- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 11. Employee Compensation: Post-Employment and Share-Based
- Subject 2. Accounting for Defined Benefit Plans
CFA Practice Question
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.
Correct Answer: B
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 |