MANAGEMENT

Detailed explanation-1: -From Shari’ah perspective financial risk can be classified as forbidden risk, essential risk and tolerable risk. Forbidden risk must be avoided in order to make a financial transaction Shari’ah complaint. Islamic hedging strategies are only applicable to ‘tolerable financial risk’.

Detailed explanation-2: -In Islam, gambling (Arabic: , romanized: maisîr, maysir, maisira or qimâr) is absolutely forbidden (Arabic: harām).

Detailed explanation-3: -Also known as maysir. Means speculation or gambling. Maisir is prohibited in Islamic finance because it creates wealth from chance instead of productive activity.

Detailed explanation-4: -Risk is defined as Mukhatarah, which literally means danger, while some studies related to Islamic finance generally define risk as uncertainty. This uncertainty refers to Gharar. Meanwhile, Mukhatarah is an essential element that makes a contract legal and binding according Shari’ah principle.