Barron's Confidence Index

Barron's confidence index

Index measuring the ratio of the average yield on 10 top-grade bonds to the average yield on 10 intermediate-grade bonds. The discrepancy between high-rated top-grade bonds and low-rated bond yields establishes a measure that is indicative of investor confidence.
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Barron's Confidence Index

A measure of how bullish or bearish a market is. To calculate the Index, one divides the average yield of high risk bonds by the average yield of medium risk bonds. A high Index figure indicates a bullish market because investors are willing to accept lower returns for higher levels of risk. A low figure indicates the opposite.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Barron's Confidence Index

A confidence indicator calculated by dividing the yield on intermediate-grade bonds into the yield on high-grade bonds. A rising ratio indicates investors are demanding a lower premium in yield for increased risk, thus expressing confidence in the economy and the securities markets. A rising index is considered bullish for stocks; a falling index is considered bearish for stocks. Compare Standard & Poor's Confidence Indicator.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.