An Increase in the Present Value of a Defined Benefit

question 2

Multiple Choice

An increase in the present value of a defined benefit obligation resulting from employee service in the current period is referred to as:

• A) the current service cost
• B) the past service cost
• C) the interest cost
• D) an actuarial gain or loss

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Definitions:

Average Number

This term often refers to the arithmetic mean, which is calculated by summing all numbers in a set and dividing by the count of those numbers.

Type II Error

A statistical error that occurs when a false null hypothesis is not rejected, also known as a "false negative" finding.

Null Hypothesis

The null hypothesis is a statement in hypothesis testing that there is no effect or no difference, and it serves as a default position until evidence suggests otherwise.

Alternative Hypothesis

A hypothesis that proposes there is a statistically significant difference between two variables, contrasting with the null hypothesis.