If a Company Increases Its Discount Rate for the Purposes

question 62

True/False

If a company increases its discount rate for the purposes of calculating its pension obligations, the accumulated benefit obligation and the projected benefit obligation will both decrease.

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Definitions:

Thorndike

An influential American psychologist who developed the law of effect, which suggests that behaviors followed by satisfying consequences tend to be repeated, while those followed by unpleasant consequences are less likely to be repeated.

Reinforcements

In psychology, stimuli or events that increase the likelihood of a behavior being repeated.

Operant Conditioning

A teaching technique that involves changing the level of a behavior by applying rewards or punishments.

Classical Conditioning

A process in which learning takes place by pairing two stimuli repeatedly; the response, although initially elicited by the second stimulus, is eventually elicited by the first stimulus alone.