DERIVATIVES: AN ISLAMIC PERSPECTIVE

Nevi Danila, STIE Malangkucecwara School of Economics, Malang, Indonesia

Agatha E. Jeffers, Montclair State University, New Jersey, USA


ABSTRACT

In conducting business, the presence of risk cannot be avoided. By employing
derivatives, companies and individuals can transfer for a price any undesired risk to other
parties who have risks that offset or who want to assume that risk (Chance, 2004). The
growth of derivatives has accelerated rapidly in the last thirty years. However, there is a
severe shortage of research that examines the Islamic (Shariah) principles to address
derivatives and the use of derivatives in the Islamic environment. The objective of this
paper is to examine whether derivative products are allowed or prohibited by Islamic
principles. Despite the fact that various researchers accept the use of derivatives under
certain circumstances, the conservative point of view suggests that conventional
derivatives are not in harmony with Shariah rules. In this paper, we contend that the
reasons for the arguments for the use of derivatives have some flaws and are not
completely in compliance with Shariah rules. On this ground, we conclude that the use of
conventional derivative instruments is not acceptable in the Islamic environment.
However, we point out that Shariah has some risk management strategies that may be
compatible with Shariah principles and at the same time can achieve the same objectives
as conventional derivatives. Thus, the market participants who are concerned with
Shariah principles will be able to identify and use similar instruments without violating the
Islamic principles.

Keywords: Derivatives; forwards; futures; options; contracts; Shariah rules; risk management; financial
ethics.

1. INTRODUCTION

In doing business, the presence of risk cannot be avoided. There are two types of risks: business risk and
financial risk. Business risk deals with the uncertainty of future sales or the cost of inputs, while financial
risk deals with the uncertainty of interest rates, exchange rates, stock prices, and commodity prices. The
means of dealing with financial risks are called derivatives. Derivatives are financial instruments whose
returns are derived from those of other financial instruments. By employing derivatives, companies and
individuals can transfer, for a price any undesired risk to other parties who have risks that offset or who
want to assume that risk (Chance, 2004).

The growth of derivatives has accelerated rapidly in the last thirty years. However, there is a severe
shortage of research that examines the Islamic (Shariah) principles to address derivatives and the use of
derivatives in the Islamic environment. The objective of this paper is to examine whether the products of
derivatives are allowed or prohibited by Islamic principles. Despite the fact that various researchers
accept the use of derivatives under certain circumstances, the conservative point of view suggests that
conventional derivatives are not in harmony with Shariah rules. In this paper, we argue that the reasons
for the arguments for the use of derivatives have some flaws and are not completely accepted by Shariah
rules. On this ground, we conclude that the use of conventional derivatives is not acceptable for use
under Islamic law. However, we point out that Shariah has some risk management strategies that are
compatible with conventional derivatives, thus the market participants who are concerned with Shariah
principles will be able to identify and use similar derivative instruments without violating the Islamic rules.

The balance of the paper is organized as follows: First, we present an overview of the norms of Islamic
financial ethics. Secondly, we present a review of the general concepts of derivatives. Thirdly, we analyze
and discuss the use of derivatives according to the Shariah principles. Finally, we conclude with the
possible applications and use of derivative alternatives in the Islamic culture.
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2. NORMS OF ISLAMIC FINANCIAL ETHICS

Researchers have studied norms of financial ethics which are applicable to financial markets from the
holy Quran and the Sunnah. (Obaidullah, 2002) note that these norms are as follows:
Freedom of contract - this is the freedom to enter into transactions. It means that neither buyer
nor seller has an enforcement to enter the transaction.
Freedom from al riba - Riba applies to time and it implies that there is no reward for time
preference under condition of zero risk (Al Suwailem, 2006).
Freedom of al gharar - Gharar applies to risk and states that contracts are invalid if they contain
excessive uncertainty (Al Suwailem, 2006).
Freedom from al-qimar (gambling) and al-maysir (unearned income) - contracts are invalid if they
incorporate gambling (an excessive uncertainty). Moreover, contracts that involve games of
chance or unearned income are prohibited.
Freedom from price control and manipulation - means that price is purely determined by supply
and demand, i.e. the regulators are not allowed to interfere with the market. However, it is
suggested that the market interference is allowed if there are market anomalies caused that
impair the conditions of the free market. Nevertheless, manipulation which has the intention of
influencing prices through the creation of artificial supply/demand is unethical.
Entitlement to transact at fair prices - if there is a difference between the price where a
transaction takes place and the fair price which is based on a valuation expert, it is called gubn.
This is considered to be unethical.
Entitlement to equal, adequate and accurate information - Islamic ethics requires that all
information relevant to expected cash flows and asset valuations should be equally accessible to
all investors in the market.
Freedom from darar (detriment) - this refers to the possibility of a third party being adversely
affected by a contract between two parties.

In the following paragraphs, we discuss the general concept of derivatives. This is followed by an analysis
of the Islamic perspective of derivatives with reference to the ethical considerations discussed above.

3. GENERAL CONCEPTS OF DERIVATIVES

As mentioned above, there are basically two types of risks. These are 1) risk associated with normal
economic transactions, i.e. value-adding and wealth-creating activities and 2) risk associated with
creating wealth for nothing or zero sum activities, where no net additional wealth is created (Al Suwailem,
2006). The latter activity is essentially viewed as gambling activities and is prohibited by Islam. Risk
management is the practice of identifying the risk level a firm desires, identifying the risk level it currently
has, and using derivatives or other financial instruments to adjust the actual risk level to the desired risk
level (Chance, 2004). This concept of risk management is in line with the Shariah maxim that is the
maintenance and protection of wealth. This is compulsory since not protecting wealth from these risks
can be considered squandering of wealth, which is prohibited in the Quran. Moreover, as risks are
undesirable and unpleasant events, they can be considered as a damage which has to be avoided or
eliminated. If risks cannot be eliminated, they must be reduced through risk management. Thus, Shariah
obliges businesses to take measures to hedge undesirable risks (Al-Saati, 2002). The issue is how to
reach this goal, and what means should be employed to attain this end. The means are not supposed to
be prohibited by Shariah or norms of financial ethics (Al Suwailem, 2006).

Essentially, there are three basic types of derivatives: forwards, futures, and options. These are referred
to as plain vanilla derivatives, while others forms in the derivative world are called exotic derivatives
(Stulz, 2004). In this paper, we address the plain vanilla derivatives only.

Basically, the concept of forwards and futures contracts are the same: These are contracts which obligate
one party to buy the underlying at a fixed price at a certain time in the future from a counter party who is
obligated to sell the underlying at that fixed price. However, they have some differences with regard to
JOURNAL OF INTERNATIONAL FINANCE AND ECONOMICS, Volume 9, Number 3, 2009 84
their trading mechanism. The details of mechanisms are described below:

3.1 Forwards/Futures Contracts
As mentioned above, a forward/futures contract is a contract that obligates one party to buy the
underlying asset at a fixed price at a certain time in the future.

3.1.1 EXAMPLE # 1 Forward/Futures Contracts
Suppose an Indonesian importer expects to pay $100 million 3-months in the future. He can then enter
into a forward contract to buy US dollars in 3-months. Let's say that currently one US dollar (US$1) is
equal to Rupiah (Rp.) 9,220, and 90 days forward $1 is Rp. 9,500, then in 3-months the Indonesian
importer has to buy US$1 at Rp. 9,500 no matter what happens at that time. In other words, in case the
rupiah depreciates at Rp. 10,000/$, the exporter gets an advantage for buying the dollar at Rp. 9,500, and
vice versa. The forward contract participants are arbitrageurs, traders, hedgers, and speculators. In the
futures market, however, participants may get out of the market before the contract has expired. Since
about 97% of futures participants are speculators, this implies that 97% of the participants get out of the
market before the maturity date. They are allowed to do this because of a trading mechanism referred to
as mark-to-market procedure.

3.2 Mark-to-Market Procedure
The market value of an instrument changes constantly in response to market conditions. Furthermore,
despite the maturity date indicated in the contracts, market participants are able to get out of the market
at any time that he wishes.

3.2.1 Example # 2 - Buyer (Long position):
Bob buys 500 contracts at a futures price of $100. The initial margin is $3,500 (investors equity account
is $7/contract) and the maintenance margin is $2,000 ($4/contract).
At the end of day 1: the settlement price is $99. It means Bob realizes a loss of $1/contract
because he buys a contract at $100, but the settlement price is $99. The total loss is $500 ($1 x
500 contracts). Bobs account is reduced to $3,000 ($3,500 - $500). Bobs new contract price is
now $99.
At the end of day 2: the settlement price is $97. It means Bob realizes a loss of $2/contract
because his contract price is $99, but the settlement price is $97. The total loss is $500 ($2 x 500
contracts). Bobs account is reduced to $2,000 ($3000 - $1,000). No action is taken by the
clearing house since the account is not less than the maintenance margin. Bobs new contract
price is now $97.
At the end of day 3: the settlement price is $98. It means Bob realizes a profit of $1/contract
because his contract price is $97, but the settlement price is $98. The total profit is $500 ($1 x
500 contracts). Bobs account is increased to $2,500 ($2,000 + $500). Bobs new contract price
is $98.
At the end of day 4: the settlement price is $95. It means Bob realizes a loss of $3/contract,
because his contract price is $98, but the settlement price is $95. The total loss is $1,500 ($3 x
500 contracts). Bobs account is reduced to $1,000. The initial margin is less than the
maintenance margin. Thus, the clearing house calls Bob to top up his initial margin. If Bob cannot
fulfill the requirement, then the clearing house liquidates Bobs contract by taking the opposite
position. Bobs new contract price is $95.
If Bob feels that he should get out of the market before the settlement date, he can do it by
submitting the opposite contract (selling contract) with the same amount of contracts.

3.2.2 Example # 3 - Seller (Short position):
Sally sells 500 contracts at a futures price of $100. The initial margin is $3,500 (investors equity account)
and the maintenance margin is $2,000.
At the end of day 1: the settlement price is $99. It means Sally realizes a profit of $1/contract
because she sells a contract at $100, but the settlement price is $99. The total profit is $500 ($1 x
500 contracts). Sallys account is increased to $4,000 ($3,500 + $500). Sallys new contract price
is $99.
At the end of day 2: the settlement price is $97. It means Sally realizes a profit of $2/contract
JOURNAL OF INTERNATIONAL FINANCE AND ECONOMICS, Volume 9, Number 3, 2009 85
because her contract price is $99, but the settlement price is $97. The total profit is $1,000 ($2 x
500 contracts). Sallys account is increased to $5,000 ($4000 + $1,000). Sallys new contract
price is $97.
At the end of day 3: the settlement price is $98. It means Sally realizes a loss of $1/contract
because her contract price is $97, but the settlement price is $98. The total loss is $500 ($1 x 500
contracts). Sallys account is reduced to $4,500 ($5,000 - $500). Sallys new contract price is
$98.
At the end of day 4: the settlement price is $95. It means Sally realizes a profit of $3/contract,
because her contract price is $98, but the settlement price is $95. The total profit is $1,500 ($3 x
500 contracts). Sallys account is increased to $6,000. Sallys new contract price is $95.
If Sally feels that she should get out of the market earlier before the settlement date (because she
got a profit already), she can do so by submitting the opposite contract (500 buying contracts)
with the same amount of contracts.

It is very clear from the directly preceding two examples that participants are able to get out of the market
anytime that they want before the maturity date. Thus, they enter the market without any intention of
taking possession of the products but simply to settle price differences (money for money to get a profit).
In other words, excessive speculative behavior was their only motivation to enter the market.

3.3 Options Contract
An option is a contract in which the option writer grants the option buyer the right, but not the obligation to
purchase from (call option) or sell to (put option) the writer at a specified price within a specified period of
time. The option writer, also referred to as the option seller, grants this right to the buyer in the exchange
for a certain sum of money, which is called the option price or option premium. The price at which the
underlying may be bought or sold is called the exercise price or strike price. The date after which an
option is void is called the expiration date. An option that may be exercised at any time up to and
including the expiration date is referred to as an American option. On the contrary, the option that can be
exercised at the expiration date is called a European option.

Buying calls or selling puts allows the investor to gain if the price of the underlying stock rises. Buying
calls gives the investor unlimited upside potential, but limits the loss to the option price. Selling puts limits
the profit to the option price, but provides no protection if the stock price falls, with the maximum loss
occurring if the stock price falls to zero.

In contrast, buying puts and selling calls allows the investor to gain if the price of the underlying stock
falls. Buying puts gives the investor upside potential, with the maximum profit realized if the stock price
declines to zero. However, the loss is limited to the option price. Selling calls limits the profit to the option
price, but provides no protection if the stock price rises, with the maximum loss being theoretically
unlimited.

4. DERIVATIVES THE ISLAMIC (SHARIAH) PERSPECTIVE

In Islamic rules, there are arguments which reject and accept forwards and futures. The rejections and
acceptances are as follows:

4.1 Arguments Against the use of Forwards and Futures Contracts:
1. A forward/futures contract is a future (mudhaf) sale. This mudhaf sale is prohibited since it has
gharar (uncertainty) in it. Gharar is present with regards to time and the condition of the sold
object. The uncertainty over time means that when the parties conclude the contract, they do not
know whether they will still be in agreement and have continued interest in that contract when it
becomes due. For example, as the market changes, the market price on the maturity date may
be higher than the agreed price. This may provoke the seller to default on the obligation. On the
contrary, if the market price is lower than the agreed price, then the buyer might default on the
agreement. Moreover, Mufti Taqy Usmani (1996), states that firstly, it is a well recognized
principle of the Shariah that purchase or sale cannot be effected for a future date; secondly,
because in most futures transactions the delivery of commodities or their possession is not
JOURNAL OF INTERNATIONAL FINANCE AND ECONOMICS, Volume 9, Number 3, 2009 86
intended. Therefore, all forward and futures contracts are invalid in Shariah. In most cases the
transactions end up with the settlement of the difference in price only, which is not allowed in
Shariah. Obaidullah (2002) and Al-Saati (2002) also suggest that futures contracts have
elements of gharar since one sells products which they do not have on their grounds or is a non-
existent sale. An acceptable transaction therefore must incorporate a real component, e.g.
goods, utilities or services. In other words, money for money instruments is unacceptable if
performed for profit (Al Suwailem, 2006). One implication of non-intended products delivery is
that most of the participants are speculators (Bacha, 1999; Salehabadi and Aram, 2002). As
discussed earlier, excessive speculation is prohibited in Islam.
2. Due to mudhaf sale, forward/futures essentially equates to an exchange of one debt for another
debt or bai-al-dayn or bai-al-kali-bi-al-kali, which is forbidden in Islam (Obaidullah, 2002; Al-Saati,
2002). The justification for prohibition of sale by debt for debt is that it does not fulfill the proposed
sale contract, i.e. by having possession of the products. So, it is a useless obligation for both
parties (Al-Saati, 2002).
3. According to Bacha (1999), trading volume of futures indicates an extensive amount of
speculative behavior. He stated that the total trading volume is often much larger than the
underlying volume. This huge divergence between underlying assets and trading volume has to
do with risk dissipation. The extensive amount of speculative behavior is no doubt prohibited by
Shariah rules because it is similar to gambling.
4. Reverse trading in futures markets is contrary to the Shariah ruling that the purchaser may not
sell the goods purchased until they are in his possession (Al-Saati, 2002).
5. Short selling in the futures trading is contrary to the Shariah ruling since the item must exist and
be owned by the seller at the time of the contract (Al-Saati, 2002).
6. Forward contracts are further prohibited in foreign exchange since money is not considered as a
commodity but as a tool for trading, thus exchanging local money for foreign money is only
permissible on the spot.

4.2 Arguments for Acceptance of Forwards & Futures Contracts
1. Ibn Taymiya and Ibn Al-Qayyim permit the mudhaf sale (Al Dhareer, 1997).
2. Fahim Khan (1996) suggests that there are clear sayings of the Prophet (PBUH) that he who
makes a salaf (forward sale) should do that for a specific quantity, specific weight, and for a
specific period of time. Moreover, he states that the reason for accepting salaf is that the product
is a public necessity and a payment is settled at the beginning of the contract. However, in the
forward and futures markets, the payment is settled at the end of the contract. Thus, we argue
that forward and futures violate the Shariah rules.
3. On grounds of public necessity, scholars have permitted bai salam sale, that is, the sale of what
one does not have, but can be brought into existence, such as generic products. Notwithstanding
this, it has one condition, that is, one end of the contract must be settled on the spot, i.e. buyer
has to pay the price at the time of contracting, and the seller has an obligation to deliver the
product at a future date. Moreover, the flexibility is offered by Imam Hanafi for manufactured
products. This is called bai istina. Essentially, Imam Hanafi gives some flexibility in terms of the
settlement from both ends. Therefore, settlement can be deferred to a future date. The reason for
this flexibility is that there will be no space for speculation in price differences, since the products
cannot be easily found in the market place (Obaidullah, 2002; Al-Saati, 2002). Again, we argue
that forward and futures are not similar to bai salam and bai istina. Thus, forward and futures
contracts are not acceptable in the Islamic culture.
4. Imam Maliki also permits postponement of the counter value for three days and for more than
three days in some cases (Al Hattab, n.d., 4/516 quoted in Al-Saati, 2002). Moreover, the
postponement of two counter- values is a sales contract. This is permitted as long as the intention
is to deliver and take delivery of the asset and is not speculation (Salami, 2000 quoted in Al-Saati,
2002). Thus, the emphasis is not on ownership or possession, but rather on the seller's effective
control and ability to deliver (Ibn Taymiyyah, 1398, 20/529 and Al-Baji, 1332 H., 1/399 quoted in Al
Saati, 2002). In this case, a short sale is permitted as long as the objects are not fungible goods,
which can be replaced and substituted.
5. Ibn Taymiyyah suggests that agreed upon requirements between parties are binding to them
based on the principle of the freedom of contractual requirement, thus in a forward contract, the
JOURNAL OF INTERNATIONAL FINANCE AND ECONOMICS, Volume 9, Number 3, 2009 87
parties can make requirements of the postponement for both the asset and its counter value (Al-
Saati, 2002).
6. In the compromise framework, the definition of futures contract is that two parties compromise on
a future transaction, where the seller agrees to deliver the commodity in a future date to the buyer
and the buyer agrees to pay money to the seller at that time. Moreover, in the jo-aleh framework,
the futures contract is defined as a contract in which the buyer announces that if the seller
delivers the commodity at a predetermined time in the future, he/she will deliver the money to
him/her. The futures contracts in the two frameworks above are permissible (Salehabadi and
Aram, 2002).
7. Even though the forward contract is a mudhaf (future) sale, the buyer becomes owner of the
goods and the seller becomes owner of the price, so it has the goal of protecting and maintaining
the assets of the counter parties, which satisfies the Shariah maxim of preserving wealth (Al-Satii,
2002).
8. Al Masri (1999, quoted in Al Saati, 2002) argues that if the goods and their counter value are
delivered on a specific date in the future, there will be no risk.

4.3 Options Contracts
An examination of the definition of option shows that it is similar to a down-payment (arbun) sale, that is a
person buys an item and pays a certain amount of money to the seller on the understanding that if he did
take the item the amount will be part of the total price but if he did not he would forfeit his money and the
seller would keep it (Al-Dhareer, 1997). There are two hadiths with regard to arbun sale: one forbids it
and the other makes it permissible.

4.3.1 Objections to Options
Many researchers accept the validity of hadith that prohibits arbun sale, thus they object to this kind of
sale. The reasons for their objections are as follows:
1. The arbun sale involves gharar because neither buyer nor seller is certain that the sale will take
place.
2. Iqtisad al islami. This is the belief that in principle, futures and options contracts may be
compatible with Shariah principles. The objections to these instruments relate to the manner in
which they have found application in the marketplace in certain instances, such as in the case of
speculation and exploitation of certain counter parties.
3. Ahmad M. Hasan (cited in Bacha, 1999) suggests that options are prohibited since their maturity
dates are beyond three days. Thus, they are similar to khiyar-al shart (option of stipulation).
Moreover, in these contracts, the buyer has many more benefits than the seller, in the sense that
the seller has potentially unlimited risk and limited benefit. Further, the buyer has potentially
unlimited benefits and limited risk. This is considered to be oppressive and unjust.
4. An option contract is a zero sum game. It is therefore unacceptable under Shariah rules.
5. An option contract involves gharar and the intended transaction is primarily based on speculative
behavior. Gharar and excess speculation are induced due to no physical delivery or cash
settlement (Bacha, 1999).
6. Islamic Fiqh Academy, Jeddah (cited in Obaidullah, 2002) suggests that an option contract as
currently applied in the financial markets are new types of contracts which do not come under any
one of the Shariah nominate contracts. Since the subject of these contracts is neither a sum of
money nor a utility nor a financial right which may be waived, the contract is not permissible in
Shariah. As a matter of fact, the object of option trading is a right which is neither a tangible
commodity nor usufruct, thus it is not proper for a contract (Abu Sulayman in Obaidullah, 2002).
Salehabadi and Aram (2002) compare an option with bai-al urbun, that is, a transaction through
which a person who wants to purchase a commodity in the future who will pay a percentage of
the cost at the present time and at a determined date if he purchases the commodity. He will
then pay the remaining cost at the time of settlement. However, the difference between an option
and bai-al urbun is that an option premium is not a part of the selling price while bai-al urbun is a
part of the selling price. Moreover, all the schools of fiqih except the Hanbali school prohibits bai-
al urbun (Obaidullah, 2002). The seller will take an urbun as compensation for terminating the
sales agreement. It is prohibited by Rasulullah (Ibnu Majah Hadith). Imam Hanbali suggests that
urbun sale is acceptable as Nafi bin Harits performed it when he bought a house for Umar bin
JOURNAL OF INTERNATIONAL FINANCE AND ECONOMICS, Volume 9, Number 3, 2009 88
Khattab (Sabiq, 1995).
7. In contrast, according to Salehabadi and Aram (2002), Imam Ali, the first imam of the Shia sect of
Islam and son-in-law of Prophet Mohammad permits this form of transaction and therefore it
seems that call options are permitted.

4.3.2 Arguments for Acceptance of Options:
1. Looking at the components of a basic option contract, such as premiums, time to maturity and
delivery indicates that there is nothing inherently objectionable in granting an option, exercising it
over a period of time or charging a fee for it. In addition, options trading, like other varieties of
trade is permissible (mubah) and as such it is simply an extension of the basic liberty that the
Quran has granted (Kamali, 1995 cited in Bacha, 1999). A basic liberty here does not mean that
we are free to conduct trades. However, one who conducts trades has to be concerned with
specific rules that are stated in the Quran, such as, one cannot cheat, cannot manipulate, cannot
speculate, etc (Al, Raysuni, 1993).
2. Some scholars permit option contracts and view it as a benefit (manfaa) within the context of
wealth (maal). Hence the option is permitted since it gives the purchaser a benefit. However, we
do not agree with it since the one who gets the benefit is only the purchaser. How about the
seller? He gets very little benefit. This implies that the buyer is more important than the seller.
Malaysia SEC permits warrants since it has the characteristic of an asset which satisfies the
concepts of haqq mali and haqq tawalluq which is transferable based on the majority of fuqahas
views. Thus, this right can be classified as an asset and it can be traded. Ayatollah Seestani also
suggests that one can transfer his rights to any one, either by getting money for it, or for free
(Obaidullah, 2002).

5. ALTERNATIVES TO ADDRESS RISK

An examination of the above arguments for the acceptance of derivatives in the Islamic society clearly
suggests the existence of flaws that are not in compliance with Shariah rules. Thus, it is wise not to use
derivative instruments but to be more conservative. In other words, it is better to reject the use of
conventional derivatives when conducting business in the Islamic environment.

However, to address the risks associated with conducting business, Shariah rules offers several risk
management strategies which are compatible with Islamic rules and can simultaneously achieve the
same goals as those provided by conventional derivative instruments. Some of these are deferred sales
partnerships, diminishing partnerships, third party hedges, repurchase agreements, diversified deferred
price sales, and various other alternatives that can effectively be utilized to achieve the same objectives
as using derivatives.

6. CONCLUSION

Conventional derivative instruments are not suitable under the Islamic system. Even though some
researchers have approved the use of derivatives under certain circumstances, their arguments have
flaws that violate Shariah rules and are therefore forbidden in the Islamic environment. Nevertheless,
Shariah provides risk management solutions and strategies that are compatible with conventional
derivatives. The difference is that the solutions are ethical and are in compliance with the Shariah rules
and thus acceptable in the Islamic environment.

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AUTHOR PROFILES:

Dr. Nevi Danila received her PhD from Sydney University, Australia in 2001. She holds an MBA from
Saint Louis University, USA. She is currently President/Associate Professor of Economics at STIE
Malangkucecwara School of Economics in Malang, Jawa Timur, Indonesia.

Dr. Agatha E. Jeffers, CPA received her PhD from Rutgers University, New Jersey in 2000. She also
holds an MBA from Columbia University, New York. She is currently Associate Professor of Accounting in
the Department of Accounting, Law & Taxation at Montclair State University in Montclair, New Jersey,
USA.

JOURNAL OF INTERNATIONAL FINANCE AND ECONOMICS, Volume 9, Number 3, 2009 90
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