Pricing of Al-Urbun and a Class of Al-Istijrar Islamic Contracts under the Black–Scholes Framework

Joanna Goard () and Mohammed AbaOud
Additional contact information
Joanna Goard: School of Mathematics and Applied Statistics, University of Wollongong, Wollongong, NSW 2522, Australia
Mohammed AbaOud: Department of Mathematics and Statistics, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh 11564, Saudi Arabia

Mathematics, 2024, vol. 12, issue 2, 1-11

Abstract: Islamic financial contracts necessarily need to abide by Shariah principles. As such, some contracts have been introduced for risk-hedging real transactions that differ from those seen in conventional financial markets. In this paper, we examine two such products, Al-Urbun and Al-Istijrar, and determine fair prices for both the Al-Urbun and a class of Al-Istijrar under the Black–Scholes framework.

Keywords: Al-Urbun contract; Al-Istijrar contract; Black–Scholes equation; Islamic finance (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7390/12/2/252/pdf (application/pdf)
https://www.mdpi.com/2227-7390/12/2/252/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jmathe:v:12:y:2024:i:2:p:252-:d:1318089

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().