Islamic Banking Principles and Risk Sharing
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Questions and Answers

What is the concept that differentiates Islamic banks from conventional banks?

  • Sharing of risks and rewards (correct)
  • Postponement of consumption
  • Fixed interest payments
  • Hoarding of money

    • What is prohibited in Islamic financial transactions?

  • Equity participation
  • Gharar (uncertainties) and maysir (gambling) (correct)
  • Fixed interest payments
  • Risk sharing

    • What is money considered as in Islamic banking principles?

  • A reward for postponing consumption
  • A commodity with inherent value
  • Potential capital (correct)
  • A means of speculation

    • What is the primary objective of Islamic banking?

    <p>To stimulate the economy</p> Signup and view all the answers

    What is the Islamic perspective on the time value of money?

    <p>It is recognized only when money acts as capital</p> Signup and view all the answers

    What is the belief underlying Islamic financing?

    <p>Financier and borrower should equally share the risk</p> Signup and view all the answers

    What is the primary objective of establishing Islamic banks?

    <p>To spread economic prosperity within the framework of Islam</p> Signup and view all the answers

    What is the only type of loan allowed in Islam?

    <p>Qardhul Hassan (Benevolent loan)</p> Signup and view all the answers

    What is the primary objective of Islamic banks, despite their differences from conventional banks?

    <p>To make a profit</p> Signup and view all the answers

    In Islamic banking, what is the role of suppliers of funds?

    <p>They become investors</p> Signup and view all the answers

    What is the central principle of Islamic economics that emphasizes mutual responsibility and social balance?

    <p>Socio-economic Justice and Equitable Distribution</p> Signup and view all the answers

    What is the Islamic principle that prohibits gaining ownership through fraud, deceit, theft, or other falsehoods?

    <p>Trusteeship</p> Signup and view all the answers

    Which of the following is NOT a principle of Islamic economics?

    <p>Interest-based lending</p> Signup and view all the answers

    What is the Islamic principle that requires partial acceptance of liability for risk in financial ventures?

    <p>The Duality of Risk</p> Signup and view all the answers

    What is the approach of Islamic banking towards economic development?

    <p>Optimistic approach</p> Signup and view all the answers

    What is the significance of Riba prohibition in Islamic banking?

    <p>It prohibits any advantage or benefit to the lender</p> Signup and view all the answers

    What is the underlying principle of Islamic banking in terms of resource allocation?

    <p>Optimum resource allocation</p> Signup and view all the answers

    What is the Islamic financing model that involves a levy of 2.5% of personal wealth?

    <p>Zakat</p> Signup and view all the answers

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