Table of Contents

Banking Multiple Choice Questions (MCQ)

Deposit accounts are a key component of the financial world. They offer individuals and businesses a safe place to store funds while earning interest or enjoying easy access to their money. Whether it’s a savings account, checking account, or a certificate of deposit (CD), understanding deposit accounts is crucial for managing personal and business finances. In this article, we’ll provide 50 MCQs with answers on deposit accounts to help you test and expand your knowledge of this essential financial topic.

MCQs on Deposit Accounts

1. What is a deposit account?

A) A loan account
B) A type of credit card
C) An account to deposit and withdraw money
D) A mortgage account
Answer: C) An account to deposit and withdraw money

2. Which of the following is NOT a type of deposit account?

A) Savings account
B) Checking account
C) Money market account
D) Credit account
Answer: D) Credit account

3. What is the primary purpose of a savings account?

A) To take loans
B) To earn interest on deposits
C) To pay bills
D) To invest in stocks
Answer: B) To earn interest on deposits

4. Which deposit account type is best suited for frequent transactions?

A) Checking account
B) Savings account
C) Fixed deposit
D) Recurring deposit
Answer: A) Checking account

5. What is a Certificate of Deposit (CD)?

A) A type of loan
B) A deposit account with a fixed term and interest rate
C) A type of credit card
D) An account with unlimited withdrawals
Answer: B) A deposit account with a fixed term and interest rate

6. Which of the following typically offers the highest interest rate?

A) Checking account
B) Savings account
C) Money market account
D) Certificate of Deposit (CD)
Answer: D) Certificate of Deposit (CD)

7. What is the minimum balance requirement?

A) The maximum amount you can deposit
B) The amount required to keep the account open
C) The interest earned per month
D) The fee charged for each transaction
Answer: B) The amount required to keep the account open

8. Which type of deposit account is generally insured by the FDIC?

A) Checking account
B) Mutual funds
C) Stock investment account
D) Forex account
Answer: A) Checking account

9. A recurring deposit account is best for…

A) Daily transactions
B) Lump sum deposits
C) Regular fixed deposits over time
D) Short-term investments
Answer: C) Regular fixed deposits over time

10. What does APY stand for in banking terms?

A) Annual Percent Yield
B) Annual Payment Yield
C) Average Payment Year
D) Asset Percent Yield
Answer: A) Annual Percent Yield

11. The Federal Deposit Insurance Corporation (FDIC) insures deposit accounts up to how much per depositor, per bank, per ownership category?

A) $100,000
B) $250,000
C) $500,000
D) $1,000,000
Answer: B) $250,000

12. Interest on a savings account is usually…

A) Simple interest
B) Compound interest
C) No interest
D) Based on stock market performance
Answer: B) Compound interest

13. Which of the following is a feature of a money market account?

A) High liquidity and higher interest rates than regular savings
B) Fixed maturity date
C) Only available to businesses
D) No interest earned
Answer: A) High liquidity and higher interest rates than regular savings

14. The term “liquidity” refers to…

A) The rate of interest on a loan
B) The amount of cash available
C) The ability to convert an asset into cash quickly
D) The amount of fees charged by the bank
Answer: C) The ability to convert an asset into cash quickly

15. Which account type typically has the least liquidity?

A) Savings account
B) Certificate of Deposit (CD)
C) Checking account
D) Money market account
Answer: B) Certificate of Deposit (CD)

16. What is a joint account?

A) An account shared by two or more people
B) A single-owner account
C) A business-only account
D) An account only for minors
Answer: A) An account shared by two or more people

17. Which of the following is true about a high-yield savings account?

A) It offers low interest rates
B) It has a fixed maturity term
C) It offers higher interest rates than regular savings accounts
D) It is only available at investment banks
Answer: C) It offers higher interest rates than regular savings accounts

18. Which type of deposit account usually charges monthly maintenance fees?

A) Checking account
B) Savings account
C) Certificate of Deposit
D) Recurring deposit
Answer: A) Checking account

19. A business account is primarily used for…

A) Personal expenses
B) Business transactions and operations
C) Foreign exchange trading
D) Stock investments
Answer: B) Business transactions and operations

20. What is overdraft protection?

A) Insurance against account hacking
B) A service that covers transactions exceeding the account balance
C) A free service provided by banks
D) A feature only for savings accounts
Answer: B) A service that covers transactions exceeding the account balance

21. Which document is typically required to open a deposit account?

A) Identification proof
B) Loan application
C) Mortgage agreement
D) Stock certificate
Answer: A) Identification proof

22. Which of these allows check writing capabilities?

A) Savings account
B) Checking account
C) Certificate of Deposit
D) Recurring deposit
Answer: B) Checking account

23. What is the main difference between a savings account and a checking account?

A) Savings accounts pay higher interest rates and have limited transactions
B) Checking accounts pay higher interest rates and have unlimited transactions
C) They are essentially the same
D) Checking accounts cannot be used for withdrawals
Answer: A) Savings accounts pay higher interest rates and have limited transactions

24. A time deposit account is also known as a…

A) Checking account
B) Certificate of Deposit (CD)
C) Savings account
D) Business account
Answer: B) Certificate of Deposit (CD)

25. Which type of account is best for an emergency fund?

A) Checking account
B) Money market account
C) Fixed deposit
D) Certificate of Deposit
Answer: B) Money market account

26. Can a minor open a deposit account?

A) Yes, with a guardian as a co-owner
B) No, it is not allowed
C) Only at certain banks
D) Only after turning 16
Answer: A) Yes, with a guardian as a co-owner

27. What is a fixed deposit account?

A) An account with no maturity term
B) An account with a fixed interest rate and term
C) An account for daily transactions
D) An account with fluctuating interest rates
Answer: B) An account with a fixed interest rate and term

28. What is the main benefit of a deposit account?

A) High loan interest
B) Safe storage and growth of funds
C) Free credit
D) Stock trading
Answer: B) Safe storage and growth of funds

29. Which account type is NOT suitable for large business transactions?

A) Checking account
B) Business account
C) Certificate of Deposit (CD)
D) Money market account
Answer: C) Certificate of Deposit (CD)

Conclusion

Deposit accounts provide a range of options for individuals and businesses to manage, store, and grow their funds. From accessible checking accounts to interest-earning savings and fixed-term CDs, understanding the nuances of each type can help make better financial decisions.

FAQs

What is the best deposit account for frequent withdrawals?
A checking account is ideal due to its high liquidity and lack of withdrawal limits.
Can I open a deposit account online?
Yes, many banks offer the option to open deposit accounts through their online platforms.
Is a certificate of deposit the same as a fixed deposit?
Yes, CDs and fixed deposits are similar, as they both have fixed terms and interest rates.
How is interest calculated on a savings account?
Most savings accounts offer compound interest, calculated daily or monthly.
Are deposit accounts safe?
Yes, most deposit accounts are FDIC-insured, which provides added security for your funds.

Islamic banking, also known as Sharia-compliant finance, is a banking system based on Islamic law (Sharia) that prohibits interest and emphasizes ethical investments. It focuses on fairness, risk-sharing, and ethical transactions. The following MCQs cover various aspects of Islamic banking, including its principles, products, structures, and differences from conventional banking.

MCQs on Islamic Banking

1. What is the primary principle of Islamic banking?

A) Interest-based income
B) Profit and loss sharing
C) Government subsidy
D) High-interest rates
Answer: B) Profit and loss sharing

2. What is Riba in Islamic finance?

A) Profit
B) Interest or usury
C) Donation
D) Asset transfer
Answer: B) Interest or usury

3. Which of the following is NOT allowed in Islamic banking?

A) Earning interest
B) Profit-sharing
C) Partnership
D) Asset leasing
Answer: A) Earning interest

4. What does Mudarabah refer to in Islamic finance?

A) A contract between partners for profit-sharing
B) A loan agreement
C) An insurance policy
D) A government bond
Answer: A) A contract between partners for profit-sharing

5. Which of these is a risk-sharing contract in Islamic finance?

A) Mudarabah
B) Conventional loan
C) Interest-bearing deposit
D) Corporate bond
Answer: A) Mudarabah

6. What is Murabaha?

A) A partnership
B) A sale with disclosed cost and profit margin
C) A charitable donation
D) A risk-free loan
Answer: B) A sale with disclosed cost and profit margin

7. Which of these is an acceptable investment under Islamic finance principles?

A) Alcohol production
B) Gambling business
C) Real estate
D) Speculative stock trading
Answer: C) Real estate

8. Islamic banks avoid which of the following?

A) Profit-sharing
B) Fixed interest rates
C) Asset-based financing
D) Business partnerships
Answer: B) Fixed interest rates

9. What does the term “Halal” mean in Islamic finance?

A) Forbidden
B) Permissible
C) Risky
D) Guaranteed
Answer: B) Permissible

10. Which of the following contracts is based on joint venture principles?

A) Musharakah
B) Mudarabah
C) Murabaha
D) Ijara
Answer: A) Musharakah

11. The Sharia principle that discourages uncertain contracts is called…

A) Gharar
B) Riba
C) Zakat
D) Ijara
Answer: A) Gharar

12. What is Takaful?

A) Islamic insurance
B) Interest-based deposit
C) Mutual fund
D) A type of bank loan
Answer: A) Islamic insurance

13. Which organization issues guidelines for Islamic finance globally?

A) International Monetary Fund
B) Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)
C) World Bank
D) United Nations
Answer: B) Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)

14. What is Sukuk in Islamic finance?

A) Islamic bond
B) Charity fund
C) Loan
D) Credit card
Answer: A) Islamic bond

15. In Islamic banking, a customer buys a property from the bank and then rents it under which type of contract?

A) Mudarabah
B) Ijara
C) Musharakah
D) Riba
Answer: B) Ijara

16. Which of these contracts resembles a leasing agreement?

A) Ijara
B) Murabaha
C) Mudarabah
D) Qard Hasan
Answer: A) Ijara

17. What is Qard Hasan in Islamic finance?

A) Interest-free loan
B) Partnership investment
C) Short-term debt
D) Speculative investment
Answer: A) Interest-free loan

18. Which of the following is a principle of Islamic finance?

A) Wealth accumulation
B) Interest maximization
C) Ethical investments
D) High-risk investments
Answer: C) Ethical investments

19. Which Islamic finance term means “partnership”?

A) Murabaha
B) Musharakah
C) Qard Hasan
D) Sukuk
Answer: B) Musharakah

20. How is profit typically distributed in a Mudarabah contract?

A) Based on a pre-agreed ratio
B) Based on bank interest rates
C) Equally divided
D) Not shared
Answer: A) Based on a pre-agreed ratio

21. Islamic banks typically invest in…

A) Interest-bearing loans
B) Ethical, Sharia-compliant assets
C) High-risk stocks
D) Lottery funds
Answer: B) Ethical, Sharia-compliant assets

22. Which financial instrument is NOT used in Islamic banking?

A) Murabaha
B) Sukuk
C) Certificate of Deposit
D) Musharakah
Answer: C) Certificate of Deposit

23. The concept of “justice” in Islamic banking emphasizes…

A) Equal profit sharing
B) Fairness and avoiding exploitation
C) Maximizing interest
D) Restricting investments
Answer: B) Fairness and avoiding exploitation

24. Which of the following activities is considered Haram in Islamic finance?

A) Risk-sharing contracts
B) Leasing agreements
C) Interest-bearing loans
D) Profit-sharing investments
Answer: C) Interest-bearing loans

25. An Islamic bank’s primary role is to…

A) Charge interest
B) Facilitate trade and commerce through Sharia-compliant contracts
C) Offer high-interest savings
D) Conduct high-risk investments
Answer: B) Facilitate trade and commerce through Sharia-compliant contracts

26. What is Istisna in Islamic finance?

A) Partnership contract
B) Manufacturing or construction contract
C) Fixed interest loan
D) Investment in stocks
Answer: B) Manufacturing or construction contract

27. Which principle of Islamic finance prohibits excessive uncertainty in contracts?

A) Mudarabah
B) Gharar
C) Musharakah
D) Sukuk
Answer: B) Gharar

28. What is Wakalah in Islamic banking?

A) A type of partnership
B) An agency contract where one party acts on behalf of another
C) A loan agreement
D) A profit-sharing agreement
Answer: B) An agency contract where one party acts on behalf of another

29. Islamic banks generate revenue mainly through…

A) Fixed interest rates
B) Trade and lease-based income
C) High-risk investments
D) Government subsidies
Answer: B) Trade and lease-based income

30. What is Bai’ al Salam?

A) A forward contract where the buyer pays in advance for future delivery
B) An interest-based loan
C) A type of insurance
D) A mortgage
Answer: A) A forward contract where the buyer pays in advance for future delivery

31. In Islamic finance, what is meant by “Tawarruq”?

A) A charity donation
B) A loan taken by selling and repurchasing an asset
C) A government bond
D) A partnership
Answer: B) A loan taken by selling and repurchasing an asset

32. Who monitors the Sharia compliance of Islamic financial institutions?

A) Sharia Supervisory Board
B) Federal Reserve
C) IMF
D) Corporate Board of Directors
Answer: A) Sharia Supervisory Board

33. Which of the following is true about Mudarabah?

A) The investor has unlimited liability
B) The investor provides capital, and the entrepreneur provides expertise
C) Both partners contribute capital
D) It involves a fixed interest rate
Answer: B) The investor provides capital, and the entrepreneur provides expertise

34. What is the main feature of a Sukuk bond?

A) It provides ownership in a specific asset
B) It is an interest-bearing bond
C) It is a high-risk investment
D) It is a speculative instrument
Answer: A) It provides ownership in a specific asset

35. Which concept in Islamic finance requires that investments avoid prohibited (Haram) industries?

A) Halal investing
B) Riba
C) Tawarruq
D) Gharar
Answer: A) Halal investing

36. In Islamic banking, profit earned must be…

A) Pre-determined
B) Based on actual performance and risk-sharing
C) Based on a fixed interest rate
D) Guaranteed
Answer: B) Based on actual performance and risk-sharing

37. What does Sharia prohibit in Islamic banking transactions?

A) Ownership of assets
B) Payment of interest (Riba)
C) Leasing of assets
D) Risk-sharing
Answer: B) Payment of interest (Riba)

38. What is the purpose of Zakat in Islamic finance?

A) Income generation
B) Charitable giving to promote social welfare
C) Interest generation
D) Currency exchange
Answer: B) Charitable giving to promote social welfare

39. Which of the following is NOT a key objective of Islamic finance?

A) Social justice
B) Profit maximization without restrictions
C) Ethical investment
D) Prohibition of Riba
Answer: B) Profit maximization without restrictions

40. In a Musharakah agreement, what is shared between partners?

A) Only profits
B) Only losses
C) Both profits and losses
D) Only capital
Answer: C) Both profits and losses

41. What is the difference between conventional bonds and Sukuk?

A) Sukuk does not pay any returns
B) Sukuk represents partial ownership in an asset
C) Conventional bonds are Sharia-compliant
D) Sukuk is a type of equity
Answer: B) Sukuk represents partial ownership in an asset

42. Islamic banks may finance housing through which structure?

A) Ijara or Diminishing Musharakah
B) Fixed interest loan
C) Mortgage
D) Credit card facility
Answer: A) Ijara or Diminishing Musharakah

43. Which of the following describes Gharar in Islamic finance?

A) Trading with full information and transparency
B) Uncertainty or ambiguity in contracts
C) Sharing profits and losses
D) Avoiding unethical investments
Answer: B) Uncertainty or ambiguity in contracts

44. What does Sharia compliance mean in Islamic banking?

A) Aligning with secular financial regulations
B) Complying with Islamic law in financial activities
C) Following international banking standards
D) Paying taxes on profits
Answer: B) Complying with Islamic law in financial activities

45. Who assumes the operational risk in a Mudarabah contract?

A) The bank only
B) The investor only
C) Both bank and investor
D) Only the entrepreneur
Answer: D) Only the entrepreneur

46. In Islamic banking, what is meant by Hibah?

A) Charitable donation
B) Interest payment
C) Free gift or goodwill gesture
D) Joint investment
Answer: C) Free gift or goodwill gesture

47. Islamic banks cannot invest in…

A) Government bonds
B) Interest-bearing securities
C) Real estate
D) Equity in compliant companies
Answer: B) Interest-bearing securities

48. Which Islamic finance structure is used for trade financing?

A) Murabaha
B) Mudarabah
C) Musharakah
D) Sukuk
Answer: A) Murabaha

49. Islamic finance promotes the principle of…

A) Wealth accumulation without limits
B) Wealth distribution and social equity
C) High-risk investment
D) Speculative trading
Answer: B) Wealth distribution and social equity

50. Which of the following is a Sharia-compliant investment in the stock market?

A) Companies that deal in alcohol
B) Gambling enterprises
C) Islamic banks and Halal-certified businesses
D) High-risk derivatives
Answer: C) Islamic banks and Halal-certified businesses

51. Which Islamic finance concept is based on risk-free returns?

A) Musharakah
B) Murabaha
C) Riba
D) Sukuk
Answer: B) Murabaha

52. In Ijara, who owns the asset during the lease term?

A) The lessee
B) The bank or lessor
C) Joint ownership
D) Government
Answer: B) The bank or lessor

53. What does “Halal” signify in investments?

A) Prohibited activities
B) Permissible or lawful activities
C) Risky investments
D) Interest-based returns
Answer: B) Permissible or lawful activities

54. What is “Maysir” in Islamic finance?

A) Gambling or speculative transactions
B) Profit-sharing contracts
C) Islamic bonds
D) Joint ventures
Answer: A) Gambling or speculative transactions

55. Which of the following is an example of an ethical investment in Islamic banking?

A) Casino businesses
B) Renewable energy projects
C) Tobacco companies
D) High-interest loans
Answer: B) Renewable energy projects

56. The prohibition of interest in Islamic finance primarily promotes…

A) Speculative investment
B) Economic justice and fairness
C) High returns on capital
D) Risk-free investments
Answer: B) Economic justice and fairness

57. Islamic banks offer Takaful as an alternative to…

A) Traditional insurance
B) High-risk investments
C) Stock options
D) Fixed deposits
Answer: A) Traditional insurance

58. Which of the following products would NOT exist in an Islamic bank?

A) Riba-based savings account
B) Mudarabah-based savings account
C) Sukuk bonds
D) Ijara leasing
Answer: A) Riba-based savings account

59. An investment in a non-Sharia compliant sector is considered…

A) Gharar
B) Halal
C) Haram
D) Hibah
Answer: C) Haram

60. The principle of avoiding exploitation and injustice in financial transactions is referred to as…

A) Wakalah
B) Takaful
C) Adl (justice)
D) Gharar
Answer: C) Adl (justice)

61. What is the primary goal of Takaful in Islamic finance?

A) Profit maximization
B) Community-based risk sharing
C) Interest generation
D) Stock market investment
Answer: B) Community-based risk sharing

62. In Islamic banking, what is Diminishing Musharakah?

A) A form of loan agreement
B) A declining partnership where one party gradually buys out the other
C) A charity-based fund
D) A fixed interest contract
Answer: B) A declining partnership where one party gradually buys out the other

63. Which of the following describes Bay al-Inah?

A) Lease agreement
B) Sale and buy-back arrangement
C) Partnership investment
D) Islamic insurance
Answer: B) Sale and buy-back arrangement

64. Which term in Islamic finance is synonymous with “speculation”?

A) Takaful
B) Maysir
C) Murabaha
D) Waqf
Answer: B) Maysir

65. In Islamic finance, the concept of “Waqf” refers to…

A) Endowment for charitable purposes
B) Interest-based loans
C) Trade finance
D) Profit-sharing contract
Answer: A) Endowment for charitable purposes

66. Which contract involves an asset purchased by the bank and sold to the customer with a profit margin?

A) Musharakah
B) Murabaha
C) Ijara
D) Takaful
Answer: B) Murabaha

67. What is one major difference between Takaful and conventional insurance?

A) Takaful operates on risk pooling, not risk transfer
B) Takaful offers higher returns
C) Takaful is based on interest
D) Takaful guarantees profits
Answer: A) Takaful operates on risk pooling, not risk transfer

68. Which Islamic finance concept allows for pre-payment in a sale for future goods delivery?

A) Istisna
B) Salam
C) Qard Hasan
D) Ijara
Answer: B) Salam

69. Under Mudarabah, if a loss occurs, who bears it?

A) The entrepreneur
B) Both parties equally
C) The investor
D) The bank only
Answer: C) The investor

70. Which Islamic finance principle emphasizes fairness and equitable distribution of wealth?

A) Zakat
B) Riba
C) Maysir
D) Gharar
Answer: A) Zakat

71. What is “Gharar” often associated with in Islamic finance?

A) Transparency
B) Uncertainty or ambiguity
C) High profit
D) Charity
Answer: B) Uncertainty or ambiguity

72. What is the role of the Sharia Supervisory Board in Islamic banks?

A) To set interest rates
B) To monitor compliance with Sharia law
C) To provide loans
D) To regulate the stock market
Answer: B) To monitor compliance with Sharia law

73. Which Islamic banking principle prohibits investments in certain industries like alcohol and gambling?

A) Mudarabah
B) Takaful
C) Haram investment restriction
D) Sukuk
Answer: C) Haram investment restriction

74. In Islamic finance, an agreement where the bank buys goods on behalf of a client and sells them at a profit is called…

A) Murabaha
B) Musharakah
C) Gharar
D) Sukuk
Answer: A) Murabaha

75. How is income typically generated in a Sukuk?

A) Through fixed interest payments
B) By asset-based revenue or lease rentals
C) By speculation in high-risk assets
D) By charity
Answer: B) By asset-based revenue or lease rentals

76. What is the Islamic banking stance on debt?

A) It allows high-interest loans
B) It encourages interest-free or profit-sharing arrangements
C) It promotes speculative investments
D) It prohibits all forms of debt
Answer: B) It encourages interest-free or profit-sharing arrangements

77. An Islamic financial institution should avoid…

A) Speculative transactions and gambling
B) Profit-sharing contracts
C) Asset-backed securities
D) Investments in real estate
Answer: A) Speculative transactions and gambling

78. Islamic banks often promote which of the following for home financing?

A) Fixed-rate mortgages
B) Mudarabah investments
C) Ijara and Diminishing Musharakah
D) High-interest loans
Answer: C) Ijara and Diminishing Musharakah

79. What is one main difference between Islamic and conventional banking?

A) Islamic banks do not charge interest
B) Islamic banks offer higher profits
C) Islamic banks are solely for Muslims
D) Islamic banks do not offer savings accounts
Answer: A) Islamic banks do not charge interest

80. In Islamic finance, an arrangement for leasing is referred to as…

A) Sukuk
B) Ijara
C) Mudarabah
D) Waqf
Answer: B) Ijara

81. Which of the following is discouraged in Islamic banking?

A) Asset-backed lending
B) Interest-bearing loans
C) Profit-sharing contracts
D) Partnership investments
Answer: B) Interest-bearing loans

82. Which of these best describes the purpose of Sukuk?

A) To invest in high-risk stocks
B) To provide interest-bearing loans
C) To raise funds for Sharia-compliant projects
D) To finance gambling enterprises
Answer: C) To raise funds for Sharia-compliant projects

83. What is Musharakah primarily used for?

A) Fixed interest loans
B) Profit and loss sharing investments
C) Short-term loans
D) Unethical investments
Answer: B) Profit and loss sharing investments

84. Islamic banks are required to contribute a percentage of their profits to…

A) Interest reserves
B) Government funds
C) Zakat (charity)
D) Stock market investments
Answer: C) Zakat (charity)

85. Which of the following products is unique to Islamic banking?

A) Savings account
B) Fixed deposit
C) Qard Hasan (interest-free loan)
D) Mortgage
Answer: C) Qard Hasan (interest-free loan)

86. Which principle prevents excessive uncertainty in Islamic financial contracts?

A) Ijara
B) Gharar
C) Mudarabah
D) Riba
Answer: B) Gharar

87. What is the primary difference between Takaful and conventional insurance?

A) Takaful operates on mutual cooperation rather than profit maximization
B) Takaful guarantees interest
C) Takaful policies are more expensive
D) Takaful allows speculative risk
Answer: A) Takaful operates on mutual cooperation rather than profit maximization

88. Which of the following is a core value in Islamic banking?

A) Economic fairness and justice
B) Unlimited profit-taking
C) Unethical investments
D) Interest maximization
Answer: A) Economic fairness and justice

89. Which of the following contracts is considered Halal in Islamic banking?

A) Lottery investment
B) Murabaha
C) Interest-bearing loan
D) Speculative stocks
Answer: B) Murabaha

90. What does a Musharakah agreement typically involve?

A) A partnership with profit and loss sharing
B) A loan with fixed interest
C) A risk-free investment
D) An agreement based on charity
Answer: A) A partnership with profit and loss sharing

91. The principle of “no pain, no gain” in Islamic finance is related to…

A) Riba
B) Gharar
C) Profit and loss sharing
D) Maysir
Answer: C) Profit and loss sharing

92. Which contract is typically used in Islamic home financing?

A) Qard Hasan
B) Ijara
C) Short-term loan
D) Credit card
Answer: B) Ijara

93. Islamic banking encourages which of the following?

A) Speculative investments
B) High-risk trading
C) Social responsibility
D) Fixed income bonds
Answer: C) Social responsibility

94. The prohibition of Riba in Islamic banking promotes…

A) Fair and ethical trading
B) High-interest loans
C) Wealth accumulation at all costs
D) Risk-free investments
Answer: A) Fair and ethical trading

95. In Islamic banking, a loan given without interest is called…

A) Qard Hasan
B) Mudarabah
C) Riba
D) Sukuk
Answer: A) Qard Hasan

96. Islamic banks operate on principles of…

A) Fixed interest rates
B) Equity and ethical values
C) High-risk loans
D) Profit maximization without limitations
Answer: B) Equity and ethical values

97. Which of these is an acceptable industry for Islamic investment?

A) Alcohol production
B) Renewable energy
C) Gambling
D) Conventional banks
Answer: B) Renewable energy

98. In Islamic finance, Zakat helps promote…

A) Wealth redistribution for social welfare
B) Fixed interest income
C) High-risk investments
D) Speculative trading
Answer: A) Wealth redistribution for social welfare

99. Which of these transactions is avoided in Islamic finance due to its speculative nature?

A) Real estate purchase
B) Maysir (gambling)
C) Equipment leasing
D) Trade financing
Answer: B) Maysir (gambling)

100. Islamic finance prohibits business transactions that involve…

A) Sharing profits
B) Speculation, interest, and unethical industries
C) Risk and reward sharing
D) Social responsibility
Answer: B) Speculation, interest, and unethical industries