When Contract Language Is Ambiguous Arbitrators

question 152

Multiple Choice

When contract language is ambiguous arbitrators:

• A) Ignore it and look for intent.
• B) Use the ordinary meaning of words to interpret the contract.
• C) Use the more general language of the contract to guide their interpretation of specific language.
• D) Go to the parties to ask their opinion of the words' meaning.

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Definitions:

Discount Rate

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

Plowback Ratio

The proportion of earnings retained by a company after dividends have been paid out, indicating the level of reinvestment in the business.

Required Return

The minimum expected return an investor demands for holding a particularly risky investment.

Market Capitalization Rate

An alternative term often used to refer to the cost of equity or the expected return of a market portfolio.