jackets for the most part those are NIMEX compliance personnel. The multicolor jackets the blues the burgundies some of the other colors represent brokers. What are known as clearing brokers on the floor of the New York Mercantile Exchange. They have posted credit and they have licenses to trade on behalf of their clients. So we have the floor brokers which I mentioned. We have locals. These are the individuals and firms and in some cases funds that have a large amount of money and wish to trade. They are speculators. They're not interested in the physical commodities whatsoever. They're interested in price movement and wherever price is moving that's where they want to be. Ring reporters and ring chairman. We'll drop back here a second and I will show you the ring reporters are in the yellow jackets near the trading rings themselves. There is a podium if you can tell situated above the natural gas pit with some personnel in yellow jackets. Those are the ring chairman. Their primary responsibility is to oversee the activity of the pits and to resolve any disputes. Since we have people who are yelling orders back and forth to one another and using paper slips sometimes mistakes can be made and if there's a disagreement over the actual details of the trade. The ring chairman is supposed to step down and resolve that trade between two counterparties. We have floor committee members. Those are basically NYMEX committee members. The New York Mercatile Exchange also has compliance people and the commodity futures trading commission is the regulatory body for energy financial derivative trading. They have their own personnel on the floor as well and then there are hundreds of line staff from the New York Mercatile Exchange. We'll now talk about each one of the specific contracts for energy commodities. The first is crude oil. The symbol is CL. We refer to this as West Texas Intermediate or WTI crude. It is low sulfur and so therefore is given the nickname sweet crude. The NYMEX contract for crude oil was initiated in 1983. Every contract represents a thousand barrels which is the equivalent of 42,000 gallons of oil. Price quotes on the New York Mercatile Exchange are all US dollars and cents in this case per barrel. A minimum price fluctuation that is the amount that the price has to move for trade to take place is a penny or ten dollars a barrel. The delivery point for crude oil under this contract is what's known as FOB or free on board or delivered to the sellers facilities at Cushing, Oklahoma into any pipeline or storage facility with access to Cushing storage, TEPCO or Equilon pipelines. So if you buy or sell crude oil contracts on NYMEX for a particular month, you are obligated to either receive the crude oil or deliver the crude oil at Cushing, Oklahoma. Deliveries are to be made uniformly across the month. This is the contractual obligation. The idea here is to make all parties deliver as equally as possible. The actual obligation, for instance, if I sold 30 contracts for the month of September, that means 30,000 barrels of crude oil, the exchange would like me to deliver that at a thousand barrels a day. However, if I cannot, my real legal obligation is 30,000 barrels for the month. The trading hours on NYMEX for what we consider to be the open outcry or pit trading, the general session where the traders are in the pits, yelling orders back to one another, run from 9 a.m. to 2.30 p.m. Eastern Standard Time. The Chicago Mercantile Exchange also has an electronic trading platform known as Globex, and this is virtually 24 hours a day, seven days a week. It starts at 6 p.m. on Sunday evenings and ends at 5.45 p.m. on Friday, Eastern Time. Crude oil can be traded for up to nine years, and then we also have products that are known as STRIPS. These are available for terms of two to 30 consecutive months. In essence, STRIPS amount to an average price. If I wanted to buy six months' worth of crude rather than go out and have my broker quote me one month's price at a time, they'll just give me an average price across the six months, therefore I am purchasing a six month STRIPS of crude oil. The last trading day, every contract expires. Again, we are talking about future contracts. So currently the closest future contract is September. The crude oil contract then settles three business days prior to the 25th of the month. So just in case the 25th is a non-trading day, either weekend day or holiday, the settlement occurs three business days prior to the business day that is prior to the business day ahead of the 25th. I know that sounds very confusing. I can't quite figure it out myself half the time. Margin requirements, this is a big issue here. You can see that if you want to buy or sell crude oil contracts for every single contract that you wish to enter into, you have to have $5100 in a margin account. That's a safety net against losses that you could incur. This protects your clearing broker and protects the New York Mercantile Exchange from default by you as a counterparty. This also discourages a lot of traders from just jumping in and trying to trade contracts. For example, if a trader wanted to speculate on 10 crude oil contracts, that's only 10,000 barrels, that's not a lot of volume per se. They would have to put $51,000 in a margin account before they could even get started. Here is the symbol breakdown. When you look at future screens or if you see the prices reported in the Wall Street Journal or any other type of publication, you'll see these funny symbols. The first two letters of the symbol represent the energy commodity themselves. So CL represents crude oil. The second letter is the actual month of delivery. For example, U equals September. The final symbol is the number that corresponds to the year in our example 2. So the September 2012 contract for crude oil on the NIMEX is expressed as CLU2. Other symbols that represent energy commodities, NG for natural gas, HO for heating oil, RPOB represents unleaded gasoline and then PN for propane. And then here's the breakdown of the symbols that they use. Feel free to use this as cheat sheet if you ever run across those quotes and can't remember what they mean. When you look at future screens, you're going to see column headers that will use these types of terms. When you see the open, that's the opening price at the opening bell. When you see people on television ringing the bell for the open of whatever market it might be, the stock market, the NIMEX, the Chicago Mercantile Exchange. As soon as the bell goes off, the very first trade that is consummated, that price is registered as the open for the day. The high is the highest price that traded that day, including the after hours electronic trading. The low is the lowest price that traded for that day, including active, excuse me, after hours electronic trading. That gives us the range on the day. What was the entire range of pricing that day? When you see last, that's the last trade that just occurred. In other words, what was the last trade that had occurred? The net would be the change in price from that last trade to the one prior to it. So are we going up or are we going down as we're trading currently? And then change, the change is the change in price from the trade that just occurred from that last trade versus the prior day settlement. What was the final price for the energy commodity the day before, and where do we sit relative to that today? That's what change represents. We refer to futures contract trading as a zero-sum game. For every buyer, there is a seller. I can't buy crude oil contracts without someone being willing to sell them to me, nor can I sell them without a market. And believe it or not, less than 2% of all the contracts traded actually go to physical delivery. In other words, less than 2% of the contracts will actually be energy commodities exchanged between counterparties. On the one hand, that may sound like a small number, but with each crude oil contract representing 1,000 barrels, and you can trade between 50,000 and 100,000 contracts a day, it does amount to a substantial amount of physical energy commodities being exchanged. This is what a typical future screen would look like. These are the headers that I mentioned to you. On the day that I printed this off, you can see the last trade was $92.68, represented a drop of $0.19 from the prior day's settle of $92.87 in the far right corner there. We had the opening price of $93.25 and a high and low on the day as well. And the very far right column is the time in which the trade occurred. Natural gas futures contracts. The contract unit is 10,000 MMBTUs. That is 10,000 million British thermal units. Prices are quoted in U.S. dollars and cents, and the minimum fluctuation between trades has to be one-tenth of a penny, or what we refer to as a tick. Trading hours are exactly the same, but the trading months for natural gas, you can actually trade natural gas out 12 years if there was, in fact, a need to buy yourself for that long of a period of time. The last trading day for natural gas contracts, the futures is the third business day prior to the first calendar day of the delivery month. We do trade options in energy futures contracts. In the case of natural gas, those expire one day prior to the actual contract itself. The delivery point for buying and selling under NYMEX natural gas contracts is a place known as the Henry Hub in Erath, Louisiana. Texaco has their Henry Plant in Erath, Louisiana. Sabine Pipeline Company runs the hub on behalf of the New York Mercantile Exchange. And again, the delivery period is to be uniform across the month of production for which the contracts were exchanged. This is a schematic of the pipelines going in and out of the Henry Hub. There are various sources of natural gas coming offshore, onshore. There is gas moving to the northeast, the southeast, the upper Midwest, as well as from Louisiana back into Texas. So it made an ideal market hub for indicating various supply and demand. Settlement price, every day the New York Mercantile Exchange will put together a final price for that day's trading. The settlement price is the weighted average of all the trades that occurred during the last two minutes of trading in that regular session. Now, when the closest future month, or what we call the prompt month, when that contract expires, they're going to take the total number of trades in the last 30 minutes, come up with a weighted average, and that will be the price for that month. And that month rolls off, as we say, and it's in the history books. Margin requirements for natural gas substantially less than crude oil, but the value is substantially less, so there's only $2,100 margin requirement per contract. This is what a natural gas future screen would look like if you ever see one of these on a trading floor or somewhere else, perhaps on someone's screen who trades in these contracts. This is what it will look like. We're now going to talk about unleaded gasoline referred to as RBOB. RBOB stands for reformulated blend for oxygenated blending. What we get at the gas pump, you usually have the opportunity to get 100% unleaded in very few places. Mostly it's a 90-10, that is, it's 90% gasoline, 10% ethanol, or some other type of blending component. In some cases, you hear about E85, which is 85% unleaded, 15% of some other added to normally something like ethanol. So what's traded on the New York Mercantile Exchange is actually the 100% unleaded. It becomes a feedstock for unleaded because it's only 90% of what we get at the pump unless we're buying 100% unleaded. So it's reformulated blend for oxygenated blending. They're going to blend oxygenators into the unleaded gasoline. The oxygenators are seasonal in nature depending on the regions. Again, oxygenators help to burn the gasoline more efficiently and therefore reduce the emissions. Oxygenators are things such as ethane, ethanol, butane, isobutane, and natural gasolines. Every RBOB contract is 42,000 gallons, US dollars and cents, and the minimum fluctuation is 1,000th of a penny per gallon. The delivery point is free on board or delivered into the petroleum products terminals in New York Harbor. Margin requirements $8,100 per contract. Last but not least, heating oil or HO. It's sometimes referred to as number two fuel oil. Every contract is 42,000 gallons. We are still dealing with US dollars and cents per barrel. Minimum price fluctuation is 1,000th of a penny per gallon. The delivery point is the same as for RBOB, and that is free on board or delivered to the petroleum products terminals in New York Harbor. Everything else pretty much remains the same under the standardized NIMEX contracts.


Hi everyone welcome to the Linux and the programming basics class today we will continue to the next section which is the Linux networking I am calling it lecture one but recall this is lecture number five we just finished the Linux basics where we introduce the concept of Linux how Linux developed over time we also talked about the various parts of the Linux or external shell and the file system and then when we we went through several commands for running some basic commands like LSE kind of things and when we moved on to more esoteric commands and we also like had some fun exercises to see how these commands can work together so today again we will continue finish off that section there are a couple of things that are remaining so these are the things that we saw already like the files and commands rep fgrep locate unix or touch etc so today we will finish up this section there were few commands that are missing I will just talk about those comments and then we will start the Linux networking piece of the lecture so without wasting much time let's begin so some more commands so these are some of the key commands which are slightly advanced commands than what we saw before the first command is tar it's the short form for to archive so essentially tar is used to archive a directory structure so assume that you have a directory a under that there are some files B and C and then another directory B and then the D contains E and then maybe like G as an another directory structure this entire directory structure is there and then the archive you want to archive a flat file so the tar command actually combines all these it goes down the hierarchy collects all these files and puts them all together in a single file so that way it is easy to actually transfer this file and then once we extract to this archive then we can get back the old the file itself and usually this tar archives all the files in the ASCII format actually like I mean it is a exactly format independent so whatever the format is there underneath thing it puts them in that form so here is one example this is essentially like tar CVFP and then in tar multiple files and then we come puts together in one and here the destination is given first in the argument so lab one tar is the destination and then the lab one can be the entire directory or just can be a single file whichever one that you want to and then when you want to actually extract the file we just replace the C with X here the command you can actually go to man pages and man tar and then look at what these options are but it's it to be straightforward I think that we will stand for verbose I think like I will I would like you to actually explore this a little bit more so again the command is tar it stands for to archive and then you basically give the destination first and then you specify which files or which folders that you want to archive again here you can actually do multiple files and then I want to explore this I want you to explore this particular command the other command that we will use is the gzip this is actually for compressing a file so typically a file has it could be like some of these files can run into multiple gigabytes of information but sometimes these files will have a lot of empty holes or they could be encrypted and made it much tinier so gzip is a compressing utility which compresses the file and again I want you to do a man to find out what man entry is there for gzip so one thing is this minus 9 what is minus 9 stands for you can find it out when you do the man here we do the man I mean when you do the gzip minus 9 the lab one from this command the tar it generates another file called lab one dot tar the gv the end gv the subscript stands for the gzip file and gzip is definitely a binary file so you want to use the read it and there are utilities that you can use to open the gzip and read it nowadays like a lot of these utilities are becoming more commonplace to get back this I told you like tar minus xvf which is shown here you can also do the first thing is what you do is like you do a gzip minus cd to get the the untarred you can also do the there are other commands like done zip g unzip which is essentially unzips a file which is from the compressed file it brings back the larger file and there is nowadays like a short cut which is fvf z the z stands for unzip and then untar the file so this is another handy command that you can use it for doing your operations then there are a few other commands echo echo I am fine essentially like echo whatever you put in it just displays back so like I mean typical first command that you write in Linux will be echo and then you within the ports you say hello world and then it echoes back that hello world and then the other one is clear which is also an important command which is basically clears the screen so that whatever you type in it goes up and then basically the blank screen is left for you to begin your world then there are some special characters you we already saw this greater than sign and then followed by a file name essentially like when we do the any command and then pipe in greater than a file name the output of that command will go into that file again there are special ways to actually distinguish what is the standard out and what is the standard error you can look it up when you do the math pages for that and then you should be able to see lot of entries for that and then there is also like a less than that you can use which is essentially like contents of the file now goes into the command and then the pipe one that we already saw basically like that is so you can type the output of one command into another command using the pipe format there is also another nifty operator which is the back tick it is also called back tick here you can see that there is this date has a back tick in front of it and then also like it is a single code that is or actually it is called a back tick and so when we do this I want to see like what you get as an output this is back tick date you know that echo command actually echoes whatever is inside the code if you use a back tick what will be the output and then also like I mean there is a small programming puzzle for you seek 1 to 10 what will be the output on this one essentially like the back tick is used as command the command expander essentially what it does is actually executes whatever following the back tick as a command so since the date is a command it will execute the date and mostly produces what the value of the date is same thing for sequence 1 to 10 prints the sequence in the number 1 to 10 I think it is so it is fun to actually do the program this way so now let us look at just what the activities are for for this week so again I want you to use map to find the details on the commands that we mentioned we saw earlier and then I want you to actually explore some more in the Linux command structure these following commands so I have given this as an example for you you can use this and then see what all things that you can get this will also become your lab once you start doing this okay so now we start our today's lecture which is essentially the lecture on Linux networking so in today's lecture we will be covering the main ideas what is really networking what does networking mean you saw that Linux is a multitasking multi user multi CPU system so the multi CPU and multi user key aspects of what networking is then we will talk about the OSI model which is one of the key concepts that was developed for networking in fact there are graduate courses on OSI model so we won't go into like go to details as to like what all the things you'll at least look at the basics as to what exactly it stands for and why is it important in our context and then we will move to the various other things in the Linux networking area so today we will be mostly like dealing with this OSI model and why is it important for us so how does it make the machines interrupt that is the key things that is in today so let's look at what is networking so the classical definition for networking is how computer or components in our now the terminology will move to just we call that moves how they talk to each other that's the key aspects of so that's what networking is all about so the so far we saw how a single window single user how he interacts with the Linux system which is good in the sense that you can still one program but you cannot interact with other machines other users using Linux so far so today we will break that barrier and actually start talking about how we can communicate with other users how other users can also view your system how they can communicate your your session or you can also see how we can ask remote machines perform a job for us which is again crucial for LSF or the load balancer type of application in fact that the entire computer industry is built on this networking basis basics as you know the today like I mean most of the browsing that you do like when you do the various interaction with the various websites they are all using the networking principles and we saw you'll see how we can do that using this so before we talk about networking a network itself which is a passive entity where several computers are there and they are all interacting that network has few characteristics the few characteristics are number one is the size which is essentially you can define it as the number of nodes in that network so for example if there are five computers connected or in your university you have a you have many computers connected to a central server or many community computers connected to each other the number of computers becomes the size of the network the second characteristic of a network is the topology here essentially we talk about what is the configuration okay we know that there are five computers that are interacting with each other how are they connected now they connected one is disconnected to one or one is connected to all of them those kind of what kind of configuration that's the main aspects that we will talk about the third item in a network is physical which is how are they connected are they connected using copper wires are they connected using fiber channel here we will go a little bit deeper not just consider the physical medium but also like what is the speed are they connected on a table with so many many megahertz or how they are connected so we will talk about that and then finally the protocol protocol is how do they talk to each other so then one wants to talk what does it do or if somebody is talking and how do you interrupt that person so again these are the rules of conversation very similar to how humans interact with each other so we will see some of these concepts in the next slide so the characteristics the size is determined by the the number of nodes as I mentioned earlier and there are many systems that are prevalent today the LAN or the wide area network LAN or local area network are two examples but there are many many such networks are already available in use today so that's where the size comes into picture what is the topology topology as I mentioned is one computer is connected to all of them or to the next door neighbor how do they can how do they connect that is the one or are they connected in a hierarchy so based on that you can have like a star connection or ring connection or point to point connection things like that and then hierarchically connected those are all like point to be used to follow physical as I mentioned the it's the medium by which the computers are connected to each other and today we have several such medium one is the ethernet the other one is the gigabit ethernet fiber channel these are all like characterized as various speeds so that you have a you can establish the connectivity in fact I should add here that even Wi-Fi also can be considered as a physical connection which is what is the characteristic of connecting wirelessly even though there is no the medium is actually the air that enables you to come out and finally the protocol there are many many types of protocol the earliest one is the round robin then the round robin is essentially every computer is connected in a circle big circle and each one gets specified time for communicating so essentially I communicate for my 100 millisecond and then pass the command to the next one or the next one is implicitly it will take over so every say like 10 computers are connected in this network every computer gets just 100 milliseconds so by one second you cover all the computers so every second the computers get to connect get to talk you can see like how inefficient this system can be because if somebody doesn't want to talk still he will hold up for 100 millisecond before he pass it on I mean before the control goes from person then there were token ring that was developed which is mostly there is a token that it gets passed if you want to talk so if I want to talk I request the token from whoever has the token if I get the token then I can talk and then when I have when I finish talking I still hold on to the token until the another person asks for it and then in that case I can just pass the token to one person again you can see that how inefficient this kind of system could be so there are the in real terms actually like I mean the 100 base t 10 base t things like that are more appropriate for the protocol and then finally the hyper transport this is another protocol where it is all point-to-point connections so let us move on so the next one so now that we understand what the network is now how do we make them connect so one one of the significant achievement in the 80s is the development of this open systems interconnection model to enable how computers can talk to each other until this time like I mean all the communication used to be very ad hoc every company had its own rules and every computer used to communicate in its own ways but this open systems interconnection model pretty much standardized how the computers need to connect and this helped develop the whole internet itself which is now as you know we cannot live without so the open systems interconnection model divided the whole communication framework into seven layers so the first layer here is the lowest layer which is physical then there is a layer called data link layer then there is another layer called the network layer and then the transport layer so these four layers are the lower layers lower layer these are the ones by which the data actually gets transmitted okay so now the next three layers the session layer presentation layer and the application layer are at the top of the pyramid they are more concerned with the semantics of the message which is okay I am sending a message so the lower four layers are just concerned about how can I get it to another person but the top layer is the one that gives the intelligence to that message so that it is routed in the proper way so again so if you think about like an human the the brains are all in the top the application presentation the session layer and then these are all the other sense organs which make them make us walk around so if you if you just left it to these layers this four layers we will be just walking on in because we know how to walk but in order to reach a destination we need these three layers so let us look at how these layers are positioned again as I mentioned the OSI is a big topic there are graduate courses on just this just one one aspect of it just explaining all these layers and how they communicate how to build those layers so we won't go into that gory details we only will limit ourselves to why this is important and how can we use them use it in our networking phase and then we will just move on at the point let's look at we look at look from now the top down it is we look at the brains and then we are going to more details the lower physical layers so the lay layers seven and six and five there is a reason why we combine these three things that I will explain a little later but the application layer provides some different services to the application so this is where the top most the the all the gory details are shown I mean or the gory details are hidden but the actual semantics is shown so it uses the underlying layers to do the work and here the application layer can be just your mail program the HTTP which is a website or the telnet and we will study in more details regarding the next two which is the FTP or the file transfer protocol and then the DNS so this next layer is the presentation layer this converts the data from application into a common format and vice versa vice versa here is when it gets the common format data from the down below it converts that into the application so that applications can be corrected the session layer essentially is the layer that organizes synchronizing the exchange of data between the application processes again we combine this because one of the key protocol that we will learn which is the IP the internet protocol combines these three these three layers into this one okay so now let us look at the next layer which is the transport layer this is where the messages are actually getting transported and it provides end-to-end transportation of the segments so example here is the TCP which we will browse through now in the next section again this actually this layer encapsulates the TCP segments like what we are we want things to be done into layer packets and it also adds reliability by detecting and transmitting the last packet so here so whenever a packet gets lost this is the layer that returns which that until it gets a message saying that that packet was by whoever was the receiver and then it uses these acknowledgment and sequence of number and sequence numbers to keep track of successful out of order and lost packets there are timers that are also included in this layer that help differentiate between the log and the delay so if the timer is waiting indefinitely you know that actually like there is a loss and there are fixed number of time fixed amount of time of it how much it will wait before it can declare that something is a lost packet so we have seen like I mean from this one it's more like the real program or a command or something that you want service out of and now we talk about packets in this slide where we now take that thing take the program from this slide break that into small pieces and then we try to send it to whoever wants to service that particular program or service request so now when we go into the next layers they are much more granular so we will go into that so before that I would just wanted to say a couple of words so I gave you the example in layer 4 that it is tct as the example which is it stands for transient in terms of protocol this is a connection oriented protocol there is also another one that is prevalent which is the user datagram protocol which is more like connection less protocol and but this is little bit unreliable so I just wanted to wanted you to know these terminologies because in future you will be using these terminologies or somebody may ask you about these so now let us go to the the next layer which is the layer 3 layer 3 is essentially it is the network layer this is the layer that route the information within the network so this mainly deals with all the address spaces addresses so essentially IP is a network layer implementation and it defines the addresses in such a way that the route selection can be determined so we will look at what is an IP address and how to do how to actually assign an IP address or how the IP addresses are assigned today and then again the it uses a single address space for the entire internet into network it adds an additional layer of processing so it is different from the the MAC address that we know so here essentially like I mean for unreliable networks essentially like I mean if the packet gets lost the network layer doesn't care for higher layers and since the higher layers actually can recent packet so this layer is not really that the intelligence is already lost when you come here and then basically like it powers packets hop by hop so again as we know that if you want if you have like many computers connected and from one computer it can actually hop through multiple computers then reach the final destination you will see like how this is done in more more chart in a little bit while but I just wanted to give you the introduction on this and also it makes the routing decision as to how can a packet be sent closer to its destination so all the time it is looking at the address and comparing with where it is and where is the destination and see what will be the next the the half point that it needs to route and then if it routes to that point whether that will make it closer to the destination or it's going to be far away from this based on that it transmits that okay and so essentially like I mean you have these since I talked about all these things like I mean so there are powering tables and the routing table and that kind of it knows that please it's nearest neighbors as to who they are what is their address things like that so based on that it can actually like send these packets so out again the routers can talk to each other to exchange information about the network topology so if another router which is having this table routing table it can actually share the table with this computer so that it to know what is the surrounding network of that particular now let's look at the data link layer here the intelligence is completely lost so we started with the packet information or actually the actual message then we split into packets then the the previous layer the network layer was only concerned with that is it now when we go into data link layer even like we are losing that intelligence also here the data link layer is only responsible to provide reliable transmit of data across the physical network it bundles bits into frames and moves frames between the holes on the same wing and the key characteristics of the frame is it has a definite start and end and the size so the receiving computer can determine from the looking at the header of the frame it can determine when the message will end and it also has a definite source and the destination link layer addresses so this is the Ethernet MAC addresses for the computers essentially so again once the network layer decides okay this is where I am going to go so then it knows that exactly okay I am receiving it from this computer things like that so it is clear addressing is already specified so and then the link layers detect corrected frames and some of them also can recent so some of the upper level tasks can be done at the lower level also this is the things are evolving so you will see more of that and finally the physical layer which is essentially the actual connection itself and here it moves the bits using voltages so we don't even talk about the bits and the bytes these are all like just the the real communication channels so one of the examples is the modern day example is service or the serializer be serializer essentially like I mean there we don't worry about okay what is the address that it is going is it going in the right direction things like that here we just move one bit from one point to the other and that uses just the voltage so here we look at the eye-opening various other characteristics whether the RF interference is there or not things like that that is all worried at this level so again there is no concept of bytes or frames the bits are defined by just voltage level very similar to so this is there the VLSI designers really contribute in the sense of our knowledge about how things transmit through copper or any other or fiber so again so now we understood the various layers now let's put together and see like I mean how we can make use of this that I mentioned the distinction between the TCP IP and OSI protocol is the top three layers are combined for the TCP IP which is essentially like what we will be dealing with in the Linux networking side the OSI is more like a generalized policy specified specification so the TCP IP is pretty much the implementation for Linux I think of it that way again just a recap is the application layer provides the main application support the applications can be like mail the web or HTTP etc. Transport layer this is basically the TCP end-to-end reliability that is the main reason or main use of this layer the network is essentially like it is basically like the IP forwarding essentially it looks at a particular packet in its address and it forwards to the neighbor using a best-effort algorithm so you can think of it as what is the routing table and what is the forward table tells it and then based on that it will do the forwarding and then once that it decides like that put it in then the data link layer takes over and that helps in framing the message and then the delivery of the message itself to the destination and it uses the physical layer essentially the wires to send it and again here there will be like other protocols that will take over as to whether how to clock the system whether to send the clock along with the data or separately or is it a serial data or plus type of communication there are several things like study and nowadays it's all like the studies is basically it's a serial data that goes on so those are the things that that that are done in the physical layer so here is how it is important for our Linux application so the application layer is there the kernel resides in and kernel also uses some of the concepts basically then these are all the various protocols and that is actually sent to the network interface which is then is a physical interface to the subsequent computers and if you look at it this kind of this model helps isolate some of the the various areas for example if we are using a Wi-Fi or or a fiber channel or any of the wire wire line communication those are all like isolated from the top because only the network interface is going to change so this helps us to actually reuse all the programs that we are writing all the protocols all the intelligence that we are building upfront to still reuse and gain benefits even when the lower level lower layers changes to some other thing again same thing like I mean if you consider any layer that those layers can be changed independently of the other layers and that is one of the key benefits of this model so let's look at the the layer interaction because this is one of the things that we want to just browse through it and then we can move on again when we start doing the communication the topmost layer essentially are essentially like I mean those are valid end to end what that means is when we start a communication we start at this layers and then the receiver wherever this application gets executed they also see all the way up to these top layers the transport protocol could be end to end and the network protocol is throughout the internet work itself and then basically like I mean the link and the physical layer may be different on the top so you can on one hobby you can use Wi-Fi the other hobby can be wire line things like that so this can be so now let's see how this is done so here is an OSI interaction which is essentially like the top layer so means the application starts the host essentially like I mean stop the process the various translations happen throughout the as the message goes down these four layers and then finally the physical layer transmits to the next one and in the next one the the message is put together all day up to the network layer there it is seen that okay this is not my destination something else is the destination so again this particular router transmits that message to the next one and in the next router again like I mean it tries to identify whether it needs to provide the service it's not so the message stops at the network layer and then it gets routed back and then it goes through the physical layer and finally we do the host where now it goes back all the way and then provides that service so we can see that actually like this top four layers are end to end and the message the network layer is throughout the internet working whereas this physical layer could be different for different messages and different destinations so similarly on a TCP essentially like we don't have the session in the presentation layer but working wise it's very much similar to the earlier model where it goes through the physical layer goes up and then the IP layer essentially disciples and say that okay hey this is not the destination so go to the next hop so the next hop point of the next router takes over and this could be like meaning actually as stated in the bottom diagram there could be one like couple of routers or many routers are if the host is directly connected to the other whole then you can directly go up also so it all depends on how your network configuration is you already saw that the characteristics of the network so that's what determines how these communications can happen so now we will be going into the IP overview I just wanted to give some basic overview of the IP addresses so here there are three different things basically like a network address or subnet address and the host address and then basically these are the numbers that normally encounter say like <IP_ADDRESS>. something and then how that connects to the other ones and then this is the gateway which is essentially what is the router and that translates into or sends it to another one here this host is a 30.xx so you can see that okay the router is kind of an article between sitting between these two and enabling the community so how this is done so in the IP header essentially like I mean we have so this is what the consisting of a this is what is in the message you have various fields of identification again I don't require you to understand all of these in this course the main things that I want you to know are basically the length of them the message first is also encoded and then what is the source IP address and the destination IP address here we also talk about the time to live essentially like I mean this field make sure that after that particular time it is declared as a lost packet basically can be retransmitted so this time is used for to set the timer to enable the timer so that it can see like then it should retransmit and then there are some identification bits and then there is a header checks and so you can see that one two three four five six these six 32-bit words are essentially just to set up the communication and then after that the data will begin so and you can also see like from checks and essentially for the reliable transmission so when the destination encounters this and then basically the checks and then the bit streams don't match then you can discard that and then it will wait for the packet another packet to be delivered so then definitely it's how to communicate and it's achieved through these protocols and you can also see that actually like the overhead is this two three four five six times 32 bits over overhead of this protocol because for every packet that you send you need to send these bits and so on and this actually explains how the communication really happened so the data the transport layer attaches the header and it converts the data into a transport layer data and then when it goes to the network layer network layer adds more header it takes the whole thing the network layer data and then if you look at it actually it is it has this the transport layer header and then the data and then the data link layer now as it puts its own header and it also puts a trailer blocks and suddenly you can see that actually like the data is only like so much and all these are overheads for the communication so the I introduced several terminologies in this lecture the packets essentially are like it is a encapsulated or it is a capsule a message capsule so let us go back to this picture so the message capsule contains the data and then it contains a little bit more so you can think of this as a medicine say for example where the main ingredient main active ingredient is the data and then you put a coating or sugar coating maybe or using the header and then you have you are actually putting multiple coatings because it is going to go to multiple systems and finally like a top cover to cover the medicine and which is the actual the capsule itself and that is how you can picture this and then that that is how it goes from various form phases so in this lecture we use like I mean different name form so at the ethernet of the link layer we call it as a frame at the IP layer we can call it as a data gram and at the TCP layer we call it as a so you can look at this so here is the link layer the link layer is essentially now we call it as a frame and then we go into the the network layer the IP here and now this is a data gram which is very similar to a telegram or something like that and then at the transport layer it is still called as a segment so they are all referred to the data with various pieces added to it and we will briefly look at how these things are added and then sometimes we just use packet for all these things so in the documentation and things like that you will see all these different terminology we may just use packet for so now we go into the more details which is here so we start with the lowest level which is the ethernet of the transport the link layer so in link layer we have a preamble we code in the destination with using a six bytes and then source is also six bytes the length of the data is given as two bytes and then what kind of what is the type of that message which is another two bytes and then we transmit the data the data can vary in size from 46 to 1500 bytes and then there is a NP which is like a CRC which is also like which is more like an encryption that constituted four bytes so the destination and source are the 48 bit MAC addresses and then the type is essentially given as these numbers so basically like 0800 means the data portion of the ethernet frame contains the IP data gram and then the 806 is for the ARP type of data so this is that the ethernet now when we go into the next higher level maybe so the IP in IP essentially like I mean now the bits are organized in this fashion again you see that actually like I mean this is the things may be small but the data is broken into multiple pieces there here once those the data gets added then it gets compiled into this form there we have a version some IHL the type of service the total length and then basically some identification there are some flags we saw this one the time to live protocol header checks and the source address destination address and then some options and padding and then finally that is that the six 32 bit or four byte thing so so far this is like 24 bytes of dimension but get scale it is same so here the addresses are now different here there are more like the MAC addresses then so here they are like the IP addresses more so again the MAC addresses just provide a point-to-point or one hop whereas now the IP addresses will provide us to go from one computer to another computer far far away then when we go to the next higher layer the TCP layer it is even so the way it is here now we are defining what is called ports there is a source port and the destination port and the sequence number and then an acknowledgement number then it has several flags and then finally like I mean this is checksum and then finally the data is also sent as with this in this segment so here the source and the destination are no longer the IP addresses now they are the ports so once you know the IP addresses this IP addresses are already implied by the IP header and we know which port to open on those IPs so we will we will go into more details when we talk about the directory services which will be coming in the next next sections and then the data offset is 5 which means like there are 20 updates after that the data so again there are predefined rules as to how to get the data get to the data and things like that so on the Ethernet layer again basically they are the 48 bit unique device addresses provided for each of them I encourage you to find the mac addresses for your machines you can try to find like what kind of command is needed to get to the mac addresses and basically it uses this ARP or the address resolution protocol in order to communicate this information so in the Linux world essentially like I mean so we saw all these things essentially the networking the inter-process communication they kind of they are called it uses a special kind of pipe support several address families and support several socket types so the socket is what we will see so here is the basically like the various families that it supports but you can also see that actually the amateur radio protocol is also there with the in the Linux itself but we will limit ourselves to mostly like the unit for the main pockets so and then the sockets are essentially whether it is a stream it is a datagram and then basically can be a reliable delivered messages or a sequence packet we will just touch upon these things we won't be going to be so I just wanted to give you an idea about so we saw from the TCP IP and the Ethernet layers below so they communicate through these sockets to the Linux so when we learned about this essentially like I mean though these are the next higher layers which are on top of the TCP layer itself and which provides the network so essentially like I mean the TCP and they open what are called the sockets which are essentially mentioned here and then these sockets are the ones that communicates to the network applications from the user side so here also like when you can see that the kernel is all the things that are below and then if they transform to the network applications on top so a simple client server mechanism is what we will talk about so in a server actually there is a socket that's created we bind an address to the socket and then the server just listen for the client client also creates a socket and then it connects that socket into to the server and once that connection is received and if the server is okay with the connection then it sends an accept signal back to the client and then the client starts sending whatever the message that it wants to send so this is a simple client server protocol an example of this is the HTTP so again when we make do a Google search essentially like to search something actually the that client is making all these kind of connections to the server and then getting the data out of it and all the things so like now we saw this much essentially like there it creates a socket and starts communicating that starting to communicate here represents all the things that we saw in this diagram which is below this portion and also all the things that we learn in all these this diagram so I hope like I mean now we have a good understanding as to what happens when we send a request and how that gets into the machine and how it gets communicated so this all goes back to that OSI layer definition of the PCTIP protocol that we talked about so there is a lot of things that goes in the background we do not we do not really understand or we do not really want to understand of the point again it is important from the real estate designers perspective because all these things ultimately end up in the designer's hand and real estate designers want to improve these designs and make sure that the communications are always reliable and proper so with that we conclude today's lecture and we will pick up some more of this IP addressing in the next session and then we will continue our other higher the advanced Linux networking topics in the next session thanks


This is stock number 21T110. We are here at Summit Automotive in Fond du Lac, Wisconsin. You're new and used heavy-duty truck and RAM headquarters today. We are checking out this brand new 2021 RAM 2500 crew cab short box with the RAM box power wagon level 2 This vehicle has the 6.4 liter V8 motor V8 Hemi motor Patriot blue metallic over black clear coat is the color. We shoot all of our videos in 1080p 60 frames per second So if you have HD capabilities on your computer tablet or smartphone Vice turn them on right now because it is definitely your best way to check out the looks and styling of the vehicle before seeing it in Person and if you'd like to check out all the photos on this truck in the upper right hand part of your screen Is a link to our website click that and check us out there So this one has the power wagon off-road group. So you get the rock rail Slash Step bars right there. That's part of that group and then you get the beadlock capable 17 inch alloy rims and this one has Goodyear Wrangler LT 285 70R 17 tires definitely like a mud terrain tire on there you get the Bilstein shocks Patriot blue one of my favorite colors on the Rams. It's got just a little bit of metal flake in it You have your HD capabilities on you can see that have the LED headlamps the LED running lights the LED fog lamps Does come with the worn winch on there front bumper parking sensors and You get the RAM stamped grill with the power wagon This one does have a black hood decal on it Kind of hard to see how dark the truck is, but I think it's a nice Accent on there, especially being two-tone like that We'll take a look at the original window sticker. Feel free to pause this at any point I'm not going to go through everything, but just some of the main points on here. You can see 2021 RAM power wagon 64 hemi 8-speed automatic transmission 410 axle ratio comes with the true lock front and rear axles as well as the front disconnecting stabilizer bar and Front electronic electric winch, which really is the main part of the power wagon group Patriot blue pearls a hundred bucks towing technology group, which gives you the cargo view as well as the 360 cam is a thousand ninety five dollars and then the safety group, which gives you the digital review mirror Lane keep assist full speed collision warning plus adaptive cruise control and adaptive steering system and blind spot With cross path detection is 1990 power wagon off-road package Which gives you those rock rails and the special rims is 1995 the RAM box utility group is 295 and then the power wagon level 2 group is 1,845 dollars that gives you the leather trimmed at 40 20 40 split bench seating in the front The ventilated seats the heated seats second row and floor storage bins power folding tow mirrors The dual climate controls rain sensitive winch of wipers remote tailgate release second row heated seats Two-way power lumbar eight-way power adjustable Front seat as well driver seat rear door accent lighting radio driver seat memory Automatic high beam control mirror mounted auxiliary lamps heated steering wheel Memory pedals with power pedals remote start and then the floor mats The electronic shift on the fly transfer case is 295 power Sunroof 11 95 the 17 speaker Harman Kardon premium sound system 795 and the you connect 12 inch radio is 1995 but that gives you the off-road pages the Sirius XM Guardian for a year and Sirius XM with 360 as well as the 4g LT Wi-Fi hotspot Also gives you Android Auto Apple CarPlay all that good stuff Rambox cargo management system is 995 Which includes the LED bed lighting and then you get the dual alternators right at 380 amps 395 total MSRP on this truck is 72 420 And if you want to get your summit price in the upper right-hand party screen is a link to our website to get all the rebates and incentives on this particular truck Three year 36,000 bumper to bumper five-year 60 powertrain warranty on this truck. They don't give these Fuel economy ratings. They just kind of give them scores. So greenhouse gas is C-minus and smog is B minus and Then the safety ratings five stars for side crash and three stars for rollover not rated for anything else So pretty safe vehicle there Get the power wagon badge on the dash there Then we'll come back to the interior This one does have the decals on the side with the power wagon now you could always remove those if you wanted But I think it would probably mess up your decal down here And look silly you get the RAM box Which is a really nice feature if you like them you have removable Plugs down there so you can put ice and drinks in here. You got these dividers With the slots here that you can put in there to divide stuff up Little management system. You also have LED lighting back here which Most have to turn on with the lights But that locks with the key key fob Get the LED tail lamps Back up parking sensors full towing package, of course with the receiver hitch four pin and seven pin wiring You get the RAM stamped tailgate and the power wagon Sticker on the back there. That's the shock down assist So it has the power release and you don't have to worry about it slamming down to get these lights on you can Press the button which is actually on the inside of the tailgate there You get those lights the light up there Notice the cargo management system with the tie-down cleats and then you have the divider here Which also can turn into a bed extender. So pretty cool stuff back here Tailgates really light shuts nice and easily LED tail lamps Rambox on this side has a hundred fifteen volt four hundred watt plug-in, which is nice And these step bars are almost like a powder coating on there You get the heated fold-out tow mirrors So they fold out like so they also power fold in you get blind spot monitoring directional signals LED side lights and then here your cameras for the 360 as well as the trailer tow assist Parking assist and then any of the electronic Keyless entering ghost system. Once again the power wagon level two group gives you the black leather interior You get the power wagon stitched into the bolster there Power driver seat with lumbar 40 20 40 split bench seating factory floor mats Auto headlamps power pedals power windows power locks power mirrors these mirrors do fold in like so Which is really nice, especially when you have the big old tow mirrors And then you can actually control the blind spot mirror You got to press this button and then pick which mirror you want to control and then it'll actually Control that outside mirror, which is a really nice feature as well And then you get memory driver seat too We'll hop inside and take a look at all the options in here. So you get the power wagon animation right there Digital speedometer compass display. You got a battery voltage level oil temp and instrument cluster Looks really good. I like the power wagon logo up top there comes with the leather wrapped heated steering wheel So this is cruise control that's your adaptive cruise control gear selector Information center controls Bluetooth and then you get audio controls on the back push button start eight speed automatic transmission with the push button four-wheel drive you also have your sway bar disconnect right there Axle locker or actually those are your axle lockers and then that's to unlock it And then down here you get two usb's two usb C's and an aux jack. So this is the 8.4 4c radio Gives you all the stuff that we discussed before including the factory navigation system also as AM FM and Sirius XM radio Capabilities you can do your heated and cooled seats here, and then you can also check out all your backup cameras here as well So you can check out your surround view camera Which is really a cool system and when you're backing up these lines actually will turn with the vehicle and Everything's super clear super HD I actually pulled this truck out of our service shop before and that was so nice to have to make sure I wasn't going to hit any of our tire machines or any of the other lifts or anything It was just a really nice system to have and then you have your backup camera right there Which you can see just how crystal clear that is And you can do different views you can do a wide view a wide view in the front a narrow view in the front And then you have your cargo cam Which shows you what's going on in the bed of the vehicle and then you can also just do your backup camera And then you can zoom in on your backup camera It's over the hitch to get hooked up to your boat camper trailer the first time every time and once you're hooked up and you're backing your trailer up You can use the trailer park assist, which is this right here, which shows you down the side of the truck So if you're backing your camper up or your boat, you can imagine having this to see where your boat or camper is going Our trailer is a really nice feature and you can choose the left or the right sides Whatever you want to do so really a cool system with this Toe technology group and all the cameras that come with this truck Really a nice feature Now this thing can do so much more.  You also have your projection manager We can project your cell phone to the screen so if you have ways or Google Maps you can project that to the screen and Use that if you like those better or just music or media or whatever you want And we actually did a demo on Android auto if you want to check that out It's in the upper right hand part of the screen, but then this one also has the off-road pages, which are really cool, too And those take a second to load, but you can usually other off-road pages from Chrysler offered the latitude longitude pitch Angle your vehicle dynamics your steering wheel degrees, which this one does the same thing Whether you have your axles locked or unlocked if it's in two-wheel drive four-wheel drive sway bars connected or disconnected So you got all that stuff there You have your accessory gauges Which are pretty cool. You got your latitude longitude your altitude there then you have your pitch and roll Which is I can imagine if you're off-roading would be very helpful to know You know exactly what angle you're at and then you can just check out your forward-facing camera And what's really neat about this is those are dynamic as well So as you turn your steering wheel you can kind of see where you're going to be going Which once again if you're doing a lot of off-roading with this truck or in the woods a lot It would be really great to make sure you weren't going to hit stuff Because if you look out the front this truck sits pretty high and you can't always see what's directly Below the hood. So really cool stuff there great radio. We could go over it for hours I bet but we don't have that much time Factory brake controller downhill assist control stability control tow haul front and rear parking sensors You can turn those off and on you do get a hundred fifteen volt front and watt plug-in down there You get the Harman Kardon sound system and then you have the power Rear view mirror camera, which is really cool So that actually shows you a real view of what's going on behind you Takes a little bit to get used to and you can adjust the brightness and you can also adjust The angle that that camera is at But that's really all you can do or you can just turn it off and have a normal meter mirror there So that's really cool as well up there. You have your assistant SOS buttons map lights power sliding Rear window button power Sunroof button and your power tailgate drop-down button there as well home link buttons And then your power Sunroof We'll take a quick look at the back seats and then we will Take one more look around the vehicle do a final walk around with all the lights on So these back seats are heated I was curious how they were going to do that Normally they have the council and the heated seat buttons are on there But they put them down here with the 40 20 40 split bench seats So that's kind of cool to USB plug-ins and then a hundred fifteen volt 400 watt plug-in back here Get the latch child safety system back here as well for any child car seats the power sliding rear window with built-in Rear defrost these seats fold up you get the load floor still in the 2500's Which is nice you get a nice flat area if you got pets put both sides down They got a nice flat place leg got muddy boots or tools put them down on there And you're not going to wreck your nice heated leather seats so This looks like the setup for the winch That's your winch controller in there and in the tow hook that goes on the front of it So that all comes with the vehicle you have a receiver hitch reducer and In the floor you have your in-floor storage bins with removable containers for easy cleaning you can put ice and drinks in there It's like you got too many coolers wherever you go Side current airbags and child safety locks on the back doors And we'll do one more final walk around here on the truck with all the lights on notice You got the LED license plate lights the LED tail lamps And I would personally like to thank you for checking out the video today and hopefully from this HD video You will have been able to tell just how good looking this truck is Learn a little bit about the power wagon a little bit about the power wagon level to the 12 inch You connect some of the special cameras on this truck love the LED headlamps and Fog lights on here And to see more pictures of this truck or one of our other 450 new and used cars trucks SCVs minivans Wranglers half tons three coder tons one tons you name it We got to go to that website right there www.summitauto.com full pictures and descriptions of every single vehicle from two locations all at summit auto comm and if You like to check out more HD videos You can go to YouTube comm slash some that ought to remember to like subscribe and share on this video and all The videos that you see there in fact in a second you will see a link to subscribe to our YouTube channel in the upper left a Link to more Ram 2500 truck videos like this one in the upper right a link to This vehicle on our website in the lower left and a link to our latest video from on YouTube in the lower right Click those check us out and we're super excited to be offering the 2021 Ram 2500 crew cab short box Ram box level to power wagon and a patriot blue metallic. Thanks again for checking out the video


Welcome to Church of the Chair, where Wells are deep subjects. I'm your host, E, and today we're getting away with murder. If you're new around here, I need to give you a warning. If you have not read all of Stephen King's books, I will be spoiling them in this series. So if you haven't read all of them, I suggest you click away now. You've been warned. Today, we're talking about Dolores Claiborne by Stephen King, one of my favorite books and the first one of his that I actually read. So how does Dolores Claiborne tie into the Dark Tower and the rest of the Stephen King universe? Let's get into that. Dolores Claiborne takes place on Little Tall Island, which is also where Storm of the Century and the short story Home Delivery take place. In Storm of the Century, the Islanders talk about what happened, the disappearance of Dolores Claiborne's husband, and consider it island business. As far as the Dark Tower connection goes, my theory is actually in the video before this one, my theorist redux video for Gerald's game. If you want to watch that one, please do. Now on to viewer comments. This first viewer comment from Valentine Entertainment 9983 says this. Now at first I kind of shrugged this one off, but seeing is how she was seeing things and dust motes are so small and I don't know, maybe there's something here. I'd love to see what you guys have to say about this comment. If I haven't had it up long enough, you can pause to read. This next comment from Logan Kalangi3226 says this. And yes, I believe that that is exactly a reference to Salem's Lot. Good catch there Logan. I'm sorry that this one is such a short video, but a lot of what I had to say was in the Gerald's game redux video and in the original two videos, so I want to cut it short and keep it like it is here. One of the things that I'm enjoying about redoing this series is making them short and succinct so that more people will hang around for the content. But that's all the time I have for you today. If I missed anything, if you have any corrections about anything that I said in this video, or if you want to post your own theories, please do so down there in the comments. But until next time...


In this module, I will explain a very famous concept which is the capital asset pricing model and it is abbreviated as CAPEM. So CAPEM is basically based upon the theory of portfolio selection. So we have discussed a technique which was the main variance approach. This is another concept which is used to select a portfolio and this particular concept is very famous. It was established by, it was developed by William Sharp in 1964 and later on a number of other experts, financial experts also worked on it and it is extensively used to decide how the portfolio will be formed. So capital allocation, capital asset pricing model may, you have to do capital allocation in different risky assets, in risky assets and we basically look at this particular concept of CAPEM that explains the, that is based upon the relationship between systematic risk and the expected return of the assets which you are going to take into account and CAPEM is extensively used. So when we look at the model, it is based upon several assumptions. The first assumption is that we assume that all the investors are rational investors and they are, they consider the main variance concept and they try to optimise that. You want them to take at least risk and want to earn maximum return. So we can say that they are main variance optimisers. The next assumption is that investors have the same information and on the basis of that information, their expectations are homogeneous. So they apply the same expectations on the basis of that information in the future. Another important thing which we are going to assume is that whatever assets we are dealing with, we are going to deal with in CAPEM, and another important thing which is assumed is that there is a certain common risk free rate landing opportunity available for all the people. And we will take that and account for our risk free return. So any risk free return investment opportunity, all the investors can access it and they can invest in it. So this is another major assumption. Now by considering, by taking into account these assumptions, we are going to develop our market portfolio. Market portfolio can be defined as a portfolio that holds all different types of assets in proportion to their market value. So when we say that in proportion to market value, in order to explain that, I am going to take up an example. When we talk about the proportions of market value in the market portfolio, what does that mean? So we are assuming that suppose an investor has a choice, or a financial analyst who decides the portfolio, he has a choice to invest in three types of assets. One asset is suppose general motor stocks. Second, you have stocks of Toyota and third, you have a risk free asset. So these are three types of investment opportunities that you can account for and make your portfolio. So we are assuming that as per market value, we are going to explain the proportions of investment to make the market portfolio. So in this example, we are assuming that the stocks of your general motor total available investment stock is of $66 billion. And the stocks available of Toyota, suppose, are of $22 billion. And you have $12 billion risk free asset for investment. Together, you have $100 billion of investment opportunity. So when we say that market value, according to the market value, you have investment opportunities. Your portfolio is defined by the same proportions. This means that when we look at GM stock, it is going up to $66 billion. And if we look at the stocks of Toyota, it is at $22 billion. So when we are going to form a portfolio, so the similar proportion will be accounted for. Like I told you, it is $66 billion or $22 billion. So the proportion of the portfolio that you want to make according to the market value in the market, is going to be defined according to your portfolio. If the ratio there is 66 divided by 22 is 3 to 1, then the ratio of 3 to 1 will be the same in your portfolio. This is one of the major assumptions of CAPM. Thank you very much.