Question

Using the following data on bond yields: This Year Last Year 4.8% 7.8% Yield on top-rated corporate bonds Yield on intermediate-grade corporate bonds 6.8% 9.8% 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? O Increasing O Decreasing

Answer 1

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NPV, IRR, PBP,OCFINDEX - Microsoft Excel (Product Activation Failed) View Add-Ins Data Review - 2x Σ AutoSum : A = = = V General File Home Insert Page Layout Formulas % Cut Calibri 11 A A Ea Copy Paste Format Painter B I U B- A Clipboard Font K123 - fic Wrap Text Merge & Center - $ -% . Fill 2 Clear Formatting as Table Styles Styles Sort & Filter Editing Find & Select Alignment Number Cells L M N O P Q R 109 110 CONFIDENCE INDEX = YIELD ON TOP RATED CORPORATE BONDS/ YIELD ON INTERMEDIATE GRADE CORPORATE BONDS 111 а THIS YEAR CONFIDENCE INDEX = 4.8%/6.8% = 0.7059 112 113 114 115 116 117 LAST YEAR CONFIDENCE INDEX = 7.8%/9.8% = 0.7959 118 119 CONFIDENCE INDEX HAS DECREASED FROM 0.7959 TO 0.7059 120 DECREASING 121 122 123 124 125 126 127 H O FCFARM, MSI,confidenceINDEX CURRENCY LOAN CROSS OVER HEDGING MONEY MARKET GM HPR AM TAX GROWTH SUST I CF CASH FLOW STATW ferences PREF AND DIV POLICY 200 130% Red 0 + WER B A .lll . * + ENG W 7845 31-10-2019