10 Questions
Which concept can reduce the effect of moral hazard and adverse selection?
Incentive compatible contracts
What do banks specialize in optimizing?
Credit portfolios
What is the risk of Musharakah - Mudarabah (M-M) financing?
Systemic instability
Why can't shocks on the assets side be absorbed by current accounts on the liability side?
High utilization of current accounts
What is the main concern about the greater use of M-M on the asset side?
Systemic instability
What do Islamic banks primarily use on the liability side?
Current accounts
What is the argument against the use of incentive compatible contracts?
Specialization of banks
What can reduce the effect of moral hazard and adverse selection?
Incentive compatible contracts
What is the main concern about the shocks on the assets side?
Systemic instability
What is the potential consequence of greater use of M-M on the asset side?
Systemic instability
Test your knowledge on the binding nature of promises in Murabahah financing with this quiz. Learn about the differing views of scholars and the treatment of promises by OIC Fiqh Academy, AAOIFI, and Islamic banks.
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