Islamic Finance

Forward-Dated Ijarah

August 4, 2021
Islamic Finance

Forward Ijara

August 4, 2021

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A reset option (put option) whose strike price is reset to the prevailing price of its underlying on a predetermined reset date if the option is in-of-the-money on that date. The strike price at expiration is not fixed at initiation, but rather it depends on the actual realization of the asset price path, i.e., the asset values on the predetermined reset dates.

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