Underlying
In finance, the underlying of a derivative is an asset, basket of assets, index, or even another derivative, such that the cash flows of the (former) derivative depend on the value of this underlying. There must be an independent way to observe this value to avoid conflicts of interest.
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Famous quotes containing the word underlying:
“Comedy deflates the sense precisely so that the underlying lubricity and malice may bubble to the surface.”
—Paul Goodman (1911–1972)
“The “female culture” has shifted more rapidly than the “male culture”; the image of the go-get ‘em woman has yet to be fully matched by the image of the let’s take-care-of-the-kids- together man. More important, over the last thirty years, men’s underlying feelings about taking responsibility at home have changed much less than women’s feelings have changed about forging some kind of identity at work.”
—Arlie Hochschild (20th century)
“It is commonplace that a problem stated is well on its way to solution, for statement of the nature of a problem signifies that the underlying quality is being transformed into determinate distinctions of terms and relations or has become an object of articulate thought.”
—John Dewey (1859–1952)