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ISLAMIC FINANCE SYSTEM

Total questions: 20

Worksheet time: 33mins

Name
Class
Date
1.

In Bai’ al-Salam,

a)

Delivery is deferred, and payment is spot.

b)

Payment is deferred, and delivery is spot.

c)

  Delivery is deferred, and payment is deferred.

d)

Payment is spot, and delivery is spot.

2.

The Islamic financial system prohibits transactions featuring ...

a)

Extreme uncertainties resulting from speculation and gambling.

   

b)

Sharing of profit and risk of loss.

  

c)

Partnership agreements.

d)

Trading for profit.

3.

Management is carried out by mudarib (entrepreneur) only exists in which Islamic mode of financing?

 

a)

Bai' al-Salam

    

b)

Murabahah

c)

Musharakah

d)

Mudarabah

4.

Five persons from general public each deposit RM1,000 in a saving account at an Islamic bank. The saving account is offered using Mudarabah. If a loss occurs, it will be borne by: 

a)

Mudarib (entrepreneur)

b)

Rabb-ul Maal (investor)

c)

Mudarib and Rabb-ul Maal

d)

Muslam Ilaihi (seller)

5.

Which of the following is not included as one of the classifications of sectors of the global Islamic economy?

 

a)

The Islamic finance industry.

b)

The halal pharmaceutical industry.

c)

Muslim-friendly travel.

d)

All of the above are a classification of the global Islamic economy.

6.

The main difference between Sukuk and conventional bonds is:

 

a)

Investors of Sukuk do not get coupon interest and instead get profit or rent depending on the underlying contract.

b)

Sukuk is based on underlying Islamic nominate contracts that are available in Islamic commercial jurisprudence.

c)

Sukuk always has an underlying asset, whether asset-backed or asset-based.

d)

All of the available answers are correct differences of Sukuk and bonds.

7.

Ahmad has RM10,000 capital and gives it to Karim for doing business. The profit will be given based on the ratio.

 

a)

Musyarakah

b)

Murabahah

c)

Mudharabah

d)

Bai al-Salam

8.

In which contract of Islamic modes of financing, it is mandatory to disclose the cost to the client?

 

a)

Murabahah

b)

Musyarakah

c)

Ijarah

d)

Bai’ al-Salam

9.

Please choose the wrong statement:

 

a)

Islamic finance can be found only in Muslim countries.

b)

Islamic finance exists in both Muslim and non-Muslim countries.

c)

Islamic finance prohibits riba.

d)

Islamic finance exists in rich as well as in poorer countries.

10.

The first Islamic bank establishment was ...

a)

Bank Islam Malaysia Berhad

b)

Bank Muamalat Malaysia Berhad

c)

Al Rajhi Banking & Investment Corporation (Malaysia) Bhd

d)

AmBank Islamic Bhd

11.

Which of the below mentioned institutions is responsible for issuing Islamic finance-related supervisory and regulatory standards and guidelines?

 

a)

Accounting and Auditing Organization

b)

Islamic Finance International Forum

c)

Islamic Financial Services Board

d)

International Islamic Financial Market

12.

In Islam excessive uncertainty is prohibited. What is it called?

 

a)

Gharar

b)

Riba

c)

Maysir

d)

Zakat

13.

In Islamic economics, the profit obtained from __________ and from _______________ is considered to be legitimate.

 

a)

Risk-sharing; financial speculation

b)

Intellectual gambling; risk sharing

c)

Financial speculation; productive human activity

d)

Productive human activity; risk sharing

14.

Musharakah is ...

 

a)

A benevolent loan, a form of financial assistance to the needy to be repaid free of charge.

b)

A joint partnership where two or more partners provide capital to finance a project.

c)

An increase in wealth that is not related to engaging in productive activity.

d)

Generally used to finance consumer and corporate credit.

15.

Profit-and-loss sharing instrument is

 

a)

Musharakah

b)

Murabahah

c)

Ijarah

d)

Bai’ al-Salam

16.

Please name the country that first issued Sukuk.

 

a)

Iran

b)

United Arab Emirates (UAE)

c)

Malaysia

d)

Indonesia

17.

Please name a contract based on which a commodity can be transacted before it comes into existence.

 

a)

Istisna’

b)

Ijarah

c)

Bai’ al-Salam.

d)

Istisna’ and

Bai’ al-Salam.

18.

Will an Islamic bank cover all losses entirely if a project turns out to be unsuccessful if this is mudarabah agreement?

 

a)

Yes, in all cases.

b)

No, the bank will not cover any losses.

c)

The bank will cover losses together with all other partners.

d)

No correct answer.

19.

What is sukuk?

 

a)

Profit-loss sharing instrument.

 

b)

Equity security.

 

c)

A bond.

d)

Shariah-compliant bond-like instruments. 

20.

Which of the following is NOT considered to be one of the necessary conditions of Mudharabah?

 

a)

Profit is to be shared according to the profit-sharing ratio determined at the inception of the contract.

b)

The capital provided cannot pay a periodical salary to the mudharib.

c)

Loss is to be borne by the capital provider in all cases, even if it is due to the negligence of the mudharib.

d)

Sub-Mudharabah is not allowed without the permission of the capital provider.