Developing Sharī͑ah-Compliant Asset Pricing Model in the Framework of Maqāsid al-Sharī͑ah and Islamic Wealth Management

• Published in: Intellectual Discourse
• Main Author: Febrianto I.; Mohamed N.; Bujang I.
• Format: Article
• Language: English
• Published: International Islamic University Malaysia 2024
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85198230546&doi=10.31436%2fid.v32i1.1910&partnerID=40&md5=d60909566582a42d0086e6918ec7e00c

This article offers a conceptual framework for developing the Sharī͑ah-Compliant Asset Pricing Model (SCAPM) using the Maqāsid al-Sharī͑ah and Islamic Wealth Management (IWM). This article also provides a new perspective on finding Islamic financial benchmarks as an alternative to conventional financial benchmarks in the Islamic finance industry. This research was conducted using a qualitative research method with deep reference to published journal articles and books in the fields of Maqāsid al-Sharī͑ah, Islamic Wealth Management, and asset pricing model. As a measure of the expected minimum rate of return in an asset pricing model, this article proposes the fulfilment of basic necessities (darūriyyāt) and zakāt rate as proxy for investors’ required rate of return. This study acknowledges both systematic and non-systematic risk’s effects on asset pricing. © IIUM Press.