With Respect to Pension Liabilities, Which of the Following Statements

question 34

Multiple Choice

With respect to pension liabilities, which of the following statements is true?

I. The projected benefit obligation (PBO) is always greater than or equal to the accumulated benefit obligation (ABO) .
II. The vested benefit obligation (VBO) is always as least as or as big as the accumulated benefit obligation (ABO) .
III. If the PBO is greater than the plan assets, the plan is said to be overfunded.
IV. If the weighted-average assumed discount rate is increased, the PBO will decrease.

• A)I, III, and IV
• B)I and III
• C)II and IV
• D)I and IV

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Definitions:

Analytic Thought

The process of breaking down complex information into smaller components for better understanding, assessment, or decision-making.

Inductive Reasoning

An analytical method where various propositions, assumed to be true or often validated as true, are amalgamated to reach a distinct conclusion.

Intuitive Thought

A cognitive process that creates immediate understanding or knowledge without evident rational thought and inference.

Concrete Reasoning

A form of thinking that is focused on the physical and the now, dealing primarily with observable or tangible facts rather than abstract concepts.