Islamic Finance Applications: Musyarakah Contract and Sukuk Disputes
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Questions and Answers

What is the primary reason a bank may require a security pledge from its partner in a Musyarakah contract?

  • To demonstrate Islamic financial principles
  • To protect the bank from the risk of partner's negligence (correct)
  • To promote social responsibility in the community
  • To ensure a guaranteed return on investment

When disputes arise in sukuk prospectuses, what alternative to the judiciary is often preferred due to inadequate shariah knowledge among judges?

  • Mediation by a religious leader
  • Ruling by a Shariah Supervisory Board
  • Expert opinion in fiqh Muamalat (correct)
  • Arbitration by a local Islamic scholar

What is the primary principle underlying the Musyarakah contract in Islamic finance?

  • Prohibition of riba
  • Guaranteed returns on investment
  • Promoting social welfare
  • Mutual consent and shared risk (correct)

What is a key difference between Islamic finance and conventional finance?

<p>The prohibition of riba in Islamic finance (B)</p> Signup and view all the answers

What is the role of the Shariah Supervisory Board in Islamic finance?

<p>To ensure Shariah compliance of Islamic finance products (B)</p> Signup and view all the answers

What is the general principle regarding sales in Islamic law?

<p>Sales are lawful unless more specific evidence excludes it. (A)</p> Signup and view all the answers

What is the condition for trade to be valid according to the Quran?

<p>Mutual consent and the absence of riba. (D)</p> Signup and view all the answers

What is the ruling on a transaction that involves a lock-in period in Islamic finance?

<p>It is permissible as long as it is a financing product. (C)</p> Signup and view all the answers

What is the consequence of combining contracts in Islamic law?

<p>The combination is valid as long as each contract is permissible on its own. (A)</p> Signup and view all the answers

What is the basis for determining what is halal and haram in Islamic law?

<p>The Quran and the Hadith. (D)</p> Signup and view all the answers

What is the implication of Imam al-Shafi`i's validation of a contract?

<p>The contract is valid if it involves deferment and spot payment. (C)</p> Signup and view all the answers

Which of the following maxims is related to the concept of permissibility being the original rule for all things?

<p>Permissibility is the original rule for all things (D)</p> Signup and view all the answers

According to the Hanbali School, which maxim is an important guiding principle in Islamic finance?

<p>Certainty is not overcome by doubt (C)</p> Signup and view all the answers

What is the fundamental requirement in every contract in Islamic finance?

<p>Justice (B)</p> Signup and view all the answers

Which maxim emphasizes the importance of intention and meaning in Islamic contracts?

<p>In contracts, greater weight is given to intention and meaning than words and forms (A)</p> Signup and view all the answers

According to the Maliki view, which maxim is closest to the concept of certainty not being overcome by doubt?

<p>Certainty is not overcome by doubt (A)</p> Signup and view all the answers

What is the basis of judgement in Islamic finance, according to one of the maxims?

<p>Knowledge and understanding (D)</p> Signup and view all the answers

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