CAF-7 · Chapter 8 · Question 13 of 15
Which source of Islamic Finance represents a joint enterprise or partnership where all partners contribute capital, and profits are shared according to an agreed ratio, but losses are shared strictly in proportion to the capital contributed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Musharakah
Explanation
Musharakah is a joint venture/partnership where all parties provide capital. Shariah rules dictate that profits can be shared in any agreed ratio, but financial losses must be shared strictly according to the proportion of capital invested.
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