Questions and Answer : Islamic Banking and Finance

Questions and Answer : Islamic Banking and Finance  10 Questions

1. The first ever Islamic financial institution established in the 1960s outside the MENA region is:
A Mit Ghamr Savings Bank B Bank Islam Malaysia
C Tabung Hajj Malaysia D Dubai Islamic Bank

2. Which of the following are not included as activities or services that the Islamic
Development Bank do?
A Contribute in the establishment of supporting infrastructure organizations for the Islam banking and finance industry
B Provide multilateral finance and commercial banking services for the public in order to enhance product development in Islamic banking
C Provide adequate aid when natural disaster or a calamity has affected the member countries
D Assist member countries in the development of their infrastructure when called upon through interest free loans

3. Knowledge and understanding of practical Shariáh laws derived from particulars of supporting evidence is the definition of:
A Shariáh B No correct answer
C Usul Al Fiqh D Fiqh

4. The actions, words, behavior, or tacit approval of the Prophet Muhammad SAW is considered to be the
A Ijma’ B Sunnah
C Qiyas D Quran

5. An Islamic bank should not promote and advertise their debt products to the general public too aggressively and make people adore the debt culture even more. If this is still done it means that the Islamic banks is not putting effort in achieving one of the objectives of the Shariah (maqasid al Shariah) which is specifically:
A No correct answer B To protect public interest
C To educate people D To achieve justice

6. Riba which is related to the exchange of certain type of goods/commodities that involve different counter value and or deferred delivery is:
A Riba Al Nasi’ah B Riba Al Duyun
C Riba Al Jahiliyyah D Riba Al Fadl

7. In Murabahah financing, when an orderer is asked to pay a certain amount of money in advanced to the seller in order to show seriousness towards the transaction that can later be refunded upon certain conditions, the contract used is called:
A Down payment B Hamish Jiddiyyah
C All options are correct D Arboun

8. The contract in Islamic banking that is related to the agricultural goods is:
A Musharakah B Istisna’
C Salam D Ijarah

9. Savings and Investment accounts offered by Islamic banks such as the case of BISB and KFH utilize the contracts below, except:
A Wakalah B Ijarah
C Mudharabah Mutlaqah D Mudharabah Muqayyadah

10. Which of the following is not considered to be one of the necessary conditions of Mudharabah?
A The capital provided cannot pay a periodical salary to the mudharib
B Sub-Mudharabah is not allowed without the permission of the capital provider
C Profit is to be shared according to the profit sharing ratio determined at the inception of the contract
D Loss is to be borne by the capital provider in all cases, even if it is due to the negligence of the mudharib

11. The follow Islamic nominate contract that would be the most suitable for asset financing would be:
A Salam B Wakalah
C Muzara’ah D Murabahah

12. Which Islamic finance infrastructure organization handles ratings of sukuk and Shari’ah governance quality?

13. Which of the follow contract is not agreed upon by Islamic scholars globally to be Shari’ah compliant?
A Murabahah B Tawarruq
C Bay Al Inah D Murabahah Financing

14. Which is not included is one of the requirement elements of Riba Al Nasi’ah?
A It needs be involve cash or it’s equivalent e.g. gold and silver
B It needs to be in a loan contract
C It needs to be stipulated D It needs to include a surplus or excess

15. AAOIFI is considered to be what level of authority of interpretation?
A Global level B Institutional level
C Islamic finance industry level D Traditional level

16. Below are included as AAOIFI standards, except:
A AAOIFI Auditing Standards for Islamic Financial Institutions
B AAOIFI Shari’ah Standards
C AAOIFI Code of Ethics for Islamic Banking Employees
D AAOIFI Corporate Governance Standards

17. An initial payment that is paid to the Islamic bank to show that the customer is committed and serious with the transaction is called:
A Down payment B Wakalah
C Hamish Jiddiyah D Arboun

18. When someone plays with the supply of an important resource in order to create scarcity and benefit from it by selling the resource at an exorbitant price, this is considered as:
A Riba B Maysir
C Gharar D Ihtikar

19. Which of the following is not included as one of the classification of sectors of the global Islamic economy?
A The Islamic finance industry B Muslim-friendly travel
C The halal pharmaceutical industry
D All of the above are a classification of the global Islamic economy

20. One of the core drivers of the Islamic economy that ensure sustainability of it’s growth is:
A The rise of ethical consumerism
B Slowing growth of Muslim demographics / population
C Decay in religious affinity
D Tremendous growth in terms of regulations and global benchmarks

21. One of the lessons we can take from the war strategies of the Prophet PBUH that can be implemented in management is the importance of environment analysis, as can be seen in:
A The battle of Uhud B The battle of Khaybar
C The battle of Badr D The battle of Khandaq

22. The pivotal difference between strategic management from an Islamic perspective with its conventional counterpart is mainly in the stage of:
A Identifying the organizations values, vision, and mission
B Formulation of strategies
C It is all completely the same D SWOT Analysis

23. The main difference between Sukuk and conventional bonds is:
A All of the available answers are correct differences of Sukuk and bonds
B Sukuk is always has an underlying asset, whether asset backed or asset based
C Investors of sukuk do not get coupon interest and instead get profit or rent depending on the underlying contract
D Sukuk is based on underlying Islamic nominate contracts that are available in Islamic commercial jurisprudence

24. The Central Bank of Bahrain issued the first sovereign sukuk globally called:
A The Bahrain Bonds B The CBB Treasury Bills
C The CBB Sukuk Al Musharakah D The CBB Sukuk Al Salam and Al Ijarah

25. Which AAOIFI Standard discusses about Sukuk?
A AAOIFI Shariah Standard No 17 B AAOIFI Shariah Standard No 18
C AAOIFI Shariah Standard No 20 D AAOIFI Shariah Standard No 19

26. The following are the features that are unique to Takaful as compared to the conventional insurance:
A Takaful is based on solely commercial factors
B Takaful is free from Riba but not from Gharar and Maysir
C Takaful companies are subject to the Shariah Supervisory Board but not to the governing law
D There is a full segregation between the participant’s Takaful fund account and the shareholder’s account

27. In the past, members make annual contributions in a fund and a Dyah or blood money will be paid on behalf of the fund member who is liable to pay. This principle that is used in Takaful is called the principle of:
A Aqilah B Kafalah
C Qasamah D None of the provided answers are correct

Answer Key

1. c 2. b 3. d 4. b
5. c 6. d 7. b 8. c
9. b 10. d 11. d 12. d 13. c 14. a
15. c 16. d 17. c 18. d 19. d 20. a 21. c 22. a
23. a 24. d 25. a 26. d
27. a


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