Black Box


Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Idioms, Encyclopedia, Wikipedia.

Black Box

1. Any complex investment strategy or model. In general, a black box involves a computer using complicated formulas to achieve returns in the desired way. Because an investor may not understand the model (and may not be able to do so), a black box can lead to unforeseen problems. See also: Black box syndrome.

2. In Islamic finance, a strategy that allows one to invest funds in a Sharia-compliant way but still link the returns to non-compliant investments. Using a black box is very controversial and some Islamic finance scholars reject it as un-Islamic.
References in periodicals archive ?
The company also offers a monthly naughty black box subscription service for $29.
Once the black box is designed, the main task of the insurance company is to allow easy access to the consumer.