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Islamic Asset and Fund Management Quiz

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Questions and Answers

What types of interest-bearing products are prohibited in Islamic investing?

All forms of interest, whether fixed or floating (correct)

Simple interest amounts

Only excessive interest amounts

Floating and nominal interest

What features must financial returns bear in Islamic investing?

Fixed interest and profits

Profits and loss (correct)

Floating interest and profits

Compound interest and loss

What types of investment activities does Islam prohibit?

Speculation and contingency

Excessive risk, speculation, and uncertainty (correct)

Only excessive risk

Uncertainty and derivatives

What must fund managers ensure about clients' investments in Islamic investing?

They are free from all forms of interest-bearing products Signup and view all the answers

In Islamic investing, what must fund managers respect regarding their clients' wishes?

Investing only in Sharī'ah-compliant products Signup and view all the answers

According to Islamic finance, what is the meaning of risk?

Exposure to chance of imminent danger in commercial transactions Signup and view all the answers

What is the principle associated with profit in Islamic finance?

Al-ghunm bi al-ghurm Signup and view all the answers

What does the maxim 'Al-kharaj bi al-daman' in Islamic finance relate to?

The right to derive benefit from a property if one assumes the responsibility for its maintenance Signup and view all the answers

What is 'Sadd al-dhari’ah' in Islamic finance designed to achieve?

Blocking the legitimate means to an evil to reduce risks in transactions Signup and view all the answers

What do the maxims 'Al-ghunm bi al-ghurm' and 'Al-kharaj bi al-daman' suggest in Islamic finance?

Profit in commercial activities is associated with risk Signup and view all the answers

Study Notes

Wealth in Islam

Wealth is regarded as a means to achieve broader societal and family goals, rather than an end in itself.
Management of wealth should focus on the interests of both current and future generations.

Responsibilities of Fund Managers

Fund managers and Islamic asset management firms are expected to uphold high professional standards in their roles.
Discharge of responsibilities must align with ethical practices and Shari'ah principles.

Sharī'ah-Compliant Investing

Aligns with the principles of socially responsible investing, emphasizing ethical and moral values.
Investments must adhere strictly to Islamic ethical standards.

Prohibitions in Islamic Investing

Riba (interest) is strictly forbidden in Islamic finance.
Unethical investment areas to avoid include:
- Gambling
- Alcohol
- Pork products
- Uncensored media and leisure activities
- Pornography
- Other activities explicitly prohibited by Sharī'ah law

Requirements for Islamic Investments

Must completely exclude riba and interest-bearing financial products.
High levels of uncertainty and speculation are to be avoided in investment decisions.
Investments should promote social responsibility and serve the common good.
All contractual terms related to investments need to comply with Islamic legal frameworks.

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Description

Test your knowledge of Islamic asset and fund management with this quiz. Explore the fundamentals of Islamic investing and wealth management, including the principles of Sharī'ah-compliant investing and the responsibilities of fund managers.