Islamic Banking and Finance Quiz

What is an overdraft facility under a current account?

• A financial product that allows you to withdraw more money than you have in your account

• A type of investment in the stock market

• A government tax on excessive spending

• A form of insurance for protecting against bank fraud

What is the purpose of purchasing outstation or outport cheques in Islamic banking?

• To earn interest on the deposited funds

• To facilitate cheque outside the ‘clearing area’ of the bank

• To promote speculative investments

• To comply with environmental regulations

What is the repayment structure where interest and principal to be repaid in one lump sum at the end of loan period.?

• Monthly repayments of interest only

• Balloon payment at the end of the loan period

• Quarterly repayments of principal only

• Semi-annual repayments of interest and principal

What is the purpose of a murabahah contract in Islamic banking?

• To buy goods on credit with a profit margin

• To share gains and losses in a partnership

• To facilitate long-term financing

• To pool resources for investment

What is the tawarruq mechanism used for in Islamic banking?

• To pool resources for investment

• To facilitate long-term investment

• To borrow money using two legitimate transactions

• To share gains and losses in a partnership

What is the main characteristic of a musharakah partnership in Islamic banking?

• Repayment in instalments

• Sharing gains and losses

• Immediate payment for goods

• Investment margin

What is the purpose of a unit trust in Islamic banking?

• To pool resources for investment

• To facilitate long-term financing

• To buy goods on credit with a profit margin

• To share gains and losses in a partnership

What is the purpose of will writing services in Islamic banking?

• To share gains and losses in a partnership

• To ensure disposition of assets according to personal wishes

• To facilitate long-term financing

• To pool resources for investment

What is the main purpose of insurance in Islamic banking?

• To hedge against the risk of a contingent loss

• To facilitate long-term financing

• To share gains and losses in a partnership

• To pool resources for investment

What is the main purpose of share trading in Islamic banking?

• To pool resources for investment

• To facilitate long-term financing

• To purchase shares using own funds

• To share gains and losses in a partnership