Document Details

Document Type : Article In Journal 
Document Title :
Debt and Equity in a Primary Financial Market: A Theory with Islamic Implications
سندات الدين والأسهم في سوق مالية أولية ـ نظريتها ودلالاتها الإسلامية
 
Subject : Articles  
Document Language : English 
Abstract : Emphasizing risk averse nature of fund suppliers in an uncertain environment, this paper establishes the possibility of a riba-free Pareto optimality in a primary financial market, explaining real life dominance of the mixed debt/equity system in terms of deviation from informational efficiency. Risk premia normally associated with equity returns are definite indicators of risk-aversion on the part of demand side real investors. Under totally undiversifiable risk, a financial investor may prefer equity to risk free asset even though he is more risk-averse than the demand side issuer of equity. It concludes that free market dynamic forces generate a financial order giving privileges to active demanders of funds rather than sympathizing' with risk-averse suppliers of funds as conventional analysis implies. Theoretical claims of efficiency losses in the financial supply process due to Islamization appear to be groundless. 
ISSN : 1018-7383 
Journal Name : Islamic Economics Journal 
Volume : 4 
Issue Number : 1 
Publishing Year : 1412 AH
1992 AD 
Number Of Pages : 30 
Article Type : Article 
Added Date : Sunday, October 11, 2009 

Researchers

Researcher Name (Arabic)Researcher Name (English)Researcher TypeDr GradeEmail
سيفالدين إبراهيم تاجالدين SEIF I. TAGEL-DINResearcher  

Files

File NameTypeDescription
 21007.pdf pdf 

Back To Researches Page