The Islamic Banking and Finance Workbook

Step-by-Step Exercises to help you Master the Fundamentals of Islamic Banking and Finance

Brian Kettell

• Publisher: Wiley
• Year: 2011
• ISBN:
  9781119990628
• Edition: 1
• Topic: Business
• Subtopic: Sistemi bancari e finanziari nei paesi islamici
• Index: Business

The ongoing turbulence in the global financial markets has drawn attention to an alternative system of financial intermediation: Islamic banking and finance. This is now one of the fastest growing sectors within the market place and has, so far, remained on the sidelines of this unrest. Since the inception of Islamic banking thirty years ago the number and reach of Islamic financial institutions worldwide has risen significantly. Institutions offering Islamic financial services constitute a significant and growing share of the financial system in several countries, and market participants everywhere are joining the race to study and be a part of this emerging financial system.

The Islamic Banking and Finance Workbook is a one-of-a-kind workbook on the topic, enabling readers to test their understanding of Islamic banking and finance concepts. Although suitable as a standalone learning tool, the book is designed to test the information covered in the companion book, Introduction to Islamic Finance and Banking, and covers the fundamentals of Sharia'a law, the Islamic contracts interpretations and definitions, Murabaha, Mudaraba, Musharaka, Istisna'a, Salam and Ijara modes of finance, Takaful and much more. Emphasis is placed on mini case studies, multiple choice questions and tests of the basic concepts. It also includes a full answer key and brief chapter summaries, as well as learning objectives.

The Islamic Banking and Finance Workbook is an essential learning tool for students and practitioners who want to test their knowledge of the rapidly growing world of Islamic banking and finance.

1

What Do You Know About Islam?

1.1 LEARNING OUTCOMES, SUMMARY OVERVIEW AND PROBLEMS

1.1.1 Learning Outcomes

After reading Chapter 1 you should be able to do the following:

• Describe the role played in Islam by the Prophet Mohammed.
• Explain the Islamic five pillars of faith.
• Describe zakat.
• Define the Islamic creed.
• Explain how one becomes a Muslim.
• Distinguish zakat from sadaqah.
• Describe Salat.
• Explain the Islamic belief in angels.
• Describe the hajj.
• Explain the Islamic belief in Qada'ar.
• Describe the Shahada.
• Explain the Islamic belief in the Apostles.
• Define the Ulema.
• Explain the importance of Ramadan to Muslims.
• Describe Tawhid.
• Define imam.
• Contrast the hajj with the umra.
• Explain the Islamic belief in the Hereafter.
• Explain the Islamic belief in the revealed Books.
• Test that you have fully understood the Islam beliefs that drive Islamic banking.

1.1.2 Summary Overview

The books of the Islamic faith shape both the culture and philosophy of the Muslim world.

1.1.2.1 The Books of Islam

• The Qur'an: For Muslims, the Qur'an is the ‘Word of God’. Muslims believe the identical book is in Heaven and Allah sent the angel Gabriel to Mohammed to reveal his ‘Word’. The Qur'an is divided into 114 chapters or Surahs. These Surahs are revelations given to Mohammed during his 23 years of ‘Prophethood’ from AD 610 to 632.
  The Qur'an, composed during Mohammed's lifetime, corresponds to the time and circumstances of his life. The Surahs can be divided into three time periods. The earliest are the shortest and known as Early Meccan, and date from AD 6...