Fiqh MCQs

Banking and Finance in Islamic Law MCQs

The following are Banking and Finance in Islamic Law MCQs with answers related to Islamic Studies. We have arranged the most important and repeated MCQs in all the competitive examinations. The students can clear their concepts for Banking and Finance in Islamic Law MCQs online quiz by attempting these.

Banking and Finance in Islamic Law Online MCQs with Answers

What is the term for Islamic financial contracts that involve profit and loss sharing?
A) Mudarabah
B) Murabaha
C) Ijarah
D) Salam

Answer
A

Which principle prohibits interest in Islamic finance?
A) Riba
B) Gharar
C) Qimar
D) Takaful

Answer
A

What does the term “Musharakah” refer to in Islamic finance?
A) Profit and loss sharing
B) Fixed interest payments
C) Sale of goods at a deferred price
D) Leasing agreement

Answer
A

What type of Islamic financial contract involves buying an asset and selling it to the customer at a marked-up price?
A) Mudarabah
B) Murabaha
C) Ijarah
D) Istisna’a

Answer
B

What’s the Islamic term for charity or almsgiving?
A) Zakat
B) Waqf
C) Takaful
D) Qard

Answer
A

In Islamic finance, what is “Takaful”?
A) Interest-based loan
B) Asset-backed security
C) Insurance based on mutual cooperation
D) Sale of goods at a fixed price

Answer
C

What’s the Islamic term for a contract of exchange where the price is paid immediately but delivery is deferred?
A) Bai Salam
B) Bai’ Bithaman Ajil
C) Mudarabah
D) Ijarah

Answer
A

Which Islamic financial contract involves the sale of debt at a discount with immediate payment?
A) Tawarruq
B) Istisna’a
C) Wakalah
D) Bai’ al-Dayn

Answer
A

What’s the principle of “Gharar” in Islamic finance?
A) Profit and loss sharing
B) Uncertainty or excessive ambiguity
C) Interest-based transactions
D) Equity financing

Answer
B

What’s the purpose of an “Islamic Sukuk”?
A) Providing interest-based loans
B) Issuing shares of ownership
C) Facilitating gambling transactions
D) Trading in forbidden goods

Answer
B

In Islamic banking, what’s the term for an arrangement where the bank buys an asset and leases it to the customer?
A) Mudarabah
B) Murabaha
C) Ijarah
D) Qard

Answer
C

What’s the Islamic term for a contract of exchange that involves buying and selling two different commodities?
A) Murabaha
B) Istisna’a
C) Bai’ al-Dayn
D) Bai’ al-Sarf

Answer
D

In Islamic finance, what’s “Istisna’a”?
A) Deferred payment sale contract
B) Forward contract for future delivery
C) Leasing agreement
D) Profit-sharing agreement

Answer
B

Which principle emphasizes the sharing of losses as well as profits in Islamic finance?
A) Riba
B) Gharar
C) Mudarabah
D) Tawarruq

Answer
C

What’s the Islamic term for a contract where one party guarantees a loan for another?
A) Takaful
B) Wakalah
C) Kafala
D) Qard

Answer
C

What’s the primary objective of Islamic finance?
A) Maximizing shareholder wealth
B) Promoting ethical investment
C) Eliminating all financial risks
D) Generating interest income

Answer
B

Which Islamic financial instrument represents ownership in a tangible asset or business?
A) Sukuk
B) Mudarabah
C) Murabaha
D) Ijarah

Answer
A

What’s the Islamic term for a contract of exchange that involves buying and selling the same commodity for different prices and at different times?
A) Ijarah
B) Tawarruq
C) Bai’ al-Inah
D) Bai’ al-Sarf

Answer
C

What’s the Islamic concept that encourages mutual assistance and solidarity in times of financial need?
A) Waqf
B) Takaful
C) Qard
D) Gharar

Answer
B

In Islamic finance, what’s the concept of “Waqf”?
A) Interest-based loan
B) Financial derivatives
C) Charitable endowment
D) Forward contract

Answer
C

Which Islamic financial contract involves a partnership where one party provides capital and the other party provides labor or expertise?
A) Murabaha
B) Mudarabah
C) Istisna’a
D) Ijarah

Answer
B

What’s the Islamic term for a contract of exchange that involves buying an asset with deferred payment and selling it for cash?
A) Bai Salam
B) Bai’ al-Inah
C) Tawarruq
D) Bai’ Bithaman Ajil

Answer
D

What’s the Islamic principle that encourages transparency, disclosure, and truthful representation in business transactions?
A) Ihsan
B) Amanah
C) Shari’ah
D) Al-‘Adl

Answer
D

In Islamic finance, what’s the term for a contract of exchange that involves buying and selling currency at different prices?
A) Bai’ al-Inah
B) Tawarruq
C) Bai’ al-Sarf
D) Qard

Answer
C

What’s the Islamic term for a contractual gift, where one party gives a gift to another without any compensation in return?
A) Zakat
B) Sadaqah
C) Hawala
D) Waqf

Answer
B

Which principle in Islamic finance involves the prohibition of unjust enrichment?
A) Amanah
B) Qimar
C) Al-‘Adl
D) Riba

Answer
C

What’s the Islamic term for a financial transaction where one party provides a loan without charging any interest?
A) Mudarabah
B) Qard
C) Gharar
D) Tawarruq

Answer
B

In Islamic finance, what’s the concept of “Hawala”?
A) Deferred payment
B) Monetary gift
C) Informal money transfer
D) Profit-sharing

Answer
C

What’s the term for the document that outlines the Islamic rules and principles that a financial institution must adhere to?
A) Murabaha
B) Fatwa
C) Takaful
D) Shari’ah compliance certificate

Answer
D

In Islamic finance, what’s “Qimar”?
A) Risk-sharing
B) Interest-based transaction
C) Gambling or games of chance
D) Fixed-price contract

Answer
C

What’s the term for the Islamic concept of holding and using wealth responsibly?
A) Riba
B) Ihsan
C) Amanah
D) Qimar

Answer
C

What’s the principle of “Amanah” in Islamic finance?
A) Honesty and integrity
B) Excessive ambiguity
C) Speculative trading
D) Interest-based transactions

Answer
A

In Islamic finance, what’s the concept of “Shari’ah”?
A) Ethical investment
B) Usury
C) Islamic law and principles
D) Speculation

Answer
C

What’s the Islamic term for the profit-sharing ratio in a Mudarabah contract?
A) Musharakah
B) Ijarah
C) Riba
D) Rab al-Maal

Answer
D

Which Islamic principle encourages excellence and perfection in all aspects of life, including financial dealings?
A) Ihsan
B) Riba
C) Gharar
D) Qard

Answer
A

What’s the Islamic term for a contract of exchange that involves selling a product at a deferred price?
A) Ijarah
B) Bai’ al-Sarf
C) Bai’ Bithaman Ajil
D) Mudarabah

Answer
C

In Islamic finance, what’s the term for a partnership where both parties contribute capital and share profits and losses?
A) Mudarabah
B) Murabaha
C) Ijarah
D) Istisna’a

Answer
A

What’s the Islamic term for a contract of exchange that involves selling a product at a higher price than the cost?
A) Bai’ al-Sarf
B) Istisna’a
C) Tawarruq
D) Murabaha

Answer
D

Which Islamic financial instrument represents a certificate of ownership in an underlying asset?
A) Tawarruq
B) Mudarabah
C) Sukuk
D) Ijarah

Answer
C

In Islamic finance, what’s the term for a contract of exchange that involves the sale of goods at a future date and a deferred price?
A) Ijarah
B) Istisna’a
C) Bai’ Bithaman Ajil
D) Bai Salam

Answer
D

What’s the Islamic term for the process of making an investment decision based on the principles of Islamic finance?
A) Ijarah
B) Istisna’a
C) Shari’ah
D) Tawarruq

Answer
C

In Islamic finance, what’s the term for a contractual arrangement where one party provides a loan without any interest?
A) Mudarabah
B) Qard
C) Gharar
D) Tawarruq

Answer
B

What’s the Islamic term for a contract of exchange that involves the sale of goods with deferred payment and immediate delivery?
A) Bai Salam
B) Bai’ al-Sarf
C) Bai’ al-Inah
D) Tawarruq

Answer
C

In Islamic finance, what’s the concept of “Tawarruq”?
A) Trade financing
B) Debt trading
C) Partnership
D) Profit-sharing

Answer
B

Which Islamic principle emphasizes justice and fairness in financial dealings?
A) Riba
B) Qard
C) Al-‘Adl
D) Gharar

Answer
C

What’s the Islamic term for a contract of exchange that involves selling currency for currency with immediate settlement?
A) Bai Salam
B) Bai’ al-Sarf
C) Bai’ al-Inah
D) Bai’ Bithaman Ajil

Answer
B

In Islamic finance, what’s the term for a contract of exchange that involves the sale of goods at a higher price on credit?
A) Ijarah
B) Bai’ al-Inah
C) Bai’ al-Dayn
D) Istisna’a

Answer
C

What’s the Islamic term for a contract of exchange that involves selling a product at a higher price than the cost with immediate payment?
A) Bai’ al-Sarf
B) Bai’ al-Dayn
C) Bai’ al-Inah
D) Bai Salam

Answer
B

In Islamic finance, what’s the concept of “Ihsan”?
A) Excellence and perfection in all actions
B) Interest-based transactions
C) Speculative trading
D) Gambling or games of chance

Answer
A

What’s the Islamic term for a contract of exchange that involves selling currency for currency at a future date and a deferred price?
A) Bai’ al-Sarf
B) Istisna’a
C) Bai Salam
D) Bai’ al-Dayn

Answer
D

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