In the context of pension fund management, fund managers are tasked with balancing multiple policy, risk, and return requirements. Which of the following statements accurately illustrates the principles of risk management within the pension fund sector?

Exam-Like

A pension plan's total VaR is equal to the sum of its policy-mix VaR and active management VaR.

12.5%

Pension fund risk analysis does not consider performance relative to a benchmark.

8.3%

In most defined-benefit pension plans, if liabilities exceed assets, the shortfall does not create a risk for the plan sponsor.

16.7%

From the plan sponsor's perspective, nominal pension obligations are similar to a short position in a long-term bond.

62.5%

Financial Risk Manager Part 2