Which of the following is true about the Islamic banking method the mu

QUESTION

Which of the following is true about the Islamic banking method the mudarabah?

A. A mudarabah contract is similar to a profit-sharing scheme.

B. Under mudarabah, when an Islamic bank lends money to a business, it charges interest on the loan.

C. It is the most widely used banking method among the world’s Islamic banks, primarily because it is the easiest to implement.

D. It has been proven that a mudarabah contract discourages both long-term savings and long-term investment.

E. A mudarabah contract uses a price markup method to make profits.

ANSWER

A