Islamic Finance Contracts Quiz

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10 Questions

What does Wadia'h mean in the context of Islamic finance?

Safekeeping or depositing something with someone who is not the owner

What is the main benefit for customers under the Islamic scheme of savings and current account?

Interest-free safekeeping services for their money

What authority does the bank have over customers' deposits under Al Wadia'h?

To use the deposits and guarantee to return them when needed

What is the customers' alternative to interest income from a conventional bank under Al Wadia'h?

A share of profits earned by the bank

'Discharge the trust to the person who entrusts it to you and do not betray the one who betrays you' - Who is associated with this saying?

'The Prophet Muhammad S.A.W'

Which of the following best describes the typical maturities of Treasury Bills?

Three, six, and twelve months

Why do Treasury Bills carry no default risk?

The government can issue more money to redeem the bills if needed

What is the primary source of yield for investors in Treasury Bills?

Increase in value of the security over time

In a Repurchase Agreement (Repo), who is effectively the lender of funds?

The investor who initially purchases the securities

What characterizes the money market in terms of tenure for transactions?

From overnight to 12 months with most common being three months or less

Test your knowledge of Islamic finance contracts with this quiz covering topics such as Wadi'ah, 'Uqud Al Tawthiqat, and Wakalah. Explore the intricacies of safe custody, security, and work-related contracts in Islamic finance.

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