What are Salam bonds characterized by in their purchasing agreement?

Salam bonds are specifically designed as a form of Islamic finance instrument where the purchasing agreement involves a transaction where a seller agrees to supply certain goods at a future date in exchange for full prepayment. This structure allows for immediate cash flow to the seller while ensuring that the buyer receives goods at a later date, thus adhering to Sharia law's prohibition against usury and uncertainty associated with conventional interest-bearing bonds.

The rationale behind this arrangement is to facilitate trade and liquidity while adhering to Islamic financial principles. The buyer's prepayment serves as an investment in productivity, typically in agricultural or industrial goods, which can help stimulate economic activity. This structure contrasts with other financial instruments that do not involve future goods delivery in this manner. Therefore, option A accurately captures the essence of what characterizes Salam bonds in their purchasing agreement.