Indices - Appendix C (Definitions)

Transcription

1. Shari ’ah Standard No. (27): Indices Appendix (C) Definitions Index Multiplier A specific ratio added to the difference in the price of the index on expiry of the date of the transaction. Centered Oscillating Indices These are the indices that fluctuate around a given center or point. They measure price change in a past period, and are used for forecasting probable future events. Such indices precede market movements and measure the rate of price change during the period under study. Ranged Oscillating Indices These are indices that fluctuate between two specific ranges, such as the limit of overbuying and the limit of overselling. Benchmark It refers to any index that represents the performance of a whole industry or a particular activity. It can be used as a standard for measuring the performance of investment funds and investment units, or used as an indicator for fixing remuneration for management or bonus for the investment agent or the Mudarib. Hedging It is a method for mitigating investment risks (such as market risks) by using financial instruments available in the market to curb down the risks that may arise from severe price changes. Divider It is the total price of the two shares, divided by the average price before division. 716
2. Shari ’ah Standard No. (27): Indices Index Contracts’ Multiplier It is a decimal or simple number, multiplied by the nominal value of a contract that has been connected to the performance of a certain index, to calculate the value of the contract based on the performance of that index. 717