Neco 2024 Islamic Religious Studies Question 20

Practice objective / multiple choice question 20 from the 2024 Neco Islamic Religious Studies examination.

Neco 2024 Islamic Religious Studies Objective / Multiple Choice Medium Difficulty
Question 20 NECO • 2024 • ISLAMIC_RELIGIOUS_STUDIES • objective

A trader offers a partner a profit‑and‑loss sharing partnership where the partner receives 30% of any profit and bears 30% of any loss, while the trader retains the remaining 70%. The partner also receives a fixed monthly payment of ₦5,000 regardless of profit. Is this arrangement permissible under Islamic commercial law? Justify your answer.

Answer Options

A. Permissible - the fixed monthly payment is treated as a legitimate salary for the partner.
Correct Answer B. Not permissible - the fixed monthly payment is riba and invalidates the mudarabah arrangement.
C. Permissible - the arrangement is a valid mudarabah because the profit share is correctly allocated.
D. Not permissible - any profit‑and‑loss sharing contract is prohibited regardless of fixed payments.
Correct Answer
B
Correct Option:
Not permissible - the fixed monthly payment is riba and invalidates the mudarabah arrangement.

About This Question

This is Neco 2024 Islamic Religious Studies Question 20. It is one of the objective questions from the 2024 Neco Islamic Religious Studies examination.

Difficulty level: Medium .

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