In a Bayesian setting, investments can be risky either because they are opaque, i.e., their payoff-relevant signals are noisy, or because they are fundamentally risky, i.e., the variance of the prior is high. When interest rates are low (high), investors favor opaque (transparent) projects that...

Under Zero Interest Financial System, Profit Loss Sharing (PLS) contract supposedly is the primary vehicle of incurring debt by a business. However, factually, for various reasons that is not the case as of now. An alternative mode of financing called Mark-up (MU) has stepped in as the favored...