Business, Legal & Accounting Glossary
An indicator used to gauge investors’ confidence based on how much they are investing in speculative grade of bonds. When investors are more optimistic about the market, they tend to invest in high-quality bonds, but when they are worried about the market they invest in lower-quality bonds. This indicator is calculated by dividing the average yield on 10 high-grade bonds by the average yield on 10 intermediate-grade bonds. The difference between the two is used to determine investors’ confidence.
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This glossary post was last updated: 14th November, 2021 | 0 Views.