PRC-3 · Chapter 4 · Question 60 of 65
In Islamic finance, a partnership is formed where an investor provides 100% of the financial capital, and an entrepreneur provides the management expertise. They share profits, but the investor bears all financial loss. This is known as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Mudarabah
Explanation
Mudarabah is a standard Islamic profit-sharing contract where one party provides capital (Rab-ul-mal) and the other provides effort/expertise (Mudarib).
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