Vol2 Institution P431 insurance, increase, objective, interest, liability

joehogue

P431, Q2.B, for return objective, why we should focus on total return approach? is there any other approach which is not total return approach? why we can't focus on yield approach +inflation protected?

P436, Q8.B, for insurance company, what's the liability? It is mentioned that interest rate change and pass of time will affect liability duration, for this question, liability duration is shorted, how pass of time can cause duration to be shorter? can increase of interest rate cause duration to be shorter?

P442 Q8A, it is mentioned in the last three paragraph, invest in high yielding and long duration bonds, the duration of the liabilities will shrink...., I think it is wrong, invest in high yield and long term bond will cause the assset duration to be high, the duration of the liability will not be affected. text is wrong

P443, second paragraph, it is mentioned that policy suurender increase as interest rate increases, and the liability duration will be reduced, but why? I can't see any logic connnection, it will cause the liability to be low, but not the duration, isn't it?

P466, Q6A. how pension liability can be hedged by derivatives? does it mean as interest rate decrease, PV of PBO increase, liability increase, thus we should buy interest rate put and gain from derivative position?

in case of droping interest rate, should we use norminal bond or real bond to hedge the liability?