An Introduction to Islamic Finance: Theory and Practice

Financial Engineering 253 Structure Tamweel PJSC (asOriginator) Properties (1)Tamweel Limited Deutsche Bank AG London Branch (as ...

254 AN INTRODUCTION TO ISLAMIC FINANCE STRUCTURING TAMWEEL SUKUK (CONTINUED) passed to the investors, with no recourse back to t ...

Financial Engineering 255 LESSONS FROM THE FINANCIAL CRISIS The fi nancial crisis that started in 2007 has highlighted several s ...

256 AN INTRODUCTION TO ISLAMIC FINANCE analysis in a make - believe world can lead the unwary into unchartered waters or give a ...

Financial Engineering 257 with structured products, which require fair - value computation and proper accounting treatment of ga ...

258 AN INTRODUCTION TO ISLAMIC FINANCE scholar. Therefore, it is essential that serious research efforts be made col- lectively ...

Financial Engineering 259 of institutions and their customers. They need to assume an active role in understanding the nature of ...

260 AN INTRODUCTION TO ISLAMIC FINANCE safeguarding their faith, self, intellect, posterity and wealth. He constructs a detailed ...

261 APPENDIX C Potential Applications of Financial Engineering F ollowing are a few examples demonstrating the application of fi ...

262 AN INTRODUCTION TO ISLAMIC FINANCE the time of contract. However, application of bay’ al - salam to foreign cur- rency is no ...

Financial Engineering 263 Step 3: The bank determines the amount in the foreign currency required today (at T 0 ) to hedge X amo ...

264 AN INTRODUCTION TO ISLAMIC FINANCE The following illustrates the calculations involved in a synthetic forward contract and t ...

Financial Engineering 265 The importer is able to hedge his/her currency risk and the bank/inves- tor has earned a 10 percent re ...

266 AN INTRODUCTION TO ISLAMIC FINANCE CURRENCY SWAP Currency swaps are one of the most popular applications of fi nancial engin ...

Financial Engineering 267 A fi nancial intermediary can arrange such currency swaps through the following steps: Step 1: The fi ...

268 AN INTRODUCTION TO ISLAMIC FINANCE bonds in their payoffs, a currency swap can be constructed by utilizing the sukuk structu ...

Financial Engineering 269 Step 2: With the help of a fi nancial intermediary, both parties agree to enter into a currency swap w ...

270 AN INTRODUCTION TO ISLAMIC FINANCE exchange the rate of return on one asset with another, rather than exchang- ing interest ...

Financial Engineering 271 In this example, both parties agree to exchange cash fl ows to match their obligations to the sukuk ho ...

272 AN INTRODUCTION TO ISLAMIC FINANCE Table AC1 gives a summary of how a weighted composite index, which represents equity retu ...