TEST BANK FOR ISLAMIC BANKING AND FINANCE PRINCIPLES AND PRACTICE
True / False Questions
1. The resolution of Islamic Fiqh Academy is considered one of the main
sources of Al Sharī‘ah (Islamic law) that constitute the basis of Islamic
banking and finance
Answer: True
Diff: 2
Page...
ISLAMIC BANKING AND
FINANCE PRINCIPLES
AND PRACTICE
, lOMoARcPSD|18222662
Chapter – 1
ISLAMIC BANKING AND FINANCE:
PRINCIPLES AND PRACTICE
______________________________________________________
True / False Questions
1. The resolution of Islamic Fiqh Academy is considered one of the main
sources of Al Sharī‘ah (Islamic law) that constitute the basis of Islamic
banking and finance
Answer: True
Diff: 2
Page Ref: 4
LO: 1
2. Any form of banking and financial institution that is consistent with the
principles of the Sharī‘ah can be referred to as Islamic bank or financial
institution.
Answer: True
Diff: 1
Page Ref.: 5
LO: 1
3. There are basically two types of riba—riba al-nasi’ah, which is the
interest on lent money, and riba al-fadl, the exchange of superior goods
with more inferior ones.
Answer: True
, lOMoARcPSD|18222662
Diff: 1
Page Ref: 6
LO: 1
4. The form of riba prohibited in the Qur’an is riba al-fadl, the exchange
of superior goods with more inferior ones.
Answer: False
Diff: 1
Page Ref.: 6
LO: 1
5. While riba al-nasi’ah relates to trade, riba al-fadl relates to loans.
Answer: False
Diff: 2
Page Ref.: 6
LO: 1
6. Within the modern context, the interest element in banking and finance
is replaced with profit-sharing through certain Islamic financial products
such as mudarabah and musharakah.
Answer: True
Diff: 2
Page Ref: 8
LO:1
7. Any form of interest-free banking based on ethical ideals of financial
transactions will be recognized as Sharī‘ah -compliant.
Answer: True
Diff: 1
Page Ref: 8
LO: 1
8. The existing mediums of exchange (currencies) during the advent of
Islam in the Arab region were the dinar (Gold) and dirham (Silver).
Answer: True
Diff: 1
, lOMoARcPSD|18222662
Page Ref: 10
LO: 2
9. While the gold dinar was the Persian currency, the silver dirham was the
currency of the Roman Empire.
Answer: False
Diff: 2
Page Ref: 10
LO: 2
10. Among the prohibited transactions which were common during the
prophet's era include excessive risk or speculation.
Answer: True
Diff: 1
Page Ref: 11
LO: 2
11. The significance of zakat is largely attributed to its effectiveness as a
distributive tool in the process of wealth circulation and social security.
Answer: True
Diff: 2
Page Ref: 12
LO: 2
12. The first Muslim coins were struck during the Caliphate of Umar, which
ushered in a new economic regime in the Islamic state.
Answer: False
Diff: 1
Page Ref: 12
LO: 2
13. The first Caliph, Abu Bakr, was the first to introduce a centralized and
permanent bait al-mal which is simply known as the Treasury House.
Answer: False
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