The confidence index increases as the yield on lower grade bonds decreases, everything else being constant.

Name: The confidence index increases as the yield on lower grade bonds decreases, everything else being constant.
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Question

Quizplus · Accepted Answer

When the yield on lower grade bonds decreases, it indicates that investors have increased confidence in the ability of these bonds to pay back their principal and interest. This increase in confidence leads to an increase in the overall confidence index.

The Confidence Index Increases as the Yield on Lower Grade