CIFE Islamic Capital Markets

Question 1

What are the main types of Sukuk structures used in the UAE capital markets?

Accepted Answer

Ijara Sukuk, Mudaraba Sukuk, Musharaka Sukuk, Murabaha Sukuk, and Wakala Sukuk among others

Answer

Only one type of Sukuk exists

Answer

Sukuk are only issued by governments

Answer

Sukuk cannot be traded on secondary markets

Question 2

What is the role of the AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions)?

Accepted Answer

An international standard-setting body that develops Sharia, accounting, auditing, governance, and ethics standards for Islamic financial institutions

Answer

It is a government regulator

Answer

It provides Islamic banking software

Answer

It manages Islamic investment funds

Question 3

What Sharia screening criteria must be met for stocks to be included in Islamic indices?

Accepted Answer

Both qualitative screening (permissible business activity) and quantitative screening (debt-to-assets, interest income, and liquid assets ratios below specified thresholds)

Answer

Only the company's sector matters

Answer

Companies must be in Muslim-majority countries

Answer

Only market capitalization matters

Question 4

What is the concept of purification (Tazkiyah) for Islamic investment returns?

Accepted Answer

The process of cleansing investment returns by donating the proportion of income derived from non-compliant activities to charity

Answer

A spiritual practice with no financial relevance

Answer

Converting conventional investments to Islamic ones

Answer

Paying taxes on investment income

Question 5

What is the S&P/Hawkamah ESG Pan Arab Index and its relevance to Islamic finance?

Accepted Answer

It demonstrates the overlap between ESG (Environmental, Social, Governance) investing and Islamic finance principles in the Arab region

Answer

It has no connection to Islamic finance

Answer

It is a pure Islamic index

Answer

It only tracks oil companies

Question 6

What is the Islamic interbank money market and how does it function?

Accepted Answer

It uses Sharia-compliant instruments like Mudaraba interbank deposits, Wakala placements, and commodity Murabaha for short-term liquidity management between Islamic banks

Answer

It uses LIBOR for pricing

Answer

It operates identically to conventional money markets

Answer

Islamic banks do not participate in interbank markets