ISLAMIC FINANCE

What is the core principle of Islamic banking?

• Focused only on maximizing profits.

• Allowing interest-based transactions.

• Based on Shariah law, avoiding interest and unethical activities.

• Encouraging investment in any sector.

What is a key feature of profit-sharing in Islamic finance?

• Fixed interest rates on investments.

• Investment in any high-risk venture.

• Risk-sharing between parties involved.

• Guaranteed returns for investors.

Which of the following is prohibited in Islamic banking?

• Engaging in speculative transactions.

• Investing in ethical businesses.

• Financing charitable activities.

• Providing interest-free loans.

How does Islamic banking handle profits?

• Keeps all profits for itself.

• Relies on penalty fees as a major income source.

• Uses profit-sharing and trade-based models.

• Charges interest on loans.

How are late payment penalties handled in Islamic banking?

• They are retained as profit by the bank.

• They are donated to charity.

• They are waived entirely.

• They are doubled to discourage late payments.

Which of the following is a key focus of Islamic banking?

• Prioritizing bank profits over fairness.

• Unlimited investment opportunities, including unethical sectors.

• High-interest loans for customers.

• Social responsibility and ethical practices.

What is the risk-sharing approach in Islamic banking?

• The customer bears all risks.

• The bank bears all risks for the customer.

• The bank and customer share risks and rewards.

• Risks are avoided entirely.

Which of the following is NOT a pillar of Shariah contracts?

• Contracting parties (Aqidan)

• Subject matter

• External guarantor

• Offer and acceptance

A Shariah contract is invalid if the contracting parties are minors or mentally incompetent

• TRUE

• FALSE

Which of the following examples violates the pillar of "subject matter"

• Purchasing a tangible good with deferred payment

• Selling a product not yet owned by the seller

• Selling lawful (Halal) goods at a fair price