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Categories of Hawalah

In general, hawalah (الحوالة) is an agreement to transfer or assign something to someone else. The subject matter (mahall- محل)...

Yields on Bank Deposits

By definition, a deposit is cash amounts, checks or drafts given or endorsed to a bank (depositee) and credited to...

Types of Event Risk Covenants

Event risk covenants are triggered by designated events, generally associated with a change in corporate control (e.g., mergers, acquisitions, restructuring,...

Sub-LIBOR Financing Using Swaps

The swap market allows borrowers (especially those at a disadvantage to borrower from banks) to lock in the best rates...

LIBOR Determination: an Example

LIBOR or the London interbank offered rate is the rate at which international banks charged each other for money borrowed...

Risks Involved In Musharakah Contract

A financial institution participating in musharakah contracts (whether permanent musharakah or diminishing musharakah) is typically exposed to four different types...

Difference Between Stack Hedge and Strip Hedge

A stack hedge is a hedging technique and a front load hedge which involves concentrating most of the futures contracts...

Difference Between Swaps and Swaptions

A swap is a derivative contract entailing the exchange of two different payment streams over the life of the contract....

Difference Between Swaptions and Forward-Start Swaps

A swaption is an option which has a swap as underlying. It gives the holder (buyer) the right but not...

Constructive Dividend: Concept and Calculation

A corporate distribution to a stockholder that is viewed by the tax authorities (such as the IRS) as a dividend...