Suppose XYZ pension fund has a PBO of 3000, and this liability has a duration of 12 years. It has pension fund assets of 3000, of which 700 is invested in bonds and 2300 in stocks. The bond portfolio has a duration of 6 years. All else equal, if market interest rates fall by 2%, then it is likely that

The fund will then be in surplus

the fund will then be in def