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The second type of memory allocation is known as a stack memory allocation, which corresponds to non-static local variables and call-by-value parameter variables. The sizes of these allocations are fixed at the time of compilation but their addresses will vary depending on when the function which defines them is called. Their contents are not immediately initialised, and must be explicitly initialised by the programmer upon entry to the function or when they become visible in scope.
Such memory allocations are placed in a system memory area called the stack, which is allocated per process1 and generally grows down in memory. When a function is called, the state of the calling function must be preserved so that when the called function returns, the calling function can resume execution. That state is stored on the stack, including all local variables and parameters. The compiler generates code to increase the size of the stack upon entry to a function, and decrease the size of the stack upon exit from a function, as well as saving and restoring the values of registers.
There are a few common problems using stack memory allocations, and most generally involve uninitialised variables, which a good compiler can usually diagnose at compile-time. Some compilers also have options to initialise all local variables with a bit pattern so that uninitialised stack variables will cause program faults at run-time. As with static memory allocations, there can be problems with reading or writing past the end of stack variables, but as their sizes are fixed these can usually easily be located.