Which of the following statements about risk management in the pension fund industry is correct?
A.  A pension plan’s total VaR is equal to the sum of its policy-mix VaR and active-management VaR.
B.  Pension fund risk analysis does not consider performance relative to a benchmark.
C.  In most defined-benefit pension plans, if liabilities exceed assets, the shortfall does not create a risk for the plan sponsor.
D.  From the plan sponsor’s perspective, nominal pension obligations are similar to a short position in a bond.
Answer:D
Liabilities at a pension fund are typically composed of accumulated benefit obligations, measured by the present value of all pension benefits owed to employees discounted by an approximate interest rate. When liabilities consist mostly of nominal payments, their value in general will behave like a short position in a long-term bond.