FIN451 Chapter 4

What are the two major sources of funds for Islamic banks?

• Current accounts and savings accounts

• Savings deposits and investment deposits

• Checking accounts and investment accounts

• Transaction deposits and investment deposits

What is the main purpose of applying funds in Islamic banks?

• To pay off debts

• To provide loans to customers

• To raise profits in different ways

• To invest in the stock market

Which of the following is a debt-based financing instrument in Islamic banking?

• Musharakah

• Mudarabah

• Ijarah (Lease)

• Murabahah (Mark-up)

What does Murabahah in Islamic banking involve?

• Manufacturing contract

• Sale with immediate purchase

• Cost-plus financing contract

• Deferred sale contract

What is the root word of Murabahah and what does it mean?

• Ribh - Profit

• Ribh - Loss

• Ribh - Debt

• Ribh - Investment