Voci

Question 1

Riba

Answer 1

Interest (prohibited)

Question 2

Gharar

Answer 2

Uncertainty: both parties should have complete information

Question 3

Maysir and Qimar

Answer 3

Gambling: acquisition by chance (maysir) and qimar: game gambling

Question 4

Bullish

Answer 4

Expectation of RISE in the price of the underlying

Question 5

Bearish

Answer 5

Expectation of FALL in the price of underlying

Question 6

Hedge

Answer 6

Insurance

Question 7

Long

Answer 7

Purchasing

Question 8

Short

Answer 8

Selling

Question 9

Flat/ square

Answer 9

Having no position»no exposure to price changes

Question 10

Leverage

Answer 10

Using borrowed funds to make investments

Question 11

To be long

Answer 11

Generate positive reuturns if prices rise

Question 12

To be short

Answer 12

Generate positive returns when prices fall

Question 13

Systematic risk

Answer 13

Market risk = Non-diversifiable risk

Question 14

Unsystematic risk

Answer 14

Specific risk = Diversifiable risk

Question 15

Beta

Answer 15

Measures systematic = market risk of a security

Question 16

Positive beta

Answer 16

RoA moves in the same direction as the market

Question 17

Neg. beta

Answer 17

RoA moves in opposite direction