Imam Sadiq University "Islamic Finance Research" (IFR) 2251-8290 2 2 2013 04 21 Designing and Financial Feasibility Study of Mozare'e Securities in Iran’s Money and Capital Market Designing and Financial Feasibility Study of Mozare'e Securities in Iran’s Money and Capital Market 7 24 1641 10.30497/ifr.2013.1641 FA Dawoud Manzour Associate Professor, Faculty of Islamic Studies and Economics Kamal Babaee Zarch کارشناسی ارشد معارف اسلامی و مدیریت مالی دانشگاه امام صادق علیه‌السلام Journal Article 2012 08 22 One of the capital market financial instruments, especially in Islamic countries, is Sukuk or Islamic securities. Sukuk is based on Islamic law. Different types of Sukuk are available for different economic situations of countries and different investors. One type of Sukuk is mozare'e which is the subject of this research. To do this, we have used financial indices of crops to compare mozaree securities, bank deposits, and stock exchange index. First, we got financial information of 23 agricultural products in the years 1381 to 1390 from the Ministry of Agriculture. By calculating the financial indices of return and risk for these products, we compared these indices with the investment risk and return in banks and stock exchange index during the same period. The result shows that return of investment in all crops is more than returns from bank deposits and stock exchange index. It has also been revealed that investment risk in all crops is more than bank deposits, while it is less than stock exchange index. One of the capital market financial instruments, especially in Islamic countries, is Sukuk or Islamic securities. Sukuk is based on Islamic law. Different types of Sukuk are available for different economic situations of countries and different investors. One type of Sukuk is mozare'e which is the subject of this research. To do this, we have used financial indices of crops to compare mozaree securities, bank deposits, and stock exchange index. First, we got financial information of 23 agricultural products in the years 1381 to 1390 from the Ministry of Agriculture. By calculating the financial indices of return and risk for these products, we compared these indices with the investment risk and return in banks and stock exchange index during the same period. The result shows that return of investment in all crops is more than returns from bank deposits and stock exchange index. It has also been revealed that investment risk in all crops is more than bank deposits, while it is less than stock exchange index.

https://ifr.isu.ac.ir/article_1641_10c272d06794d3e5785d5e7c5356e9ff.pdf

Imam Sadiq University "Islamic Finance Research" (IFR) 2251-8290 2 2 2013 04 21 Imamiah Jurisprudence Perspectives on Commodity Swaps Imamiah Jurisprudence Perspectives on Commodity Swaps 25 54 1642 10.30497/ifr.2013.1642 FA Sayyed Abbas Mousavian Professor of the Institute of Islamic Culture and Thought Hossein Tamalloki Bachelor's degree in Financial Management from Imam Sadiq University Journal Article 2015 08 23 Nowadays, with the development of financial institutions and the extension of business scope, risk management has found major significance in economic studies. Today, various approaches and tools are designed to manage and reduce different types of risks. Commodity swaps, which is considered as one type of swaps, have a critical role in managing and hedging against the risk of basic commodities such as oil, petrochemical products, energy, precious metals and agricultural products. This article, besides introducing this financial tool by using a juridical approach, tries to investigate the possibility of applying this contract from the perspective of Imamiah jurisprudence and examines the possibility of the adaptation of this tool to the common Islamic contracts. One of the most useful tools in managing risks is swap contracts in which a set of fixed cash flows is exchanged with a set of floating cash flows. In this study, the possibility of adaptation of commodity swaps to "Bai'al-dain bil dain", "Ba'i al-Kali bil Kali" and "Solh dain bil dain" has been examined and the possibility of application of commodity swaps in "Solh dain bil dain" is confirmed. Due to the doubt of being Gharar and Riba, it has been concluded that the common western commodity swaps are not compatible and adaptable to Imamiah jurisprudence. Finally, it has been mentioned that the possible solution for resolving this doubt is to exchange the commodity in the settlement date during the contract period. Doing so, commodity swaps have the whole general conditions of a true and correct contract. Nowadays, with the development of financial institutions and the extension of business scope, risk management has found major significance in economic studies. Today, various approaches and tools are designed to manage and reduce different types of risks. Commodity swaps, which is considered as one type of swaps, have a critical role in managing and hedging against the risk of basic commodities such as oil, petrochemical products, energy, precious metals and agricultural products. This article, besides introducing this financial tool by using a juridical approach, tries to investigate the possibility of applying this contract from the perspective of Imamiah jurisprudence and examines the possibility of the adaptation of this tool to the common Islamic contracts. One of the most useful tools in managing risks is swap contracts in which a set of fixed cash flows is exchanged with a set of floating cash flows. In this study, the possibility of adaptation of commodity swaps to "Bai'al-dain bil dain", "Ba'i al-Kali bil Kali" and "Solh dain bil dain" has been examined and the possibility of application of commodity swaps in "Solh dain bil dain" is confirmed. Due to the doubt of being Gharar and Riba, it has been concluded that the common western commodity swaps are not compatible and adaptable to Imamiah jurisprudence. Finally, it has been mentioned that the possible solution for resolving this doubt is to exchange the commodity in the settlement date during the contract period. Doing so, commodity swaps have the whole general conditions of a true and correct contract.

https://ifr.isu.ac.ir/article_1642_81c650caac28cdefce4de5ddc18befa0.pdf

Imam Sadiq University "Islamic Finance Research" (IFR) 2251-8290 2 2 2013 04 21 A Jurisprudential Feasibility Study of Designing Interest Rate Swap in Proportion to the Iranian Capital Market A Jurisprudential Feasibility Study of Designing Interest Rate Swap in Proportion to the Iranian Capital Market 55 86 1643 10.30497/ifr.2013.1643 FA Gholam Ali Masouminia Associate Professor, Faculty of Economics, Kharazmi University Mahdi Elahi PhD student in financial management at Allameh Tabatabai University Journal Article 2015 08 23 Swap contracts, as kind of derivative instruments, are of high importance and usage in financial markets. One widely-used sort of them is interest rate swap contract. As the Iranian financial market is developing, it is needed that all new instruments be assessed by jurisprudential standards. In this article, besides examining interest rate swap contract with regard to its different definitions, sorts, features, models, applications, advantages, disadvantages, and the necessity of its being used in the Iranian financial market, we have assessed its jurisprudential and juridical aspects for the first time. By examining the jurisprudential aspect of interest rate swap contract using a descriptive-analytical and documentary approach, this article tries to prove the hypothesis that although such a contract in proportion to Iranian financial market is not amendable due to the presence of usury in the form of Bai and Muawadah, it may be designed through "Bai al khiar". Swap contracts, as kind of derivative instruments, are of high importance and usage in financial markets. One widely-used sort of them is interest rate swap contract. As the Iranian financial market is developing, it is needed that all new instruments be assessed by jurisprudential standards. In this article, besides examining interest rate swap contract with regard to its different definitions, sorts, features, models, applications, advantages, disadvantages, and the necessity of its being used in the Iranian financial market, we have assessed its jurisprudential and juridical aspects for the first time. By examining the jurisprudential aspect of interest rate swap contract using a descriptive-analytical and documentary approach, this article tries to prove the hypothesis that although such a contract in proportion to Iranian financial market is not amendable due to the presence of usury in the form of Bai and Muawadah, it may be designed through "Bai al khiar".

https://ifr.isu.ac.ir/article_1643_f670ef5d2d6bdf8f29450a970494dd64.pdf

Imam Sadiq University "Islamic Finance Research" (IFR) 2251-8290 2 2 2013 04 21 Modified Standard Risk Assessment Based on Optimal Capacity Investment Decisions and Portfolio Optimization (Infrastructure Speculation and New Financial Instrument) Modified Standard Risk Assessment Based on Optimal Capacity Investment Decisions and Portfolio Optimization (Infrastructure Speculation and New Financial Instrument) 87 122 1644 10.30497/ifr.2013.1644 FA Fereidoun Rahnamay Roudposhti Professor, Department of Finance and Accounting, Islamic Azad University, Science and Research Branch Yavar Mirabasi PhD student in Financial Management, Islamic Azad University, Science and Research Branch Journal Article 2015 09 15 In order to use an Islamic financial instrument, this paper intends to measure and evaluate negative and positive deviations from target rate of return in investment opportunity evaluation,that leads to presenting an upside potential- adjusted risk measure. This risk measure named Upside Potential Adjusted Risk Measure (ALPM) is generally applicable and provides assumptions of Variance, Downside Risk, LPM and UPM leading to the same results. It adjusts the downside risk of an investment opportunity by using the investors’s personal viewpoints and incorporates the probability and the size of upside potential in risk measurement. ALPM, which is applicable in individual security risk measurement and portfolio optimization, calculates risk by downside risk and upside potential. ALPM can solve important paradoxes of decision making, namely the Allais, the Ellsberg and the St. Petersburg Paradox, and is applicable in portfolio optimization in order to maximize the expected rate of return and minimize the upside potential adjusted risk. In order to use an Islamic financial instrument, this paper intends to measure and evaluate negative and positive deviations from target rate of return in investment opportunity evaluation,that leads to presenting an upside potential- adjusted risk measure. This risk measure named Upside Potential Adjusted Risk Measure (ALPM) is generally applicable and provides assumptions of Variance, Downside Risk, LPM and UPM leading to the same results. It adjusts the downside risk of an investment opportunity by using the investors’s personal viewpoints and incorporates the probability and the size of upside potential in risk measurement. ALPM, which is applicable in individual security risk measurement and portfolio optimization, calculates risk by downside risk and upside potential. ALPM can solve important paradoxes of decision making, namely the Allais, the Ellsberg and the St. Petersburg Paradox, and is applicable in portfolio optimization in order to maximize the expected rate of return and minimize the upside potential adjusted risk.

https://ifr.isu.ac.ir/article_1644_89f03f7d02720160f1b04cf5b27f5ccb.pdf

Imam Sadiq University "Islamic Finance Research" (IFR) 2251-8290 2 2 2013 04 21 Credit Risk Management in Islamic Banking Coupled with an Approach to Examining the Contracts and Patterns of Granting Credits Credit Risk Management in Islamic Banking Coupled with an Approach to Examining the Contracts and Patterns of Granting Credits 123 156 1645 10.30497/ifr.2013.1645 FA Mohammad Naghi Nazarpour Mofid University faculty member Ali Rezaee Master of Economics Journal Article 2015 08 23 Considering the nature of banking activities, credit risk plays the biggest role in its profit-making capacity. The nature of credit risk is such that despite the existing innovations in the banking system, the credits granted to the borrowers by the banks still face a rather high risk of not being returned, and this is the predominant reason for the unsuccessful performance of the banks. During the past decade, the increasing loss created by the lack of return of the outstanding credits, scaling down the realized profit and preventing banks from facing bankruptcy has led to the expansion of the idea of measuring and controlling the risks associated with granting credits by the financial institutions or banks. With the help of descriptive method and content analysis using secondary sources (i.e. books), the present article tries to prove the hypothesis that compared with partnership contracts (i.e. partnership financing or joint venture), exchange contracts create lower credit risk for the banks. Based upon the findings of this article, though the Islamic non-partnership (exchange) contracts bear lower risks, one must bear in mind that they still contain risks and expose the Islamic banks to certain credit risks. In the absence of a proper system for managing credit risks, the banks will not have the capabilities to recognize the probable degree of Credit Risks, hence unable to evaluate the scale of probable losses occurring due to the lack of return of the so-called granted or the outstanding credits. This fact leads to the banks' inability to optimize their funds, and their profit-making potentialities will face a major threat. In the closing chapter, eight comprehensive solutions to decrease banks' credit risks are proposed, which can prevent their ultimate bankruptcy. Considering the nature of banking activities, credit risk plays the biggest role in its profit-making capacity. The nature of credit risk is such that despite the existing innovations in the banking system, the credits granted to the borrowers by the banks still face a rather high risk of not being returned, and this is the predominant reason for the unsuccessful performance of the banks. During the past decade, the increasing loss created by the lack of return of the outstanding credits, scaling down the realized profit and preventing banks from facing bankruptcy has led to the expansion of the idea of measuring and controlling the risks associated with granting credits by the financial institutions or banks. With the help of descriptive method and content analysis using secondary sources (i.e. books), the present article tries to prove the hypothesis that compared with partnership contracts (i.e. partnership financing or joint venture), exchange contracts create lower credit risk for the banks. Based upon the findings of this article, though the Islamic non-partnership (exchange) contracts bear lower risks, one must bear in mind that they still contain risks and expose the Islamic banks to certain credit risks. In the absence of a proper system for managing credit risks, the banks will not have the capabilities to recognize the probable degree of Credit Risks, hence unable to evaluate the scale of probable losses occurring due to the lack of return of the so-called granted or the outstanding credits. This fact leads to the banks' inability to optimize their funds, and their profit-making potentialities will face a major threat. In the closing chapter, eight comprehensive solutions to decrease banks' credit risks are proposed, which can prevent their ultimate bankruptcy.

https://ifr.isu.ac.ir/article_1645_c1fea270c48e8079d8ddf7d06d26ab52.pdf

Imam Sadiq University "Islamic Finance Research" (IFR) 2251-8290 2 2 2013 04 21 Comparison of Risk and Return between the Time-Value Based Contracts and Economic Value- Added Based Contracts According to Sharp, Jenson and Trinor Measures Comparison of Risk and Return between the Time-Value Based Contracts and Economic Value- Added Based Contracts According to Sharp, Jenson and Trinor Measures 157 178 1646 10.30497/ifr.2013.1646 FA Golam Reza Mesbahimoghadam Associate Professor, Faculty of Islamic Studies and Theology, Imam Sadiq University 0000-0003-2646-9010 Mohammad Mahdi Asgari Associate Professor, Faculty of Islamic Studies and Economics, Imam Sadegh University 0000-0002-3922-5165 Mohammad Amin Alinaghi Langari PhD Student in Financial Management, Imam Sadiq University Journal Article 2015 09 15 One of the most important questions in Islamic banking system is about the best method for calculating the interest rate of loans and deposits. This paper compares two methods : time- value method and economic value- added method and tries to answer this question that, based on the information gathered from the financial statements of a sample of the accepted firms in the Iranian exchange market, which method makes more risk-adjusted return. In regard to the fact that the current Islamic banks almost do not use any kind of economic value- added based contracts, we have examined the financial statements of 26 companies in 5 industrial groups to simulate the adjusted return of economic value- added based loans and then compare them with the adjusted return of the time value of money- based loans. We have used the Sharp, Trinor, adjusted Trinor and Jenson indexes for the comparison of the two kinds of loan adjusted returns. We have concluded in the general data analysis and also the classified data analysis that the simulated adjusted returns of the economic value- added based loans were more than the real adjusted return of the time value of money-based contracts. This can create adequate incentives for the Islamic financial system designers to design and implement economic value-added based loans. One of the most important questions in Islamic banking system is about the best method for calculating the interest rate of loans and deposits. This paper compares two methods : time- value method and economic value- added method and tries to answer this question that, based on the information gathered from the financial statements of a sample of the accepted firms in the Iranian exchange market, which method makes more risk-adjusted return. In regard to the fact that the current Islamic banks almost do not use any kind of economic value- added based contracts, we have examined the financial statements of 26 companies in 5 industrial groups to simulate the adjusted return of economic value- added based loans and then compare them with the adjusted return of the time value of money- based loans. We have used the Sharp, Trinor, adjusted Trinor and Jenson indexes for the comparison of the two kinds of loan adjusted returns. We have concluded in the general data analysis and also the classified data analysis that the simulated adjusted returns of the economic value- added based loans were more than the real adjusted return of the time value of money-based contracts. This can create adequate incentives for the Islamic financial system designers to design and implement economic value-added based loans.

https://ifr.isu.ac.ir/article_1646_e4873aa9a05cc5ed839561d121516766.pdf