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Exercise #6
1.) Taking a look at the 5 Year Yield Index (FVX) chart, we can make which of the
following statements:
Your answer is B. The chart has given a triple top buy signal and
violated the bearish resistance line. This would suggesting rising prices for bonds.
That is incorrect. The 5 Year Yield Index (FVX) is a measure of the
rate itself. Therefore, if the chart of the FVX is positive that would suggest the bias is for higher rates.
If rates are headed higher, then bonds will move lower.
Go back to the question.
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