Choose the most complete description of the possible relationship(s)between the discount rate (D)and the expected long-term rate of return on plan assets (R)used for defined benefit pension plans. A)D = R B)D R C)D

Question

Choose the most complete description of the possible relationship(s)between the discount rate (D)and the expected long-term rate of return on plan assets (R)used for defined benefit pension plans.
A)D = R
B)D > R
C)D < R
D)D can be equal to, greater than, or less than R for any given firm

Quizplus · Accepted Answer

The discount rate (D) and the expected long-term rate of return on plan assets (R) used for defined benefit pension plans can vary relative to each other depending on the assumptions and financial policies of a given firm. Therefore, D can be equal to, greater than, or less than R, making option D the most complete description of the possible relationships.

Choose the Most Complete Description of the Possible Relationship(s)between the Discount