Sofia Tells Gordon She Wants to Arbitrate Their Dispute

question 15

Multiple Choice

Sofia tells Gordon she wants to arbitrate their dispute. Gordon tells Sofia that if the arbitrator does not rule in her favor, they can appeal, but it is very difficult to overturn the decision of an arbitrator. Is Gordon correct?

• A) Yes, courts give extreme deference to arbitrators' decisions.
• B) No, arbitration decisions are final and binding.
• C) No, arbitration decisions are held to the same standard as a judge's ruling.
• D) No, arbitration decisions are often overturned because many arbitrators do not have a background in law.
• E) Yes, an arbitrator's decision is difficult to overturn because courts often do not have jurisdiction over a private arbitration.

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Definitions:

Effective Annual Rate

This is the interest rate on an investment or loan that accounts for the effects of compounding over a given period, providing a more accurate picture of financial returns or costs.

Monthly Compounding

The process of calculating interest earnings on the principal and previously earned interest every month.

Nominal Annual Interest Rate

The stated interest rate of a bond or loan, not adjusted for inflation, which indicates the periodic interest payment.

Payment Plans

Agreements outlining how a borrower will pay back a loan or an installment purchase over a specified time period.