chaojimali

My main argument is the statement explaining the answer, i.e., "A lower discount rate will increase the defined benefit obligation and increase the interest cost component of the periodic pension cost (the increase in the obligation will, in most cases, more than offset the decrease in the discount rate)."

... is not correct, because impact on earnings is related to pension expense, not DBO balance. Since pension expense is lower with a lower discount rate, NI is higher.