1. In Murabaha, which sort of guarantee can be taken?

a) Self-guarantee to fulfil contract stipulations

b) Third party guarantee
c) Both a and b
d) None of the above.
2. In Ijarah, which sort of guarantee can be taken?
a) Self-guarantee to fulfil contract stipulations
b) Third party guarantee
c) Both a and b
d) None of the above
3. If depositors want capital protection, which mode can be used to accept their deposits?
a) Mudarabah
b) Musharakah
c) Amanah or Qard
d) None of the above
4. If a financial institution is willing to provide capital protection, but also wants to use the funds
deposited by customer, which mode is then used?
a) Mudarabah
b) Musharakah
c) Amanah
d) Qard
5. The type of lease in which the asset is eventually owned by Lessee is known as:
a) Operating Lease
b) Finance Lease
c) Both a and b
d) None of the above
6. Finance lease counterpart or alternative in Islamic Finance is:
a) Ijarah Thumma Bai
b) Ijarah-Bi-Tamleek
c) Both a and b
d) None of the above
7. Securitization is possible in:
a) Murabaha
 b) Ijarah
c) Both a and b
d) None of the above
8. In Ijarah, the rental can be:
a) Fixed
b) Floating
c) Combination of both
d) All of the above
9. In Ijarah, with regards to rent, which condition must always be fulfiled?
a) Rent must be stipulated for all periods
b) Rent must be stipulated for no period
c) Rent must be stipulated for first period at least
d) None of the above.
10. The type of lease in which same asset owned by a client is subsequently leased to the client is known
as:
a) Forward lease
b) Mortgage
c) Sale and Leaseback
d) None of the above
11. Which of the following lease is also known as “Capital Lease”?
a) Finance Lease
b) Operating Lease
c) Forward Lease
d) None of the above
12. Ijarah can be executed for a non-existing asset?
a) Yes.
b) No
c) Yes, but subsequently. Initially, undertaking to lease is signed
d) None of the above
13. Can bank make Lessee the agent?
a) Yes
b) No
c) Yes, but it will be a distinct relationship & client will be paid agency fee
 d) None of the above
14. When is title of the asset transferred in Ijarah to the client?
a) At the start of lease
b) At the end of lease automatically
c) At the end of lease if client purchases and bank sells the asset to client
d) None of the above
15. In sale and lease back, which is not allowed?
a) Charging rents
b) Sale and lease to same client
c) No time gap and asset condition between sale and lease
d) None of the above
16. If Ijarah is used in offering credit card facility, what is the condition(s) that is to be fulfilled about
the subject matter?
a) Asset owned by bank
b) Asset must be usable not consumable
c) Asset exists at the time of entering into lease
d) All of the above.
17. Ijarah Sukuk can be used for:
a) Syndicate finance needs
b) Cleaning the balance sheet
c) Both a and b
d) None of the above
18. Security deposit taken from the client is regarded as:
a) Hamish Jiddiyah
b) Seed capital
c) Mark-up
d) None of the above.
19. If the leased asset becomes unusable and the repair time takes 3 months, what will be the ruling
about rentals for these 3 months?
a) No rentals charged
b) Rentals booked, but paid later
c) Rentals booked and charged on normal basis
d) None of the above.
20. Who has the title of the asset in Ijarah lease until it ends?
 a) Bank
b) Client
c) Both
d) None of the above.
21. Who bears the ownership related costs in Ijarah lease?
a) Bank
b) Client
c) Both
d) None of the above
22. What is the ruling about prepayment in Ijarah?
a) Allowed with no prior stipulation of reduction in dues to the bank
b) No allowed
c) Allowed with prior stipulation of reduction in dues to the bank
d) None of the above
23. Which type of costs can be included in presenting rental schedule to client?
a) Asset related
b) Documentation related
c) Regulatory levies related
d) All of the above
24. If the Ijarah asset owned by Sukuk holders is destroyed due in normal circumstances, who will bear
the loss?
a) Lessee
b) Special Purpose Vehicle
c) Sukuk Holder
d) None of the above
25. If Ijarah rentals are not received from the Lessee, will the Sukuk holders be paid by the SPV?
a) Yes
b) No
c) None of the above
26. What is the most widely used Islamic mode of financing in asset side operations of Islamic banks?
a) Murabaha
b) Ijarah
c) Salam
 d) Diminishing Musharakah
27. In which contract of Islamic modes of financing, it is mandatory to disclose the cost to the client?
a) Murabaha
b) Musawamah
c) Ijarah
d) None of the above
28. Murabaha selling price equals
a) Cost Price
b) Cost Price + Profit
c) Principal Amount + Interest.
d) None of the above
29. In Murabaha, the amount over the cost price is called
a) Interest
b) Usury
c) Riba
d) Profit on sale
30. In Murabaha, before declaration it is necessary:
a) Not to consume the asset
b) To pay the bank Murabaha price
c) For bank to take physical possession
d) None of the above
31. Possession of the goods is necessary before sale. Possession can be:
a) Real
b) Constructive
c) Both a and b
d) None of the above
32. Murabaha price can include costs like:
a) Asset related costs
b) Documentary costs
c) Regulatory levies
d) All of the above
33. For Murabaha transaction to be Shari‟ah compliant, which benchmark can be used?
a) Spot Market Benchmark
 b) General Banking Benchmark
c) Islamic Benchmark
d) Any of the above
34. Islamic rules of sale require for the seller to have:
a) Ownership
b) Possession
c) Either a or b
d) Both a and b
35. Murabaha financing can be used for which type of assets?
a) Consumable raw materials
b) Non-consumable movable fixed assets
c) Immovable fixed assets
d) All of the above.
36. Which of the following will make Murabaha invalid?
a) Price not agreed
b) Price not fully paid
c) Supplier not paid directly by bank
d) None of the above.
37. Which of the following will make Murabaha invalid?
a) Goods consumed before declaration
b) Price agreed but not paid on spot
c) Including mark-up over cost price
d) None of the above
38. In Murabaha, the payment can be:
a) Spot
b) Deferred
c) Both a and b together
d) Any of the above
39. If late payment penalty is taken from client, it is:
a) Taken to P&L
b) Paid to Charity immediately
c) Taken to Charity A/C & paid from time to time
d) Both b and c
40. Price Rs 1,000 for 1 year deferred payment & Rs 2,000 for 2 year. Which of the following is valid in
Murabaha?
a) Client agrees to one of the two
b) Client agrees to none
c) Price schedule can not involve time variant price
d) None of the above
41. Bank can appoint client as Agent. Is it:
a) True with and without agency fee
b) False
c) True without agency fee only
d) None of the above
42. In Import Murabaha, usually the bank is the:
a) Buyer of foreign exporter; seller to local client
b) Buyer of local client; seller to exporter
c) Just an agent for client
d) None of the above
43. Which of the following is not allowed in Murabaha?
a) Automatic Rollover of loans
b) Re-pricing of asset after sale
c) Penalty on late payments
d) None of the above
44. What is the limitation of Murabaha financing?
a) Murabaha receivables cannot be securitized
b) Murabaha is expensive
c) Murabaha is difficult to apply
d) None of the above
45. In Salam,
a) Delivery is deferred, payment is spot
b) Payment is deferred, delivery is spot
c) Both are spot
d) Both are deferred
46. Salam is an exceptional sale along with:
a) Murabaha
 b) Musawamah
c) Istisna
d) None of the above
47. Why Salam is considered exceptional sale?
a) Sale executed without existence of asset
b) Asset exist but not delivered
c) Both payment and delivery is deferred
d) None of the above
48. Salam can be used in:
a) Agriculture finance
b) Currency hedging
c) Both and b
d) None of the above
49. In Salam, it is mandatory that the:
a) Goods are clearly specified
b) Goods exist in market from the date of contract to date of delivery
c) Payment is spot
d) All of the above
50. Parallel Salam cannot be done:
a) For same date of delivery of Salam
b) For same amount of Salam
c) With same client
d) None of the above
51. If Salam contract is not fulfilled, parallel Salam will:
a) Be invalid
b) Still have to be fulfilled
c) Delayed till Salam contract is fulfilled
d) None of the above
52. Salam used in currency hedging cannot usually be done in:
a) Different currencies
b) Same currency in deferred transactions
c) All Deferred transactions
d) None of the above
53. Which of the following statements about Murabahah financing is incorrect?
a) The cost of purchase should not be disclosed to the customer
b) The financing amount cannot be secured by collateral or guarantee
c) The mode of payment for the purchase can be by installments or a single payment
d) None of the above
54. In principle, an Ijara contract is extended for an asset _____ by the Lessor.
a) Owned
b) Possessed
c) Both a and b
d) None of the above
55. In which of the following conditions, Ijarah cannot be executed.
a) Asset not existing
b) Asset exists not owned or possessed by Lessor
c) Asset is not a newly produced one
d) Both a and b
56. Security deposit may be taken at the time of promise made by the lessee to obtain an asset from
the institution on lease. It could be regarded as:
a) Not refundable
b) Amanah
c) As application fee
d) None of the above
57. If the Lessor fails to deliver the asset to the Lessee on the date specified in the Ijarah contract, what
will be the ruling about rentals for the period in which asset was not delivered from the time of
signing lease contract?
a) No rentals charged
b) Rentals booked but can be paid later
c) Half of rental will be charged
d) None of the above
58. Riba covers not only usury but
a) Any amount over principal amount in credit transaction of money or goods
b) Any mark-up in credit sale of goods
c) Receiving any share of profit
d) None of the above
59. The following is a type of investing instrument
 a) Kafalah
b) Takaful
c) Musharakah
d) None of the above
60. Under a Salam contract, goods are
a) Not delivered until payment is made
b) Purchased for delivery in future
c) Delivered for payment later
d) None of the above
61. “The bank accepts deposits from customers who are looking for investment opportunities for their
funds. Under this principle, the bank provides the entrepreneurship and the customer acts as the
capital provider. All profits are shared in accordance with the pre-agreed profit-sharing ratio. Losses,
if any, are borne entirely by the capital provider – i.e. the depositor”. The above principle relates
to:
a) Al Wadiah Yad Dhamanah
b) Al Mudarabah
c) Al Murabahah
d) Al Musharakah
62. The term "Murabahah" is used to describe a sale at a specified mark up over the cost incurred by
the seller in acquiring the item that is for sale. What term is used to describe sales in which the
seller's cost is not specified to the buyer?
a) Muzabanah
b) Musawamah
c) Mudarabah
d) Muqaradah
e) Muzayadah
63. Which of the following transactions displays riba al-nasia?
a) an exchange of good quality for bad quality dates
b) an immediate exchange of unequal amounts of copper
c) an immediate exchange of unequal amounts of gold
d) calling in a loan when the borrower is in difficulty
e) exchange of a $100 note now for ten $10 notes later.
64. A nut seller offers a large sack of unshelled nuts for sale to a buyer in return for cash on the spot.
The buyer suggests that the seller is engaging in gharar, since some of the nuts may be rotten inside.
The seller cracks a few nuts from the sack at random and all are in good condition. Nevertheless,
 the buyer still objects, saying that the proposed sale involves gharar and is therefore invalid under
Islamic law. Is he right in this statement?
a) yes, because uncertainty remains as to the other nuts
b) no, because gharar does not apply to spot sales
c) no, because the uncertainty involved here is minor
d) no, because uncertainty does not apply to sales of food
e) we cannot know for sure until all nuts have been shelled
65. Customer A invests RM 1,000 in an Islamic bank that receives deposits on Mudarabah basis. Can
Islamic bank guarantee the deposited amount of customer A?
a) Yes
b) No
c) No, but third party guarantee is possible
66. Company ABC issues Sukuk for the expansion of its business. Is it allowed to guarantee Sukuk
return?
a) Yes
b) No
c) No, but third party guarantee is possible.
67. Mr. Anas enters into a Murabaha agreement with an Islamic bank for the purchase of raw materials
for his production business. Mr. Anas is a sole proprietor and does not have a credit history. Which
sort of guarantee can be taken from him by bank?
a) Self-guarantee to fulfil contract stipulations
b) Third party guarantee
c) Both a and b
d) None of the above
68. Mr. Mustafa enters into a Car Ijarah agreement with an Islamic bank. Mr. Mustafa has newly got a
job and this is the first time he is availing credit facility from a financial institution. Which sort of
guarantee can be taken by bank to ensure timely payments?
a) Self-guarantee to fulfil contract stipulations
b) Third party guarantee
c) Both a and b
d) None of the above
69. Mr. Ahmed comes to an Islamic bank counter and wants to open a bank account at an Islamic bank.
He is not interested in any return on it. He just wants to keep his money safe and secure his deposit.
The account officer shall advise him to open which type of account?
a) Mudarabah
b) Musharakah
 c) Amanah or Qard
d) None of the above
70. Mr. Ibrahim comes to a financial institution for safekeeping his money in a bank account without
any expectation of returns. The financial institution is willing to provide capital protection, but also
wants to use the funds deposited by customer, which mode should be used?
a) Mudarabah
b) Musharakah
c) Amanah
d) Qard
71. Mr. Ismail and Mr. Ishaq recently availed car Ijarah from two different banks. Mr. Ismail has to pay
rentals which change with time according to some benchmark changes. Mr. Ismail has to pay fixed
rents. Both contracts are valid because in Ijarah, the rental can be:
a) Fixed
b) Floating
c) Combination of both
d) All of the above
72. Mr. Ilyas takes house financing from an Islamic bank. At the time of signing contract, no rent is fixed.
It is not valid because:
a) Rent must be stipulated for all periods
b) Rent must be stipulated for no period
c) Rent must be stipulated for first period at least
d) None of the above
73. ABC Enterprises needs liquidity and have shortage of liquid assets, but there are fixed assets in its
ownership. The corporate relationship officer at an Islamic bank recommends it to enter into the
type of lease in which same asset owned by a client is subsequently leased to the client. It is known
as:
a) Forward lease
b) Mortgage
c) Sale and Leaseback
d) None of the above
74. Mr. Qamar wants to avail car financing facility, but the car will have to be ordered and it will be
delivered after 3 months. Can the contract be signed right now?
a) Yes
b) No
c) Yes, but subsequently. Initially, undertaking to lease is signed.
d) None of the above
75. Mr. Noman avails lease financing from an Islamic bank using the mode of Ijarah. When can he get
title to the asset?
a) At the start of lease
b) At the end of lease automatically
c) At the end of lease if client purchases and bank sells the asset to client
d) None of the above
76. An Islamic bank asks its Ijarah client to give security deposit. Amount taken from the client is
regarded as:
a) Hamish Jiddiyah
b) Seed capital
c) Mark-up
d) None of the above
77. Mr. Aman leases an asset from an Islamic bank. If the leased asset becomes unusable and the repair
time takes 3 months, what will be the ruling about rentals for these 3 months?
a) No rentals charged
b) Rentals booked, but paid later
c) Rentals booked and charged on normal basis
d) None of the above
78. Umer enterprise obtains industrial equipment on Ijarah. Who has the title of the asset in Ijarah lease
until it ends?
a) Bank
b) Client
c) Both
d) None of the above
79. Tawakkul Corporation obtains heavy machinery for its plant using Ijarah financing from an Islamic
bank. Who bears the insurance cost in Ijarah lease?
a) Bank
b) Client
c) Both
d) None of the above
80. Mr. Hamza availed car Ijarah facility from an Islamic bank. Now, he has got promotion in his
organization and he has the capacity to repay his dues earlier than the contract maturity date. What
is the ruling about prepayment in Ijarah?
a) Allowed with no prior stipulation of reduction in dues to the bank
b) No allowed
 c) Allowed with prior stipulation of reduction in dues to the bank
d) None of the above
81. Usman Limited issued an Ijarah Sukuk for the expansion of a new plant. If the Ijarah asset owned by
Sukuk holders is destroyed due to some reason, who will bear the risk?
a) Lessee
b) Special Purpose Vehicle
c) Sukuk Holder
d) None of the above
82. Khalid Limited purchased raw material using Murabaha financing facility from an Islamic bank.
Banks appoints the client as agent. Before declaration it is necessary:
a) Not to consume the asset
b) To pay the bank Murabaha price
c) For bank to take physical possession
d) None of the above
83. A client applies for Murabaha financing. Bank appoints it as agent. He purchased the asset and now
the bank will sell the asset to him. But, possession of the goods is necessary before sale. Possession
can be:
a) Real
b) Constructive
c) Both a and b
d) None of the above
84. A client applies for Murabaha financing. Bank appoints it as agent and the client as agent makes
payment to the supplier. Client and bank enter into a sale contract. Price is not specified and neither
fully paid client. This contract is invalid because:
a) Price not agreed
b) Price not fully paid
c) Supplier not paid directly by bank
d) None of the above
85. A client applies for Murabaha financing. Bank appoints it as agent and the client as agent makes
payment to the supplier. Client has used the materials in its production process. Client and bank
enter into a sale contract. This contract is invalid because?
a) Goods consumed before declaration
b) Price agreed but not paid on spot
c) Including mark-up over cost price
d) None of the above
86. Afroze Limited delays payment due to the Islamic bank. If late payment penalty is taken from client,
it is:
a) Taken to P&L
b) Paid to Charity immediately
c) Taken to Charity A/C & paid from time to time
d) Both b and c
87. Price Rs 1,000 for 1 year deferred payment & Rs 2,000 for 2 year. Which of the following is valid in
Murabaha?
a) Client agrees to one of the two
b) Client agrees to none
c) Price schedule can not involve time variant price
d) None of the above
88. Engro Foods want to enter into Salam contract with an Islamic bank. Engro will produce milk and
will sell it to third party distributors as agent to the bank via another contract. In Salam, it is
mandatory that the:
a) Goods are clearly specified
b) Goods exist in market from the date of contract to date of delivery
c) Payment is spot
d) All of the above
89. Engro Foods want to enter into Salam contract with an Islamic bank. Engro will produce milk. Bank
appoints third party distributors as agent to the bank via another contract to sell the milk to
retailers. Parallel Salam cannot be done:
a) For same date of delivery of Salam
b) For same amount of Salam
c) With same client
d) None of the above
90. Engro Foods want to enter into Salam contract with an Islamic bank. Engro will produce milk. Bank
appoints third party distributors as agent to the bank via another contract to sell the milk to
retailers. If Salam contract is not fulfilled, parallel Salam will:
a) Be invalid
b) Still have to be fulfiled
c) Delayed till Salam contract is fulfilled
d) None of the above
91. Mr. Ali exports goods worth $1,000 USD. He cannot exchange $1,000 USD against $1,200 because
Salam used in currency hedging cannot be done in:
a) Different currencies
 b) Same currency in deferred transactions
c) All Deferred transactions
d) None of the above
92. A sugar mill wants to enter into Salam contract with an Islamic bank. Sugar mill will produce sugar.
Bank appoints third party distributors as agent to the bank via another contract to sell the sugar to
the retailers. Bank as buyer in Salam cannot sell the asset before:
a) Paying price
b) Getting ownership, delivery and possession
c) Unless it owns asset
d) None of the above
93. DHA enters into Istisna contract with a builder. Can price be adjusted based on cost of production
changes?
a) No possible
b) Possible irrespective of cost changes
c) Possible only if there is real change in cost structure
d) None of the above
94. Mr. Saleem identifies a car in the showroom and wants to enter into an Istisna contract with an
Islamic bank for the purchase of that car. It is not possible because Istisna is valid only in:
a) Goods that can be manufactured
b) Goods that grow through a natural process
c) Existing assets
d) None of the above
95. NHA enters into Istisna contract with a infrastructure company for the construction of roads and
bridges. Istisna contract is binding on:
a) Both parties all the time
b) No party
c) Binding once the manufacturing work starts
d) None of the above
96. Siemens Company is asked to manufacture an electricity generating plant using the mode of Istisna
by the government of Pakistan. Before delivery and possession handed over of the plant to
government, who bears risk?
a) Buyer
b) Seller
c) Both a and b
d) None of the above
97. Siemens Company is asked to manufacture an electricity generating plant using the mode of Istisna
by the government of Pakistan. After delivery and possession handed over of the plant to
government, who bears risk?
a) Buyer
b) Seller
c) Both a and b
d) None of the above
98. A new shopping plaza is to be built by a builder. The client avails Istisna facility. Regarding price,
rules of Istisna allow:
a) Payment of price in instalments
b) Instalments linked to stage of production
c) No partial payment
d) Both a and b
99. NHA gives contract of making motorway to an infrastructure company. In Istisna, the delivery date:
a) Has to be exactly specified
b) Has to be specified in terms of latest date when manufacturing will complete
c) Need not be specified
d) None of the above
100. Mr. Yousuf deposits RM 10,000 in a saving account at an Islamic bank. The saving account is offered
using Mudarabah. Here, Mr .Yousuf will be:
a) Rabb-ul-Maal
b) Mudarib
c) Sharik
d) None of the above
101. Mr. Yousuf deposits RM 10,000 in a saving account at an Islamic bank. The saving account is offered
using Mudarabah. Here, bank will be:
a) Rabb-ul-Maal
b) Mudarib
c) Sharik
d) None of the above
102. Five persons from general public each deposit RM 1,000 in a saving account at an Islamic bank. The
saving account is offered using Mudarabah. If loss occurs, it will be borne by:
a) Rabb-ul-Maal
b) Mudarib
c) Both a and b
 d) None of the above
103. In Mudarabah based deposit schemes, what happens to bank as Mudarib if there is a loss?
a) Bank gets a fixed fee
b) Bank loses his efforts
c) Bank gets fixed profits
d) None of the above
104. Al-Hilal bank wants to invest its excess liquidity with an Islamic bank using the mode of Mudarabah.
But, it wants to limit the use of investment in particular type of activities. Which type of Mudarabah
can be used to allow investment only in specified projects or activities?
a) Mudarabah Mutlaqah
b) Mudarabah Muqayyadah
c) Musharakah
d) None of the above
105. Fatima enterprise is a big conglomerate group. It wants to avail Mudarabah financing and bank is
willing to provide it based on sound credit history and financial position of the company. Different
PSR can be set for different types of businesses.
a) Allowed
b) Not Allowed
c) PSR must be same in all activities
d) None of the above
106. Faisal Limited enters into a Mudarabah financing arrangement with an Islamic bank whereby bank
will be Rabb-ul-Maal. PSR in Mudarabah can be:
a) Same as capital contribution ratio
b) Different from capital contribution ratio
c) Different for different partners
d) All of the above
107. If an Islamic bank as Mudarib also wants to invest in Mudarabah, then:
a) Hybrid Mudarabah and Musharakah can be used
b) Only Musharakah can be used
c) It is not possible
d) None of the above
108. In which of the following modes of financing, the client can not avail financing facility for the
purchase of an existing asset?
a) Murabaha
b) Ijarah
 c) Salam
d) None of the above
109. Al-Hilal Limited issues a 3-year Ijarah Sukuk. When the Sukuk matures, the redemption of Sukuk
implies?
a) Debt retirement
b) Leased asset sold to Sukuk holder by issuer
c) Leased asset sold by Sukuk holder to issuer
d) None of the above
110. If the objective of a firm is to obtain long term huge amount of financing, the best suited mode is?
a) Ijarah Sukuk
b) Murabaha
c) Salam
d) None of the above
111. In the current account with capital guarantee, if the bank wants to use the funds that are deposited
in its operations, then it shall use the mode of:
a) Amanah
b) Qard
c) Mudarabah
d) None of the above
112. In which mode, the capital cannot be guaranteed by an Islamic bank in offering deposit products?
a) Amanah
b) Qard
c) Mudarabah
d) None of above