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

Question

Quizplus · Accepted Answer

The Confidence Index is often used as a measure of market sentiment and can be influenced by various factors, including bond yields. Generally, as the yield on lower grade bonds decreases, investors may perceive these bonds as less risky and become more confident in the overall market. Therefore, the Confidence Index may increase in this scenario.

The Confidence Index Increases as the Yield on Lower Grade