Technicians using the confidence index published by Barron's to make investment decisions
A) believe the ratio is a bullish indicator because during periods of high confidence investors will invest in higher quality bonds.
B) believe the ratio is a bearish indicator because during periods of high confidence investors will invest in higher quality bonds.
C) believe the ratio is a bearish indicator because during periods of high confidence investors will invest in lower quality bonds.
D) believe the ratio is a bullish indicator because during periods of high confidence investors will invest in lower quality bonds.
E) believe the ratio is a bullish indicator because during periods of high confidence investors will not invest in bonds.

Question

Quizplus · Accepted Answer

Technicians using the confidence index published by Barron's believe that the ratio is a bullish indicator because during periods of high confidence, investors tend to take on more risk and invest in lower quality bonds with higher yields, rather than higher quality bonds. Therefore, the higher the ratio, the more bullish the market sentiment.

Technicians Using the Confidence Index Published by Barron's to Make