How SSL (similar version) Works?

My book suggested the following protocol to replace SSL:

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A lot of the terms are familiar to me from the Original SSL, like ChangeCipherSpec message which means from now on the messages I send will be encrypted. and FinishedClient: which is the first message to be encrypted.

But few things aren’t clear for me:

  1. Diffi-Hilman is the short term key here, what about the long term?

  2. I know pre shared secret but what is pre master secret, who generates it and what’s used for (I don’t see the server using it anywhere)?

  3. after stage 5, How are the messages between the client and server passed? what’s the encoding function, what’s the key?

How SSL (similar version) Works?

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