Anita Lai is a single parent with a young son. She has a disposable income of $45,000 annually. Her total assets are $165,000, of which $125,000 is the value of the home she owns. And her total liabilities are $115,000, of which $105,000 is the balance on the mortgage loan she took to purchase her home.

1: Given this information, what is Anita Lai's debt-to-equity ratio?

2: Given Anita Lai's ratio of debt-to-equity, what could we say about Anita's ability to take on more consumer debt?

a: could definitely handle more debt, throw caution to the wind!

b: is right on the line, might be able to handle more debt with a careful plan but is considered risky to do so

c: should not take on more debt, are you kidding?!? No one would lend her more money if she asked.