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Basic Question 4 of 17
A higher discount rate ______ service cost and ______ interest cost.
B. increases, increases.
C. decreases, decreases.
A. decreases, increases.
B. increases, increases.
C. decreases, decreases.
User Contributed Comments 2
| User | Comment |
|---|---|
| ehc0791 | interest cost = service cost * discount rate, it is not necessary that the interest cost will be lower. |
| C2inOC | ehc0791: You may want to check that. Interest Cost = Previous PBO * discount rate |
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Learning Outcome Statements
explain and calculate how adjusting for items of pension and other post-employment benefits that are reported in the notes to the financial statements affects financial statements and ratios;
interpret pension plan note disclosures including cash flow related information;
CFA® 2026 Level II Curriculum, Volume 2, Module 11.