The Longer the Period of Time Until Receiving a Future

question 66

True/False

The longer the period of time until receiving a future amount of money, the more interest that can be earned, so the larger the discount factor.

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Definitions:

Expected Return

Expected return is the anticipated amount of profit or loss an investment generates, based on historical data or probabilistic estimates.

Pension Trustee

An individual or a corporate entity that holds and manages the assets of a pension fund on behalf of the participants.

Journal Entries

The method used in accounting to record each financial transaction of a company, represented by debits and credits in the financial records.

Pension Expense

The cost recognized by an employer in a defined benefit pension plan for the estimated obligations as well as services provided by employees during the current period.