MCQs on Islamic Banking and Finance

1. What is the fundamental principle of Islamic banking?
(A) Maximizing profit at any cost
(B) Charging high interest rates
(C) Prohibition of interest (Riba)
(D) Government subsidies

2. Which Islamic finance concept involves joint venture or partnership?
(A) Mudarabah
(B) Ijarah
(C) Murabaha
(D) Sukuk

3. What is the Islamic alternative to interest-based loans?
(A) Speculation
(B) Riba
(C) Profit and loss sharing
(D) Lottery

4. What does the term Murabaha refer to in Islamic finance?
(A) Leasing of assets
(B) Sale with disclosed cost and profit
(C) Donation
(D) Interest-based loan

5. Which financial certificate is compliant with Shariah and similar to bonds?
(A) Shares
(B) Sukuk
(C) T-bills
(D) Loans

6. Which of the following is strictly prohibited in Islamic banking?
(A) Business investments
(B) Profit sharing
(C) Riba (Interest)
(D) Risk management

7. What is Ijarah in Islamic finance?
(A) Interest-free loan
(B) Leasing agreement
(C) Investment in stocks
(D) Zakat collection

8. Who ensures Shariah compliance in an Islamic financial institution?
(A) Government regulators
(B) Internal auditors
(C) Shariah Supervisory Board
(D) Bank manager

9. In Islamic banking, risk is supposed to be:
(A) Eliminated completely
(B) Borne by the weaker party
(C) Avoided at all costs
(D) Shared between parties

10. Which of the following is not a feature of Islamic banking?
(A) Speculation and gambling
(B) Risk sharing
(C) Asset-backed financing
(D) Ethical investments