Test your knowledge

Mutiple Choice Questions

Here are fifteen Multiple Choice Questions (MCQs) that will test your knowledge about the basic Islamic economic principles and the rulings that apply to Islamic contracts, Islamic banking and finance, and takaful (the alternative to conventional insurance. The Islamic principles and rulings form a part of Shari'ah and a moral code aimed at promoting fairness and justice.

Take the test to build a knowledge profile of the ethical and moral mode emphasised in financial dealings.

The correct answer of each MCQ can be viewed at the end of the test.

Have a go. Good luck.

1 / 15

In Arabic, a game of chance or gambling, is known as

Batil

Iman

Maysir

Haram

2 / 15

In Islamic banking and finance, what principle makes conventional bonds generally unacceptable?

Payment returns to investors (bond holders) based on interest (Riba) Riba

Payment of returns to investors (bond holders) based on profit margin after selling companies assets

Payment of returns to investors (bond holders) based on rents received on commercial properties purchased with company’s funds

Payment of returns to investors (bond holders) based on profits of business involving horse racing and casinos

3 / 15

What is the role of the religious board, the Shari’ah Supervisory Board, in Islamic banking and Islamic insurance?

To handle customer complaints

To set interest rates

To ensure that the business and operations are in keeping with Islamic principles/ruling (Shari’ah)

To manage the investments

4 / 15

Assumption of responsibility for debt repayment of another is known in Arabic as

Kafalah

Halal

Murabaha

Jihad

5 / 15

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

Profit maximisation

Charging fixed interest on loans

Placing importance on profitable investments in the alcohol and gambling industries

Risk sharing between the bank and its customers

6 / 15

What is prohibited in Islamic foreign exchange trading?

Government-regulated trading

Deferred payment or delivery involving speculation

Trading in the same currency

Spot transactions

7 / 15

Which of the following is true about Islamic banking?

It prohibits repaying a bank loan in instalments

It promotes risk-sharing between the lender (bank) and borrower (customer)

It allows speculative investments

It operates without supervision of the central bank

8 / 15

Islam upholds contractual obligation and disclosure of information as

As a model for an interest-free banking system

A sacred duty

A reason for incurring debt

An option for the parties to a contract

9 / 15

What is the Islamic perspective on economic transactions?

They should focus on maximising profit at all costs

They must be based on speculation

They should be conducted in a transparent and ethical manner

They are discouraged and should be at a minimum

10 / 15

Economics is

The interpretation of profit and loss

A generous reward on investment

The study of contracts for sale and purchase of goods

The social science that studies the production, distribution, and consumption of goods and services

11 / 15

Is Islamic banking that is based on ethical values intended for Muslims only?

For Muslims and those non-Muslims who are allowed by Shari’ah scholars

No, for all

Yes

For Muslims and those who convert to Islam

12 / 15

The Islamic financial system places greater emphasis on the

The act of worship

Moral dimensions

Social obligations

Ethical and moral dimensions

13 / 15

The Islamic economic system is a rule-based system formulated by Islamic rulings known as

Shari'ah

Shirkah

Al-Mulk

Akbar

14 / 15

The functional meaning of the Biblical Hebrew term ‘neshekh’ refers to

Reward for a good deed

Investment for a charitable cause

Interest charged on loans which is prohibited

Reward on loans given to the poor which is encouraged

15 / 15

Islam teaches that God (Allah) has sent Prophets/Messengers to humanity, in different times and places, since the

Time of Prophet Moses

The time of Adam and Eve believed in Judeo-Christian and Islamic traditions to be the first humans on earth

Time of Prophet Abraham

Beginning of time

Your score is

The average score is 64%

Have a go. Good luck.

Islamic Finance Qualifications

Institute of Islamic Banking and Insurance
Viglen House Business Centre
Office # 120, Alperton Lane
Wembley, Middlesex, HA0 1HD
United Kingdom

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