Abstract
Interest-free finance is a financing system based on the concept of risk. This study aims to analyze whether the relationship between interest-free finance and risk is reflected in investor perception. For this purpose, the impact of the Risk Tendency Index, Dollar, Euro, Gold and TL Reference Rate on BIST Participation Indices in the period 2021-2023 is analyzed. ARDL bounds test is applied to weekly data. Empirical results show that the USD and TL Reference Rate have a significant effect on BIST Participation Indices. However, the Risk Tendency Index does not have a significant effect on BIST Participation Indices. The observation that the index designed for participation finance is unaffected by investors' risk appetite is a significant insight into how investors perceive the participation finance system in Turkey.