Underlying

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:

    Every age develops its own peculiar forms of pathology, which express in exaggerated form its underlying character structure.
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    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.
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    Comedy deflates the sense precisely so that the underlying lubricity and malice may bubble to the surface.
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