Reference no: EM133227595

Question 1. Discuss the difference between a conventional lease and I jara in terms of

a. Purchase of lease asset

b. Signing of lease contract

Question 2. A small Start up construction company has won the bid to build a school playground. The company needs one excavator to dig the ground at the start of the construction project . The company does not have the finances to buy the excavator. Suggest two possible products from Islamic Finance to the company. Of the two solution, which is better and why

Question 3. Arbaz Bank provides leasing facilities to both retail and business customers. A bank client applies for Ijara Wa Tqtina to acquire specialized equipment for its food processing business. Assume that the total cost to the bank to purchase, deliver and setup the equipment at the client's premises is $ 50,000. The total lease period agreed is 5 years and the agreed profit rate for the facility is 6 % per annum.

a. Calculate the total lease rentals.

b. monthly lease payment the client is required to make.

Question 4. Explain how an Islamic bank gets involved in a Salam and a parallel Salam contract, discuss the parties and the differences of these two contracts

Question 5. Describe the process involved in Istisna and parallel Istisna contract

Question 6. Give a brief discussion on Performance risk and Credit risk of banks associated with Istisna

Question 7. Abdulla wants to manufacture specialized coffee machines for his Coffees of the World shop in Abu Dhabi. He contacted the Shariah Bank and requested the bank to finance his acquisition of these customized machines. Abdulla provided the bank with the specifications , quantity and other details of the machines to be manufactured . The bank contracted the Middle East Machine Suppliers to manufacture the machines with the exact details as provided by Abdulla. The bank signed the purchase agreement with Middle East Machine for payment during manufacture in instalments and the bank also signed agreement with Abdulla for instalment payments after delivery.

A. What type of Islamic banking contract is this describe.

B. Explain if this is an asset- based or equity - based Islamic banking Contract.