Islamic Banking Principles Quiz
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Questions and Answers

What is the principle behind Musharikah in Islamic banking?

  • Cost plus financing
  • Sole leasing
  • Profit and loss sharing (correct)
  • Forward purchase
  • Which type of Islamic financial contract involves a lease cum purchase arrangement?

  • Mudarabah
  • Murabaha
  • Ijarah
  • Ijarah Wa’ Iktina (correct)
  • In Islamic banking, what does Mudarabah represent?

  • Forward purchase
  • Profit sharing principle (correct)
  • Cost plus financing
  • Agricultural lease
  • Which investment type in Islamic banking involves a diminishing partnership?

    <p>Diminishing Musharikah</p> Signup and view all the answers

    Which of the following activities is typically excluded from ethical investments in Islamic finance?

    <p>Production of alcohol</p> Signup and view all the answers

    What is the key feature of a Salam (Bai Salam) contract in Islamic finance?

    <p>Forward purchase</p> Signup and view all the answers

    Which type of Islamic banking contract involves variable returns and is equity-based?

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

    In Islamic banking, which contract type is based on a deferred sale and is known as 'Deferred buy option with forfeiture of earnest money option'?

    <p>Bai Muajjal</p> Signup and view all the answers

    Which Islamic financial contract involves profit and loss sharing and is based on business finance?

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

    What is the main principle behind Islamic credit cards as mentioned in the text?

    <p>Fee-based offerings without any charge of interest</p> Signup and view all the answers

    Which type of Islamic banking contract involves mark-up based fixed returns?

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

    'Riba' in Islamic finance refers to:

    <p>Excess or increase in capital without labor</p> Signup and view all the answers

    What does Gharar refer to in Islamic finance?

    <p>Uncertainty about the terms of a contract</p> Signup and view all the answers

    Which of the following is considered Maysir in Islamic finance?

    <p>Options trading</p> Signup and view all the answers

    What is Ghubn related to in Islamic finance?

    <p>Price fixing</p> Signup and view all the answers

    Which of the following is considered an ethical vice in Islamic banking?

    <p>Trading in weapons</p> Signup and view all the answers

    What type of returns are broadly permissible in Islamic banks according to the text?

    <p>Share in profit/loss arising from trade &amp; manufacture</p> Signup and view all the answers

    What is NOT considered Yethi (Internal Permissible Returns) in Islamic banking according to the text?

    <p>Permissible increase by way of application of nominal interest rates</p> Signup and view all the answers

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