Answer Happy

SECTION C: SHORT RESPONSES You are presented with 10 hypothetical scenarios where questions and/or comments related to Islamic capital markets are given. Based on what you have learned in this course, as well as other sources of reference you may want to obtain, provide a specific, relevant, reasoned and well-articulated response for each scenario. Each question will be worth 5 marks. You need not provide a very lengthy response. Quantity will not assure a high mark. Instead, grading will be based on accuracy and relevance. 1. Someone you know has made the following statement. “I am quite familiar with Islamic capital markets. I have taken Islamic home financing with an Islamic bank, my car is financed using a Shari'ah compliant vehicle financing instrument, and I also have an Islamic credit card.” 2. A friend is asking you: “I just discovered that as part of the Shari'ah stock screening process, they would calculate the extent of debt financing that a firm has undertaken. For example, in the case of Dow Jones, if the computed debt ratio does not exceed 33%, the company is still categorized as Shari'ah compliant. Does this mean that in Islam, riba is acceptable as long as it is not excessive, for instance, less than one third of what we borrow?”