Question
A. In February 2021, Bank X has RM3 million surplus funds and wishes to place it out for 30 days. At the same time, Bank
A. In February 2021, Bank X has RM3 million surplus funds and wishes to place it out for 30 days. At the same time, Bank Y also is in need of a similar amount for the same tenure. After both parties agreed with the terms of the transaction, the banks then execute their commodity murbaah transactions through the Bursa Suq Al-Sila (BSAS). BSAS is a commodity trading platform specifically dedicated to facilitate Islamic liquidity management and financing by Islamic financial institutions. The transaction started when Bank X will first purchase Crude Palm Oil (CPO) from the BSAS at spot price (RM3 million) and then sell the CPO to Bank Y at deferred payment, which is 3 per cent per annum profit margin. Bank Y, through Bank X acting as its agent, will subsequently sell the CPO to the BSAS at spot price (RM3 million), thereby generating a placement.
i. What is the profit payable to Bank X?
ii. What is the percentage return for Bank X?
iii. What type of profit earned by investing bank upon maturity?
B. Bank A purchased an NIDC instruments with a nominal value of RM2,000,000 and has the following details, calculate the price for this instrument.
Yield | 4.3% |
Issuance Date | 9 April 2020 |
Maturity Date | 9 August 2020 |
Settlement Date | 15 May 2020 |
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