A low Barron's Confidence Index means that:
A)investors prefer stocks to bonds.
B)the yield on bonds is greater than that on stock.
C)low-quality bonds have returns much higher than high-quality bonds.
D)low-quality bonds have returns slightly higher than high-quality bonds.

Question

Quizplus · Accepted Answer

The Barron's Confidence Index is a measure that compares the yield of high-grade bonds to that of intermediate-grade bonds. A low index indicates that investors are demanding a higher premium for risk, meaning they are less confident, which is reflected in significantly higher returns for low-quality (riskier) bonds compared to high-quality bonds.

A Low Barron's Confidence Index Means That