The confidence index is:
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A. B. C. D.A
The Confidence index, published by Barron's, is the ratio of the average yield on 10 top grade bonds to the Dow Jones average of 40 bonds. The index measures the difference in yield spreads between high-grade bonds and a large cross-section of available bonds. Since high-grade bonds always have lower yields, the index value never exceeds 100. An increase in this index implies that yields on high-grade bonds and those on ordinary bonds have converged i.e. the yield spread between the bonds has narrowed. From a demand perspective, this will happen when the demand for riskier bonds rises i.e. when investors are bullish.