BNK610 Final Term Notes

126: Particpatory Modes – Mudaraba-3 MCQs:

Q1. What are the various capacities in which a Mudarib may have to work according to the contract?

1. Only as a partner
2. Trustee, agent, partner, indemnifier/liable, and wage-earner
3. Solely as an agent to the Rabbul-māl
4. Only as an indemnifier/liable

Answer: b. Trustee, agent, partner, indemnifier/liable, and wage-earner

Q2. In a multilateral Mudarabah, what forms can it take?

1. Only one financier contracting with a single person
2. One financier contracting with more than one worker
3. A number of financiers contracting with a single person
4. All of the above

Answer: d. All of the above

Q3. What is Sub-Mudarabah, and under what condition is it allowed?

1. It is not allowed under any circumstances
2. Mudarib may give the Mudarabah capital to a third party without the consent of Rab bul Maal
3. It is allowed with the consent of Rab bul Maal
4. It is allowed only in case of profit-sharing

Answer: c. It is allowed with the consent of Rab bul Maal

Q4. What can make the Mudarabah contract void or voidable?

1. Absence of lawful items of trade
2. Mudarib working as a wage-earner
3. Mudarib giving the Mudarabah capital to a third party
4. Mudarib's actions being in the best interest of the contract

Answer: a. Absence of lawful items of trade

Q5. According to classical jurists, what was the scope of use of Mudarabah?

1. Limited to buying/selling activities
2. Only applicable to financing activities
3. Wide scope for use by Islamic banks
4. Restricted to the act of trade and partnership

Answer: a. Limited to buying/selling activities

Q6. How is Mudarib considered with respect to the capital entrusted to him?

1. Not trustworthy
2. Trustworthy only in financial matters
3. Considered trustworthy with respect to the capital
4. Liable for all losses incurred in business activities

Answer: c. Considered trustworthy with respect to the capital

Q7. What role does the Mudarib play in a Mudarabah contract?

1. Sole investor
2. Business owner
3. Trustee, agent, partner, indemnifier/liable, and wage-earner
4. Capital provider

Answer: c) Trustee, agent, partner, indemnifier/liable, and wage-earner

Q8. In a multilateral Mudarabah, what forms can it take?

1. Only one financier with multiple workers
2. Only multiple financiers with one worker
3. A number of financiers with a single person or a financier with more than one worker
4. Only a single financier with a single worker

Answer: c) A number of financiers with a single person or a financier with more than one worker

Q9. What is Sub-Mudarabah, and when is it allowed?

1. It is not allowed in Mudarabah contracts.
2. It requires the consent of Rab bul Maal and allows Mudarib to give the Mudarabah capital to a third party on Mudarabah terms.
3. It can be done without the consent of Rab bul Maal.
4. Sub-Mudarabah is an alternative term for multilateral Mudarabah.

Answer: b) It requires the consent of Rab bul Maal and allows Mudarib to give the Mudarabah capital to a third party on Mudarabah terms.

Q10. What makes a Mudarabah contract void or voidable?

1. Involvement of multiple financiers
2. Failure to have a single financier
3. Use of unlawful items of trade
4. Exclusive use for buying and selling

Answer: c) Use of unlawful items of trade

Q11. How do contemporary jurists differ from classical jurists regarding the scope of Mudarabah?

1. They restrict it to buying/selling activities.
2. They allow a wider scope, especially for Islamic banks as an alternative to interest- based financing.
3. They completely reject the use of Mudarabah.