Question 4 (1 point) XYZ SA, a hypothetical company, offers its employees a defined benefit pension plan. Information on XYZ's retirement plans is presented in Exhibit 2. It also grants stock options to executives. Exhibit 3 contains information on the volatility assumptions used to value stock options EXHIBIT 2 XYZ SA Retirement Plan Information 2009 Employer contributions 1,000 Current service costs 200 Past service costs 120 Discount rate used to estimate plan liabilities 7.00% Benefit obligation at beginning of year 42,000 Benefit obligation at end of year 41,720 Actuarial loss due to increase in plan obligation 460 Plan assets at beginning of year 39,000 Plan assets at end of year 38,700 Actual return on plan assets 2,700 Expected rate of return on plan assets 8.00% EXHIBIT 3 XYZ SA Volatility Assumptions Used to Value Stock Option Grants Grant Year 2009 valuation assumptions Weighted Average Expected Volatility for 2005-2009 - 21,50% Grant Year 2008 valuation assumptions Weighted Average Expected Volatility for 2004-2008 - 23.00% The retirement benefits paid during the year were closest to: 1) 3,000 2) 4,000. 3) 280