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Title: Basic Ideas of Finance
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Chapter Learning Objectives

Section 1 - Chapter Introduction

None

Section 2 - Income and Expenses

• Identify and compare the sources and uses of income.
• Define and illustrate the budget balances that result from the uses of income.
• Outline the remedies for budget deficits and surpluses.
• Define opportunity and sunk costs and discuss their effects on financial decision making.

Section 3 - Assets

• Identify the purposes and uses of assets.
• Identify the types of assets.
• Explain the role of assets in personal finance.
• Explain how a capital gain or loss is created.

Section 4 - Debt and Equity

• Define equity and debt.
• Compare and contrast the benefits and costs of debt and equity.
• Illustrate the uses of debt and equity.
• Analyze the costs of debt and of equity.

Section 5 - Income and Risk

• Describe how sources of income may be diversified.
• Describe how investments in assets may be diversified.
• Explain the use of diversification as a risk management strategy.