Sorry if this has been posted before. On the free CFAI practice exam, they computed adjusted pension expense as interest cost plus service cost PLUS actual return on plan assets. Shouldn’t the actual return on assets be subtracted, not added? It’s pretty pathetic that such an error would appear on the official CFAI practice exam.
The actual return on plan assets was -41. You add it to SVC cost and Int Cost because it is a loss. Economic Pension Expense = SVC Cost (86) + Int Cost (147) - Actual Return (-41) = 274
I was just owned.
What did you get on the exam?
I keep hearing that the second practice exam is worse… I will find out in a few hours…
It is brutal. I got a 56! Time to get off AF and hit the books! And I got gypped - they asked one of the ethics questions twice and it was very poorly worded to boot!! Booooooo!
This is a good thing to know from that exam as economic pension expense = adjusted pension expenses. I got lucky in that questions…guessing worked.
I got 70%. I made a couple stupid mistakes, but it was stilll helpful in pointing out some of my weaknesses. I plan to take the 2nd one next weekend (the harder the better) and the full 6 hour mock exam the week prior to the exam.
i think there’s an error in the derivatives section. one of the answers should be negative instead of positive. it’s -200,000 something