Which of the Following Is True About the Velocity of M1

question 33

Multiple Choice

Which of the following is true about the velocity of M1 and M2 in Canada?

• A)M1 velocity has been less than M2 velocity.
• B)M1 velocity has been greater than M2 velocity
• C)M1 velocity has been increasing but M2 velocity has been decreasing.
• D)The change in the M1 velocity has been smoother than the change in the M2 velocity.

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Definitions:

Projected Benefit Obligation

An actuarial measure of the present value of pension benefits owed to employees, accounting for projected salary increases.

Service Cost

The actuarial present value of benefits attributed to employee service during a period, often recognized in pension expense accounting.

Settlement/Discount Rate

The interest rate used in calculating the present value of future cash flows when assessing the value of financial instruments or liabilities.

Actuarial Loss

occurs when the actual experience under a pension plan deviates from expected assumptions, resulting in higher costs than projected.