Solved MCQS on Islamic Banking.

1. Islamic Finance is strongly _____ oriented.
(A) profit
(B) money
(C) equity
(D) interest

2. In Islamic Finance, the owner of capital _____ the profits made by the entrepreneur.
(A) can share
(B) cannot share
(C) receive
(D) can never take

3. The Islamic financial system regards “the time value of money” as

(A) interest
(B) rent
(C) loss
(D) profit

4. The Islamic financial system regards “the monetary value of time” as
(A) interest
(B) profit
(C) loss
(D) rent

5. In Sharia law and Islamic financing, “making money from money” is

(A) permitted
(B) not permitted
(C) permitted in certain cases
(D) permitted for Islamic banks only

6. The Islamic financial system works on the basis of
(A) sharing return
(B) sharing risk
(C) sharing risk and return
(D) predetermined risk and return

7. In Islamic banking and finance, any deal must have an underlying _____ backing the deal.
(A) asset
(B) profit
(C) risk
(D) currency

8. A “sukuk” is basically a Shariah-compliant

(A) loan
(B) profit
(C) bank cheque
(D) investment certificate

9. “Takaful” is basically a Shariah-compliant
(A) loan
(B) insurance
(C) investment
(D) ownership

10. Which from the following is/are NOT permitted under Islamic Financial Principles?

I. Interest
II. Short selling
III. Non-asset backed derivatives
(A) I only
(B) I and II
(C) I and III
(D) I, II and III

ANSWERS: ISLAMIC BANKING AND FINANCE MCQS

1. (C) equity
2. (A) can share
3. (D) profit
4. (A) interest
5. (B) not permitted

6. (C) sharing risk and return

7. (A) asset

8. (D) investment certificate
9. (B) insurance
10. (D) I, II and III