a. Assume that you are the company's CEO and under pressure to meet the earnings target this year. The CFO suggests that if the company increases the expected return rate on pension assets, it can reduce pension expenses and meet the earnings target this year. What would you do? Give at least two reasons?

 

b. In reference to question: Discuss the possible implications of an increase in the expected return rate on pension assets. Please focus on the impact on pension assets' investment strategy after an increase in the expected rate of return?