Question 1

**Section A**

Crescent Holdings, a cross-border multinational, wishes to raise $50 million for a new infrastructure project while strictly adhering to Islamic finance principles. They intend to issue financial instruments that represent proportional ownership in the tangible assets of the project, providing investors with a share of the profits generated by those assets.

Which Islamic finance instrument is Crescent Holdings planning to issue?

Accepted Answer

Identify the Islamic equivalent of a bond that represents asset ownership rather than a debt obligation.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Confusing Sukuk with Musharaka. Musharaka is an equity-like joint venture, whereas Sukuk is a tradable certificate backed by specific assets.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FM — Financial Management Practice Exam 4

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