Test Your Islamic Finance Knowledge With The Auscif’s Quiz

One of the core aims or objectives (maqasid) of the Shariah is the preservation of Wealth (Maal).

Subject matter in a contract can not be anything that is not tangible. (Eg: usufruct (benefit from someone else's property) which is commonly found in a lease agreements)

It is permissible to sell a commodity before it comes under our control or we take (actual or constructive) possession of it. (Excluding Salam and Istisna arrangements)

Offer and acceptance are non-essential attributes of the contract and if they are missing then the contract can not be described as Void (batil).

It is permissible to have contract that combines contracts of sale and lease if they refer to the same asset (e.g. Hire Purchase contracts with e.g. a lease for 3 years and sale at 30% at the end of the lease period).

According to shari'ah, anything that has economic value is considered wealth.

Riba al-Fadl refers to a delay in the settlement of one or both counter-values.

Exchanging US$105 with AUD$100 on the spot (hand to hand, without delay) is permissible.

Buying a house for eg. $450,000 (to be paid in instalments over 5 years) is a permissible arrangement.

Late fees are permissible as long as they are mutually agreed to at the start of a contract.

Gharar refers to uncertainty and deception (amongst other things).

In Musharaka (joint venture), the profit ratio is fixed according to capital contribution, while loss ratio can be negotiated, but, must be fixed at the start.

In musharaka, partner who invest eg. $50,000 (or 10% of total investment capital) has right to specify from the beginning that his share of profit will be $5,000 per year (which equals to 10% of his initial contribution).

The result of a sale transaction is instant and results in an absolute transfer of the (asset) ownership.

Buying shares (stock) on a short term price fluctuations is considered speculation (rather than investment) and thus is a prohibited trading practice.