Islamic History MCQs

Islamic Finance – Principles of Islamic Banking

The following are Islamic Finance – Principles of Islamic Banking 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 Islamic Finance – Principles of Islamic Banking MCQs online quiz by attempting these.

Islamic Finance – Principles of Islamic Banking Online MCQs with Answers

What is the core principle of Islamic finance that prohibits the payment or acceptance of interest on loans?
a) Riba
b) Zakat
c) Mudarabah
d) Ijarah

Answer
a) Riba

Which term in Islamic finance refers to charitable giving or almsgiving, typically a fixed percentage of one’s wealth?
a) Takaful
b) Riba
c) Zakat
d) Murabaha

Answer
c) Zakat

What is the Islamic finance contract where two or more parties pool their capital to invest in a venture, with profits shared according to a predetermined ratio?
a) Riba
b) Mudarabah
c) Ijarah
d) Takaful

Answer
b) Mudarabah

Which type of Islamic finance contract involves the sale of goods at a marked-up price, allowing deferred payment?
a) Murabaha
b) Wakalah
c) Sukuk
d) Qard Hasan

Answer
a) Murabaha

What term is used in Islamic finance to describe a lease contract where one party rents an asset to another, typically with an option to purchase?
a) Wakalah
b) Ijarah
c) Mudarabah
d) Takaful

Answer
b) Ijarah

Which Islamic finance principle encourages risk-sharing and prohibits guaranteed returns, making it similar to equity financing?
a) Riba
b) Mudarabah
c) Murabaha
d) Ijarah

Answer
b) Mudarabah

What is the term for Islamic bonds that represent ownership in an underlying asset, complying with Shariah principles?
a) Sukuk
b) Takaful
c) Riba
d) Zakat

Answer
a) Sukuk

In Islamic finance, what does “Wakalah” refer to?
a) Profit sharing
b) Agency agreement
c) Charity
d) Interest-bearing loan

Answer
b) Agency agreement

Which Islamic finance contract involves the sale of goods at cost plus an agreed-upon profit margin, with deferred payment?
a) Mudarabah
b) Murabaha
c) Ijarah
d) Takaful

Answer
b) Murabaha

What is the term for a benevolent loan in Islamic finance, where the lender does not charge interest or profit on the loan?
a) Takaful
b) Riba
c) Qard Hasan
d) Mudarabah

Answer
c) Qard Hasan

What is the Islamic finance principle that emphasizes full disclosure and transparency in financial transactions?
a) Riba
b) Amanah
c) Ijarah
d) Musharakah

Answer
b) Amanah

In Islamic finance, what is “Tawarruq” commonly known as?
a) Profit-sharing
b) Barter trade
c) Reverse Murabaha
d) Charity

Answer
c) Reverse Murabaha

Which Islamic finance principle promotes ethical and socially responsible investments, avoiding businesses that engage in haram (forbidden) activities?
a) Riba
b) Amanah
c) Halal
d) Ijarah

Answer
c) Halal

What is the Islamic finance term for profit and loss sharing, where both parties share in the profits and losses of a venture?
a) Takaful
b) Musharakah
c) Mudarabah
d) Riba

Answer
b) Musharakah

What is the term for the Islamic insurance concept that operates on the principle of mutual cooperation and risk-sharing?
a) Riba
b) Takaful
c) Wakalah
d) Qard Hasan

Answer
b) Takaful

In Islamic finance, what does “Amanah” refer to?
a) Profit sharing
b) Charity
c) Trustworthiness and honesty
d) Interest-bearing loan

Answer
c) Trustworthiness and honesty

What is the term for the Islamic finance principle that prohibits gambling and uncertainty in contracts?
a) Gharar
b) Riba
c) Qard Hasan
d) Wakalah

Answer
a) Gharar

Which Islamic finance principle emphasizes the avoidance of excessive risk and speculation in financial transactions?
a) Gharar
b) Amanah
c) Mudarabah
d) Ijarah

Answer
a) Gharar

What is the term for the Islamic finance contract where one party provides funds, and the other party manages the investment, sharing profits or losses?
a) Murabaha
b) Wakalah
c) Mudarabah
d) Ijarah

Answer
c) Mudarabah

In Islamic finance, what does “Gharar” refer to?
a) Charity
b) Risk and uncertainty
c) Profit-sharing
d) Zakat

Answer
b) Risk and uncertainty

What is the Islamic finance term for a contract of trustworthiness and honesty, emphasizing integrity in business and financial dealings?
a) Gharar
b) Riba
c) Amanah
d) Mudarabah

Answer
c) Amanah

What term is used in Islamic finance for a transaction or contract that complies with Islamic law and principles?
a) Takaful
b) Halal
c) Gharar
d) Riba

Answer
b) Halal

In Islamic finance, what does “Wakalah” refer to?
a) Profit sharing
b) Agency agreement
c) Charity
d) Interest-bearing loan

Answer
b) Agency agreement

What is the Islamic finance principle that emphasizes ethical and lawful conduct in financial transactions?
a) Gharar
b) Amanah
c) Halal
d) Riba

Answer
c) Halal

Which Islamic finance principle promotes the equitable distribution of wealth and resources in society through obligatory giving?
a) Takaful
b) Zakat
c) Mudarabah
d) Riba

Answer
b) Zakat

What is the Islamic finance term for a trust or contract of trustworthiness, emphasizing honesty and integrity in financial transactions?
a) Gharar
b) Amanah
c) Halal
d) Takaful

Answer
b) Amanah

Which Islamic finance contract involves the sale of goods at cost plus an agreed-upon profit margin, with deferred payment?
a) Mudarabah
b) Murabaha
c) Ijarah
d) Takaful

Answer
b) Murabaha

In Islamic finance, what does “Qard Hasan” refer to?
a) Interest-bearing loan
b) Profit-sharing
c) Benevolent loan
d) Risk-sharing

Answer
c) Benevolent loan

What is the Islamic finance term for a cooperative concept that encourages mutual help and assistance in times of need?
a) Takaful
b) Wakalah
c) Gharar
d) Riba

Answer
a) Takaful

Which Islamic finance principle promotes ethical and lawful conduct, prohibiting investments in businesses involved in haram activities?
a) Takaful
b) Riba
c) Halal
d) Gharar

Answer
c) Halal

What is the term for the Islamic finance contract where one party rents an asset to another, typically with an option to purchase?
a) Ijarah
b) Takaful
c) Wakalah
d) Gharar

Answer
a) Ijarah

In Islamic finance, what does “Mudarabah” refer to?
a) Profit-sharing
b) Benevolent loan
c) Risk-sharing
d) Charity

Answer
a) Profit-sharing

What is the term for the Islamic finance contract that involves the sale of goods at a marked-up price, allowing deferred payment?
a) Sukuk
b) Murabaha
c) Qard Hasan
d) Wakalah

Answer
b) Murabaha

Which Islamic finance principle encourages risk-sharing and prohibits guaranteed returns, making it similar to equity financing?
a) Riba
b) Musharakah
c) Gharar
d) Takaful

Answer
b) Musharakah

What is the Islamic finance term for profit and loss sharing, where both parties share in the profits and losses of a venture?
a) Gharar
b) Takaful
c) Musharakah
d) Riba

Answer
c) Musharakah

In Islamic finance, what does “Qard Hasan” refer to?
a) Interest-bearing loan
b) Profit-sharing
c) Benevolent loan
d) Risk-sharing

Answer
c) Benevolent loan

What is the term for the Islamic finance contract where one party provides funds, and the other party manages the investment, sharing profits or losses?
a) Mudarabah
b) Ijarah
c) Murabaha
d) Wakalah

Answer
a) Mudarabah

In Islamic finance, what does “Wakalah” refer to?
a) Profit sharing
b) Agency agreement
c) Charity
d) Interest-bearing loan

Answer
b) Agency agreement

What is the Islamic finance term for a cooperative concept that encourages mutual help and assistance in times of need?
a) Takaful
b) Riba
c) Gharar
d) Wakalah

Answer
a) Takaful

Which Islamic finance principle promotes ethical and lawful conduct, prohibiting investments in businesses involved in haram activities?
a) Takaful
b) Halal
c) Riba
d) Gharar

Answer
b) Halal

What is the term for the Islamic finance contract that involves the sale of goods at cost plus an agreed-upon profit margin, with deferred payment?
a) Ijarah
b) Takaful
c) Wakalah
d) Qard Hasan

Answer
a) Ijarah

In Islamic finance, what does “Mudarabah” refer to?
a) Profit-sharing
b) Benevolent loan
c) Risk-sharing
d) Charity

Answer
a) Profit-sharing

What is the Islamic finance term for a trust or contract of trustworthiness, emphasizing honesty and integrity in financial transactions?
a) Gharar
b) Amanah
c) Halal
d) Takaful

Answer
b) Amanah

Which Islamic finance contract involves the sale of goods at cost plus an agreed-upon profit margin, with deferred payment?
a) Murabaha
b) Ijarah
c) Takaful
d) Wakalah

Answer
a) Murabaha

In Islamic finance, what does “Qard Hasan” refer to?
a) Interest-bearing loan
b) Profit-sharing
c) Benevolent loan
d) Risk-sharing

Answer
c) Benevolent loan

What is the Islamic finance term for a cooperative concept that encourages mutual help and assistance in times of need?
a) Takaful
b) Wakalah
c) Gharar
d) Riba

Answer
a) Takaful

Which Islamic finance principle promotes ethical and lawful conduct, prohibiting investments in businesses involved in haram activities?
a) Takaful
b) Halal
c) Riba
d) Gharar

Answer
b) Halal

What is the term for the Islamic finance contract that involves the sale of goods at cost plus an agreed-upon profit margin, with deferred payment?
a) Sukuk
b) Murabaha
c) Qard Hasan
d) Wakalah

Answer
b) Murabaha

In Islamic finance, what does “Musharakah” refer to?
a) Profit-sharing
b) Benevolent loan
c) Risk-sharing
d) Charity

Answer
c) Risk-sharing

What is the Islamic finance term for profit and loss sharing, where both parties share in the profits and losses of a venture?
a) Gharar
b) Takaful
c) Musharakah
d) Riba

Answer
c) Musharakah

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