Islamic financial institutions can avoid or elimimate (a) non-standardization of

Question

Islamic financial institutions can avoid or elimimate (a) non-standardization of all business-related activities (b) increase time of holding of the trading commodities (c) construction of a diversified portfolio (d) not to fulfill the binding of contracts 11. their risk through and processes 12. Operational Risk refers as (a) transactions Risk (b) fraud Risk (c) legal Risk (d) all of the above (e) none of the above Sukuk investors observed liquidity risk because (a) delay or default on payments/repayments by the originator (b) 13. asset value falls reducing repayment amount on maturity () no buyers in secondary market for sukuk (e) none of the above 14. Financial institutions detect fraud through (a) operational Audit (Internal and External) (b) loan collection policies (c) client sampling (d) customer's complaints (e) all of the above (a) "An Islamic REIT is a collective investment scheme in real estate, in which the tenants operate (b) "A REIT is physically able to generate stable, sustainable income through rental income and (c) "The total return of REITs is subject to the performance of the property market. Hence, the unit 15. Islamic REITs is defined as: permissible activities according to the Shari'ah" capital appreciation, which can be used to continually pay regular dividends" price of a REIT may go down if its underlying properties drop in value." (d) "REITs are also subject to the vagaries of market demand and supply. As such, market fluctuations, confidence in the economy and changes in the interest rates may affect REITs price"

Explanation / Answer

Answers are as follows:

11.(c)construction of a diversified portfolio.Since diversification reduces risk

12.(d) all the above.the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk.

13.(c) no secondary market- the Sukuk structures are exposed to a liquidity risk because there is currently no well structured and sufficiently liquid secondary market and most of the certificates tend to be held until maturity.

14.(e) all the above. All policies mentioned help in fraud detecting .

15(a)ISLAMIC REAL ESTATE AND INVESTMENTS TRUSTS-REITS

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