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7. Describe the “Barrons’ Confidence Index” (aka Confidence Index, aka Confidence Index Yield Gap) and how...

7. Describe the “Barrons’ Confidence Index” (aka Confidence Index, aka Confidence Index Yield Gap) and how it is interpreted.

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The Barrons’ Confidence Index measures confidence in the stock market by comparing yields on high rated bonds to yields on lower rated bonds.

The closer the Index is to 1, the more confident investor are about the stock market. A lower index (around 0.8) indicates that investors do not have confidence in the stock market.

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