Islamic Finance

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Questions and Answers

Which type of partnership allows partners to benefit from the appreciation in the value of assets, even if profit has not been made through sales?

  • Musharakah (correct)
  • Limited partnership
  • Mudarabah
  • Joint venture

In musharakah, how are the assets of the partnership owned?

  • Owned by the mudarib
  • Owned based on the proportion of profit earned
  • Solely owned by the rabb-ul-mal
  • Jointly owned by all partners (correct)

In mudarabah, who solely owns the goods purchased?

  • Partners jointly
  • Based on the proportion of profit earned
  • Mudarib
  • Rabb-ul-mal (correct)

How can the mudarib earn their share of profit in mudarabah?

<p>By selling the goods profitably (C)</p> Signup and view all the answers

Can the mudarib claim their share in the assets themselves in mudarabah?

<p>No (B)</p> Signup and view all the answers

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Study Notes

Partnership Types

  • A partnership that allows partners to benefit from the appreciation in the value of assets, even if profit has not been made through sales, is a type of musharakah partnership.

Ownership in Musharakah

  • In musharakah, assets of the partnership are owned jointly by all partners.

Ownership in Mudarabah

  • In mudarabah, the owner of the capital (rabb-ul-mal) solely owns the goods purchased.

Earning Profit in Mudarabah

  • The mudarib (manager) earns their share of profit in mudarabah by managing the goods or business and generating profit.

Mudarib's Share in Mudarabah

  • The mudarib cannot claim their share in the assets themselves in mudarabah; they only earn a share of the profit generated.

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