Islamic Finance

What Is the Difference Between Gharar and Khatar?

October 30, 2021
Finance

Bells and Whistles

October 30, 2021

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A debt instrument (note) which comes with a step-up coupon; the amount of its coupon increases over time to maturity. In earlier periods, it pays a low coupon, and then in later periods it pays a higher coupon. This notes suits a high short-term rate environment. It might also be used for regulatory or tax purposes, among others.

It is called a step-up coupon note.

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