In this study, we analyze portfolio performance under different methods and scenarios for the small island economy of Fiji. In addition to documenting the historical performance and the smallness of the stock market, the study looks at the possibility of opting for an equally weighted (naïve)...

While a decline in the market value of sovereign assets (below a benchmark level of liabilities) can trigger sovereign distress/default risk, volatility in sovereign assets can increase the risk premium on domestic debt and credit spread on external debt. These can escalate the probability of...