Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 11 of 24
A higher discount rate:
B. decreases the VBO.
C. does not affect the VBO.
A. increases the VBO.
B. decreases the VBO.
C. does not affect the VBO.
User Contributed Comments 3
| User | Comment |
|---|---|
| HenryQ | Asset return has nothing to do with pension obligations. Think of them as on the asset side of B/S and separated from liabilities. |
| rlabog | in this case why is the answer "B" - decreases the vested benefit obligation? |
| davidt876 | ecause you're discounting FV of liabilities to PV |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain and calculate measures of a defined benefit pension obligation (i.e., present value of the defined benefit obligation and projected benefit obligation) and net pension liability (or asset);
describe the components of a company's defined benefit pension costs;
explain and calculate the effect of a defined benefit plan's assumptions on the defined benefit obligation and periodic pension cost;
CFA® 2025 Level II Curriculum, Volume 2, Module 11.