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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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