IFSB-1 does not differentiate between the rate of return risk and the interest rate risk since both risks cannot be exactly pre-determined.

Question

Quizplus · Accepted Answer

IFSB-1 does differentiate between the rate of return risk and the interest rate risk. Rate of return risk is specific to Islamic finance and arises from uncertainty in the returns of investment due to changes in market conditions, while interest rate risk is a general financial risk associated with changes in interest rates affecting the value of financial instruments.

IFSB-1 Does Not Differentiate Between the Rate of Return Risk