18 Questions
What is the primary reason for Islam's prohibition of riba in Islamic finance?
To foster an environment based on fairness and justice.
How does the concept of Risk-and-Return Sharing differ from a traditional creditor-debtor relationship?
It encourages partnership and mutual responsibility.
Why do Islamic banks have an independent Shari'a supervisory board?
To ensure compliance with Islamic principles.
How does Islam view contractual obligations in the realm of finance?
As an obligation to reduce financial speculation (gharar).
Which element is NOT a force strengthening Islamic finance according to the text?
Encouragement of Financial Speculation
What is the purpose of Shari'a-Approved Activities in Islamic banking according to the text?
To engage only in activities permitted by Islam.
What is the key role of the Shari'a supervisory board in Islamic financial institutions?
To ensure compliance with Shari'a principles and monitor transactions
Which of the following is NOT a key principle of Islamic finance?
Maximizing shareholder wealth
Which of the following is a key factor that has strengthened the growth of Islamic finance in recent years?
Globalization and cross-border transactions
What is the role of the sanctity of contract in Islamic finance?
To ensure that all contracts are legally binding
How does the principle of Gharar (excessive uncertainty) apply in Islamic finance?
It prohibits the use of derivatives and other complex financial instruments
Which of the following is a key objective of Shari'a in Islamic finance?
To promote economic growth and development
Which of the following is NOT a condition necessary for a valid contract according to Shari'a law?
Detailed description of the asset and its transaction price
What is the primary purpose of the Islamic Financial Services Board and the Accounting and Auditing Organization for Islamic Financial Institutions?
All of the above
What is the Shari'a principle of 'Avoidance of Gharar'?
The prohibition of financial transactions involving excessive uncertainty or risk
Which of the following is NOT a necessary condition for a valid contract according to Shari'a law?
Presence of a Shari'a supervisory board
Which of the following is a key force that has strengthened the Islamic finance industry?
Standardization of practices and accounting policies by transnational bodies
What is the primary purpose of the Shari'a principle of 'Avoidance of Gharar'?
To prohibit financial transactions involving excessive uncertainty or risk
Test your knowledge on the conditions necessary for a contract to be valid in Islamic contract law, including the avoidance of Gharar and adherence to religious and moral principles. Explore the key elements that make a contract enforceable within an Islamic framework.
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