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12 September, 14:58

Given the following data on bond yields:

This Year Last Year

Yield on top-rated corporate bonds 9.3% 9.8%

Yield on intermediate-grade corporate bonds 11.8 11.3

a. Calculate the confidence index this year and last year. (Round your answers to 4 decimal places.)

Confidence Index

This Year

Last Year

b. Is the confidence index increasing or decreasing?

Increasing

Decreasing

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Answers (1)
  1. 12 September, 17:34
    0
    a) Confidence index=Yield on top-rated corporate bonds / Yield on intermediate-grade corporate bonds

    This year=9.3%/11.8%=0.788

    Last Year=9.8%/11.3%=0.8673

    b) From the calculations we can see that confidence index is decreasing from 0.8673 to 0.788.
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Home » Business » Given the following data on bond yields: This Year Last Year Yield on top-rated corporate bonds 9.3% 9.8% Yield on intermediate-grade corporate bonds 11.8 11.3 a. Calculate the confidence index this year and last year.
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