Using the following data on bond yields:

This Year Last Year

Yield on top-rated corporate bonds 5.8 % 8.8 %

Yield on intermediate-grade corporate bonds 7.8 % 10.8 %

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?

• Increasing
• Decreasing