| The global financial crisis made it clear to investors and fund managers that the risk inherent in financial instruments is not necessarily indicated accurately by their pricing. It has become increasingly important that funds with exposure to the fixed income market understand a bond's various risks and the relationships between them - market and credit risk in particular - and evaluate how well the bond compensates an investor through its yield.
It is a process that mirrors the Islamic finance principle of prohibiting gharar (excessive uncertainty), which requires clarity in not only the value of the asset purchased but associated risks as well..............................................Full Article: Source
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