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Nowdays, joint ventures have grown tremendously between companies all over the world. Joint venture is a partnership between two or more parties that contribute equity of investment to manage a project. The sharing of profit and loss in joint ventures describes the application of diminishing musyarakah principle in investment according to Islamic scholars. The application of diminishing musyarakah...
Musyarakah contract is a joint venture contract between two or more parties where the profit is shared according to the agreed profit sharing ratio. The new musyarakah model internalizes this concept and takes into account the investment of two parties using two different rates of profit as well as two profit sharing rates. At present, this model is the only model that uses two profit sharing rates...
The paper gives brief review on two models called as Merton model and KMV-Merton model. Merton model is known as the triggers to the development of many credit risk models. Of all the credit risk models developed, the KMV-Merton model is the most popular. KMV-Merton model is developed to provide probabilistic assessment of firm's likelihood to default. Its ability in forecasting default for firms...
Asset acqusition is one of the many strategic ways to expand the business. One of the concept that can be applied is by using diminishing musyarakah concept. The application of diminishing musyarakah can help Muslims to avoid lending that based on riba since it based on syariah principle. Diminishing musyarakah can be defined as an arrangement of agreement whereby the bank as a capital provider allows...
On April 17, 1999, the Kuala Lumpur Stock Exchange, today known as Bursa Malaysia, launched a new index called Syariah Index (SI) to facilitate participation in the equity investment in accordance with Islamic syariah's principles. Syariah-based equity is basically shares of the company meeting the criteria of Islamic jurisprudence. Indices are used as a performance benchmark for portfolios such as...
Foreign exchange market is the most liquid and high volatility market. Many researches have been done to improve trading however the trading is mostly done conventionally. Research on foreign exchange trading is very active. Various techniques of forecasting were created. However the most important part is left unwritten: the framework of the trading. Therefore, this paper try to show the proposed...
The paper gives an overview of current conceptual framework for the credit risk assessment dedicated to banks. The framework utilises the Merton model to estimate the default probabilities of companies that are supposed to be the main borrowers causing a formation of a greater credit risk in banks. By doing this, banks are able to reaffirm the ability of their borrowers in meeting loans commitments...
Islamic banks in Malaysia offer varieties of products that use the Islamic concepts. Two of the concepts that are considered as dynamic concepts by most of Muslim economic scholars are mudharabah and musharakah. These concepts are also known as the equity-financing or the profit and loss contracts which to certain extend have some risks. Currently, less than 2% of Islamic products in Malaysia use...
Musyarakah contract is a joint venture between two or more parties and the profit is shared according to the agreed profit sharing ratio. Currently, less than 2% of the financial portfolio of Islamic banks in Malaysia uses this concept although most Muslim economist scholars consider it as a dynamic concept. The paper discusses quatitatively some type of profit and loss sharing contracts that maybe...
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