Principles of Islamic finance (Islamic Study) MCQs

1.Which principle of Islamic finance prohibits interest-based transactions?

a. Riba
b. Murabaha
c. Takaful
d. Istisna

Answer: a. Riba

2.What does “Ijarah” entail in Islamic finance?

a. Profit sharing
b. Cost-plus financing
c. Leasing
d. Venture capital investment

Answer: c. Leasing

3.Which Islamic finance principle involves profit-sharing arrangements?

a. Musharakah
b. Murabaha
c. Waqf
d. Qard Hasan

Answer: a. Musharakah

4.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

5.In Islamic finance, what does “Musharakah” refer to?

a. Asset leasing
b. Cost-plus financing
c. Partnership
d. Interest payments

Answer: c. Partnership

7.What is “Waqf” in Islamic finance?

a. Islamic bonds
b. Charitable endowment
c. Interest-free loan
d. Commodity trading

Answer: b. Charitable endowment

8.Which principle of Islamic finance involves deferred payments with a markup?

a. Murabaha
b. Mudarabah
c. Ijarah
d. Takaful

Answer: a. Murabaha

9.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

10.Which principle of Islamic finance involves risk-sharing between parties?

a. Mudarabah
b. Murabaha
c. Tawarruq
d. Takaful

Answer: a. Mudarabah

11.What is “Tawarruq” in Islamic finance?

a. Islamic bonds
b. Profit sharing
c. Asset leasing
d. Commodity trading

Answer: d. Commodity trading