Pertanika J. Soc. Sci. & Hum. 24 (S): 101 – 110 (2016) ISSN: 0128-7702 © Universiti Putra Malaysia Press SOCIAL SCIENCES & HUMANITIES Journal homepage: http://www.pertanika.upm.edu.my/ ARTICLE INFO Article history: Received: 24 February 2016 Accepted: 30 September 2016 E-mail addresses: aslina2316@johor.uitm.edu.my/ aslina2316@gmail.com (Omar, A.), maheran@tmsk.uitm.edu.my (Jaffar M. M.) * Corresponding author The Continuous Model of Stochastic Mudharabah Investment Omar, A. 1 and Jaffar M. M. 2 * 1 Faculty of Computer & Mathematical Sciences, Universiti Teknologi MARA, Cawangan Johor, 85009 Kampus Pasir Gudang, Malaysia 2 Faculty of Computer & Mathematical Sciences, Universiti Teknologi MARA (Shah Alam), 40450 Shah Alam, Selangor, Malaysia ABSTRACT In Islam, all decisions, activities, policies, strategies and interactions in the economy are related to human relationships. In the Islamic inancial system, the syariah rules are considered in all economic activities including investment. Investment is money or capital commitment for the purchase of inancial instruments or other assets to gain beneits in the form of interest. Most investment opportunities are interest based but Islamic law strictly prohibits interest or usury, also called riba in Arabic. The prohibition of riba has led to the creation of alternatives schemes for the compensation of investment capital. One of the methods of compensation is by means of proit-sharing and one of the inancial contracts that internalise proit sharing is mudharabah. It is an investment partnership in which one party called rab ul mal provides capital while the other party called mudharib brings labour and effort with the provision of proit sharing in some pre-determined proportions. This paper uses the model of stochastic mudharabah investment which can be used in forecasting the proits gain by both two parties in a stock market investment. Keywords: Investment, mudharabah, stochastic INTRODUCTION Islam is a complete code of life that is constructed upon the instructions given by Allah SWT and practices of the holy Prophet Muhammad SAW. In Islam, all decisions, activities, policies, strategies and interactions in the economy directly relates to the Hereafter because Islam makes no distinction between the spiritual