The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: Is covered option Islamic? Why or why not?

Answer: An option, whether covered or naked, differs fundamentally from a stock. A stock representsa share in ownership, equity, of a real company producing goods or services and generally contributingto the economy in a substantial manner. When you buy stock, you help to raise capital for business,

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: My question has to do with preferred stock and whether or not they are halal. In the lesson it mentioned that those that pay dividends are guaranteed, so it is not allowed. This is true of cumulative preferreds, but regularly "non-cumulative preferreds" only pay dividends when the company has earnings. My question is, the security haram if it is guaranteed, or is it haram if it pays a fixed dividend?

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: How exactly is investment income 'purified' and how is the amount that comes from interest calculated?

Answer: Please review Lesson Six: Zakah and Purification, particularly the section entitled: "Purification as a Fiscal Responsibility". You may also want to try the exercise that is given there.

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: In this chap. it states that leasing is haram. Because the contract is kept suspensefor a certain amount of years. I've always thought that islamic banks do conduct their businessthis way. For example, say that you are leasing a car from a financial institution. Doesnt theislamic bank buy ther car and then they lease it to you for a set amount of years, and when the

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: In lesson 1 we learnt how a Muslim investor may trade in common stock so long as thepreconditions apply. In the section "The debate over Riba" it was clearly mentioned that whena company derives benefit from interest, the Muslim investor will be responsible for cleansinghis holdings.

My question is :

1) How can one work out what percentage of riba is involved in their money ? It would seem

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: My understanding was that only in extreme cases should a Muslim tolerate riba.For example, scholars have allowed Muslims to hold bank accounts even if they incur intereston the pretext that they cleanse their money from the interest accumulated.

In the case of bank accounts it could be accounted as a need since it would almost beimpracticle for one to keep his money at home in paper form. Thus the need for a bank account

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: I am having trouble understanding the difference between murabahah and interest. What isthe difference between buying a car with a fixed rate of profit in installments and paying a carnote that involves riba? Aren't loans that include riba at a fixed rate also? Can the middle personcharge a higher price because the payment is in installments?

Answer: There is in fact a world of difference between the two. Unfortunately, though, because the end

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: Is there an area where buying and selling stock, even if it is acceptable stock, when itbecomes like gambling? Especially when it is short-term speculation. If it is, then where is thedividing line? And is day trading allowed by the Shari'ah in the qualifying stocks?

Answer: There is a well known hadith of the Prophet, upon him be peace, which is also an important

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: How does one goes about understanding the ruling of the different schools of thought (madhaahib) when so few people (in my world) know about the subject of finance?

Answer: This is a very good question. In fact, there are very few people qualified to help out in these matters at the present time. This is why Islamic financial institutions, if they are serious about Shari`ah compliance, will be sure to appoint Shari`ah Supervisory Boards.

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: Who are the scholars of the shari'ah board. What are their orientations, especially when it comes to interpreting the different schools of thought?

Answer: The scholars of the Dow Jones Islamic Market Index Shari`ah Board are featured, withtheir bios, at the DJIMI website. Obviously, they are a group of very accomplished scholars.With regard to their legal orientation, the members of the Shari`ah Board represent nearly all