Principles of Islamic finance (Islamic Study) MCQs

Which principle of Islamic finance prohibits interest-based transactions?
a. Riba
b. Murabaha
c. Takaful
d. Istisna

Answer: a. Riba

What does “Ijarah” entail in Islamic finance?
a. Profit sharing
b. Cost-plus financing
c. Leasing
d. Venture capital investment

Answer: c. Leasing

Which Islamic finance principle involves profit-sharing arrangements?
a. Musharakah
b. Murabaha
c. Waqf
d. Qard Hasan

Answer: a. Musharakah

What is the Islamic term for a partnership-based contract in which profits and losses are shared?
a. Mudarabah
b. Murabaha
c. Tawarruq
d. Istisna

Answer: a. Mudarabah

In Islamic finance, what does “Musharakah” refer to?
a. Asset leasing
b. Cost-plus financing
c. Partnership
d. Interest payments

Answer: c. Partnership

What is “Waqf” in Islamic finance?
a. Islamic bonds
b. Charitable endowment
c. Interest-free loan
d. Commodity trading

Answer: b. Charitable endowment

Which principle of Islamic finance involves deferred payments with a markup?
a. Murabaha
b. Mudarabah
c. Ijarah
d. Takaful

Answer: a. Murabaha

What is “Qard Hasan” in Islamic finance?
a. An interest-free loan
b. Profit sharing
c. Asset leasing
d. Currency trading

Answer: a. An interest-free loan

Which principle of Islamic finance involves risk-sharing between parties?
a. Mudarabah
b. Murabaha
c. Tawarruq
d. Takaful

Answer: a. Mudarabah

What is “Tawarruq” in Islamic finance?
a. Islamic bonds
b. Profit sharing
c. Asset leasing
d. Commodity trading

Answer: d. Commodity trading