Open ended questions

Westminster International University in Tashkent
Islamic Finance 5FNCE004C, 2022/2023, Semester 2
Seminar 8
OPEN ENDED QUESTIONS.

1. 
   Describe the AAOIFI 2008 ruling on the sukuk tradability.
   
2. 
   What are the six basic categories used by IIRA to analyze sovereign sukuk and the likelihood of any default on debt obligations at maturity?
   
3. 
   List the eight major rating products identified by the IIRA.
   
4. 
   Explain the methodology employed in rating the issuer of sukuk.
   
5. 
   Identify the key elements considered by IIRA when assessing the level of compliance of a financial institution or corporate entity with the requirements of the Shari‘ah.
   

TRUE/FALSE QUESTIONS.

1. 
   The designated grades for credit rating range from ‘AAA’ which is considered as the lowest grade to ‘C’.
   
2. 
   The Islamic International Rating Agency (IIRA) which began operations in 2009 has since been striving to ensure the expansion of the Islamic finance industry.
   
3. 
   Islamic bonds can be rated on two bases: sovereign rating and country rating.
   
4. 
   Banks financial strength ratings place emphasis on the ability of financial institutions to make profits and pay dividends.
   
5. 
   The Sharī‘ah quality rating aims at informing the investing public on the level of compliance of certain corporate entities with the requirements of the Sharī‘ah.
   

MULTIPLE CHOICE QUESTIONS.

1. 
   The real estate rating methodology designed by IIRA evaluates:
   

1. 
   all on-going projects of the developer
   
2. 
   the developer’s activities such as the performance of its architects, engineers, and contractors
   
3. 
   the level of fairness, transparency, responsibility and accountability of the developer
   
4. 
   a and b
   

2. 
   In order for corporate entities to win the confidence of prospective investors, they must:
   

1. 
   reduce their risk level
   
2. 
   demonstrate their ability to meet all financial obligations
   
3. 
   offer their employees generous compensation packages
   
4. 
   a and b
   

3. 
   Which of the following is not a set of fundamentals that are considered in the assessment of the banks’ financial strength?
   

1. 
   liquidity and funds management
   
2. 
   asset/liability management
   
3. 
   number of bank outlets
   
4. 
   adjustments to achieve economic reality
   

4. 
   Assessing the level of compliance of a financial institution or corporate entity with the requirements of the Sharī‘ah include the following major element(s):
   

1. 
   corporate governance framework
   
2. 
   code of ethics adopted by the institution
   
3. 
   monetary policy and flexibility
   
4. 
   all of the above
   

5. 
   The ratings of the issuer of sukuk places particular emphasis on:
   

1. 
   the level of compliance of certain corporate entities with the requirements of the Sharī‘ah.
   
2. 
   the investment quality and/or credit worthiness
   
3. 
   the issuer continued ability to fulfil its debt obligations to the stakeholders particularly the investors
   
4. 
   all of the above