Islamic Finance Principles Quiz

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What is the term used to describe uncertainty about the terms of a contract in Islamic finance?

Maysir

Ghubn

Gharar (correct)

Yethi

Which of the following is considered an internal permissible return in Islamic banks?

Profit from joint ventures (correct)

Non-disclosure of fees for services

Forcing market determined pricing

Charging excessive interest rates

In Islamic finance, what does Maysir refer to?

Price fixing

Gambling (correct)

Trading in unethical goods

Uncertainty in contracts

What activity is prohibited in Islamic finance due to the risk of disproportionate harm or loss?

Options trading Signup and view all the answers

Which of the following is a permissible increase in charge in Islamic banks according to normal market forces?

Charge for services Signup and view all the answers

What is the permissible Debt to Total Capital ratio according to the text?

Less than 33% Signup and view all the answers

What are ethical vices that are prohibited in Islamic finance?

Trading in weapons and alcohol Signup and view all the answers

Which type of account is associated with sole leasing in Islamic banking?

Current Accounts Signup and view all the answers

What principle is applied in Musharikah in Islamic banking?

Profit and loss sharing Signup and view all the answers

In which type of account can you find Mudarabah in Islamic banking?

Investment deposits Signup and view all the answers

What is the acceptable level of Revenue from impure income as a percentage of total income in Islamic banking?

< 5% Signup and view all the answers

Which type of account is linked to Profit sharing principle in Islamic banking?

Mudarabah Signup and view all the answers

What is the Shari’ah alternative to the concept of insurance?

Al-Takaful Signup and view all the answers

Which type of Islamic financial contract involves business finance with profit and loss sharing?

Mudarabah financing Signup and view all the answers

What is the main characteristic of Islamic credit cards?

Fee-based offerings Signup and view all the answers

Which type of contract in Islamic banking involves a deferred sale?

Murabaha Signup and view all the answers

What fundamental prohibition does Islamic finance strictly adhere to?

Riba (Usury/Interest) Signup and view all the answers

Which type of investment involves variable returns based on equity sharing?

Muzaraa financing Signup and view all the answers