Considering the Hadith "Entitlement of profit depends upon liability for loss" point out and link those practices in which Islamic banks are taking liability for loss and thus making the profit/income legitimate for them. Q3.
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- Discuss the profit and loss sharing principles based on Mudarabah in Islamic banking during a recession.The features of Mudharabah: - The profit sharing ratio between the rabbles al mal and the mudharib (Islamic bank) is agreed beforehand - Any losses, other than those incurred due to negligence or mismanagement of the Mudharib is borne by the rabbles al mal (True/False)Q2 Which of the followings are not considered as principles of Islamic banking?* A. Shared return B. Free from gharar C. Free from maysir D. No investments in prohibited industries
- 2. Conventional banks give remunerations for their depositors and Islamic banks give also remunerations for their depositors. However, the remuneration from conventional banks is not Shariah compliant, while that of Islamic banks is Shariah compliant. Explain what makes the two types of the remunerations is different.3. Compare and contrast banking to non-banking institution. How these greatly affect the business industry as well as the consumer/ individuals?QUESTION 1 Which if the following is not true of the 5Cs in evaluating credit quality Character refers to the integrity and honesty of the borrower and applies to both individuals and companies Capital refers to the savings or wealth of the borrower as an additional source of income to repay the loan Collateral refers to assets that are pledged to lender Capacity refer to external factors including the state of economy that can impact the borrower’s source of income. QUESTION 2 Which of the following is not true? Firm A Firm B Industry Benchmark 2018 2019 2020 2018 2019 2020 2018 2019 2020 ROA 9.14% 9.50% 9.90% 8.11% 8.16% 8.19% 8.11% 8.14% 8.15% ROE 22.45% 22.95% 23.45% 19.65% 19.88% 20.12% 19.95% 20.55% 21.00% TIE 1.75 1.65 1.55 2.75 2.90 3.05 2.25 2.30 2.50 CR 3.25 3.66 3.75 2.55 2.65 2.75 2.40 1.45 2.50 EPS…
- Question No 01You have studied the application of partnership, sale and purchase, and rental based Islamic financial products in Islamic banks. In contrast, you have also studied the functioning of conventional banks. Your task is to give your personal reflection on: Is Islamic banking really different?Which banking side is good for our economy? Why? Question No 02What is a difference between “Musharaka and Mudaraba”?What are the common basic rules between them to be followed?What are the uncommon rules between them? Question No 03If you go to an Islamic bank and ask for financing for following purposes, which financial product Islamic bank will most likely to use and why? 10 years financing to start a new project5 years financing to construct a house on your land3 years financing for a heavy duty generator6 months financing for IPhone 12Explain Riba-al-Quran and justify how this type of Riba exists in today’s banking system.H2. Amina, a potential client, approached the Islamic bank to obtain financing so that she could buy a certain machine from a manufacturer as she lacked the necessary funds. a. Determining the appropriate Islamic financial Instruments and b. Evaluate one of the risks and the risks mitigate
- Which if the following is not true of the 5Cs in evaluating credit quality A Character refers to the integrity and honesty of the borrower and applies to both individuals and companies B Capital refers to the savings or wealth of the borrower as an additional source of income to repay the loan C Collateral refers to assets that are pledged to lender D Capacity refer to external factors including the state of economy that can impact the borrower’s source of income.Your opinion -Any Two Islamic principles and approaches that you suggest to the Bank. Justify your choiceq11 Which of the following is an arrangement by which one party promises to pay a sum of money to policyholder as protection against an adverse or unfavorable occurrence of event? a. Short Term Loans b. Fixed Deposit c. Insurance d. Investment q12 Insurance companies and brokerage houses are examples of which of the following. a. Financial instruments b. Financial institutions c. Medium of exchange d. Financial markets