A Bell-Shaped Curve Is Similar to All EXCEPT Which Type

question 2

Multiple Choice

A bell-shaped curve is similar to all EXCEPT which type of distribution?

• A) symmetric
• B) normal
• C) unimodal
• D) positively skewed

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Definitions:

Interest Cost Component

The portion of pension expense that represents the increase in the projected benefit obligation due to the passage of time.

Projected Benefit Obligation

An estimate of the total amount an entity is obligated to pay in pension benefits, based on expected future salary increases.

Discount Rate

The interest rate used to discount future cash flows to present value, often used in the calculation of net present value or investment appraisals.

Service Cost

The portion of the expense of a pension plan that is attributed to the increase in pension benefits due to employee service in the current period.