Topic 8 Islamic Money Market a

Money market securities have all the following characteristics EXCEPT they are not _______ .

• short term

• money

• low risk

• very liquid

The ___________ is a monetary policy tool that use to determine the amount of deposits that banks must hold.

• open market operations

• reserve requirements

• discount ratio

• federal funds rate

All the following are the contract normally use in Islamic Interbank Market, EXCEPT:

• Mudarabah

• Murabahah

• Kafalah

• Wakalah

Which of the following is FALSE about the Bursa Suq Al-Sila?

• Subsidiaries of Bursa Malaysia

• Platform for commodity murabahah

• Use crude palm oil as the underlying asset

• None

Which of the following is NOT the money market instruments?

• Commercial Paper

• Banker's Acceptance

• Repurchase Agreement

• Factoring

Negotiable Certificate of Deposit in Money Market Instrument is ___________ .

• An agreement which the bank sells its valued papers to investor with an understanding to repurchase them at agreed price on a specified future date.

• A document which certifies that a certain sum of Ringgit has been deposited with a financial institution at a specified rate of interest with a specified maturity period.

• Bill of exchange which are drown on and accepted by commercial or merchant banks in Malaysia.

• Payable to order and entitle the holder the payment of a fixed deposit sum on maturity.

The following are the comparison between Islamic and conventional money market instrument, EXCEPT?

• Islamic money market must be approved by the relevant Shariah authority, while for conventional money market approved by the relevant financial regulator.

• Islamic money market structured based on assets, equity and debt, while for conventional money market structured based on loan contract only.

• Islamic money market and conventional have same on obtaining short-term funding based on Shariah laws and principles.

• Islamic money market opens for both Islamic and conventional investors, while for Conventional opens only for conventional investors only.

Islamic money market is a key appendage of the banking system.

• TRUE

• FALSE

In money market, the instrument with the least risk of default is __________ .

• Repurchase Agreement

• Commercial Paper

• Treasury Bills

• Banker's Acceptance

Yield on ______________ are typically higher than government securities. These flexible instruments help issuers to meet their short-term funding needs in that the issuers may roll over the debt by issuing new papers to redeem outstanding ones.

• Negotiable Certificate of Deposit

• Repurchase Agreement

• Commercial Paper

• Treasury Bills