If you sell stock from your portfolio to pay off your car loan,your debt ratio of 0.5 will
A)increase.
B)decrease.
C)stay the same.
D)More data is needed to determine what affect this action will have.

Question

Quizplus · Accepted Answer

Selling stock from your portfolio to pay off your car loan will decrease your debt ratio because it reduces the amount of debt you have (the car loan), while keeping your assets (the stock) the same. A lower debt ratio is generally seen as a positive financial indicator.

If You Sell Stock from Your Portfolio to Pay Off