Islamic Finance (Islamic Study) MCQs

By: Prof. Dr. Fazal Rehman | Last updated: May 19, 2025

1. : What is the primary source of guidance for Islamic finance?
(A) The Quran
(B) The Bible
(C) The Bhagavad Gita
(D) The Torah

2. : What is the Islamic term for interest?
(A) Halal
(B) Riba
(C) Zakat
(D) Sadaqah

3. : In Islamic finance, what does the term “Shariah-compliant” mean?
(A) It conforms to Islamic law
(B) It follows secular regulations
(C) It’s based on Buddhist principles
(D) It’s approved by the World Bank

4. : What is the concept of “Mudarabah” in Islamic finance?
(A) Profit sharing
(B) Interest payments
(C) Stock dividends
(D) Asset leasing

5. : What is “Zakat” in Islamic finance?
(A) A form of taxation
(B) A loan agreement
(C) A type of investment
(D) A charitable obligation

6. : What is the Islamic term for the practice of donating a certain percentage of wealth to charity?
(A) Zakat
(B) Ribah
(C) Musharakah
(D) Ijarah

7. : Which of the following is considered permissible in Islamic finance?
(A) Speculative trading
(B) Paying interest on loans
(C) Gambling
(D) Investing in alcohol companies

8. : What does “Ijarah” refer to in Islamic finance?
(A) Leasing
(B) Interest
(C) Debt financing
(D) Equity investment

9. : What is the Islamic principle of “Gharar”?
(A) Uncertainty or ambiguity
(B) Fair dealing
(C) Charity
(D) Usury

10. : Which type of financial transaction is prohibited in Islamic finance due to the concept of “Gharar”?
(A) Speculative trading
(B) Profit sharing
(C) Debt financing
(D) Asset leasing

11. : What is the Islamic term for a contract that involves joint venture partnerships?
(A) Musharakah
(B) Murabaha
(C) Takaful
(D) Istisna

12. : Which principle of Islamic finance emphasizes risk-sharing between parties?
(A) Mudarabah
(B) Murabaha
(C) Tawarruq
(D) Takaful

13. : What does “Murabaha” entail in Islamic finance?
(A) Cost-plus financing
(B) Profit sharing
(C) Asset leasing
(D) Interest payments

14. : What is “Sukuk” in Islamic finance?
(A) Islamic bonds
(B) Interest-based loans
(C) Mutual funds
(D) Currency trading

15. : What is the Islamic term for a charitable endowment?
(A) Waqf
(B) Qard Hasan
(C) Hawala
(D) Mudarabah

16. : In Islamic finance, what does “Qard Hasan” refer to?
(A) An interest-free loan
(B) Profit sharing
(C) Mortgage financing
(D) Venture capital investment

17. : Which of the following is a mode of Islamic finance that involves commodity trading?
(A) Murabaha
(B) Ijarah
(C) Istisna
(D) Tawarruq

18. : What is the Islamic term for Islamic insurance?
(A) Takaful
(B) Murabaha
(C) Musharakah
(D) Riba