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.”
—Christopher Lasch (b. 1932)
“Sport in the sense of a mass-spectacle, with death to add to the underlying excitement, comes into existence when a population has been drilled and regimented and depressed to such an extent that it needs at least a vicarious participation in difficult feats of strength or skill or heroism in order to sustain its waning life-sense.”
—Lewis Mumford (1895–1990)
“If the worker and his boss enjoy the same television program and visit the same resort places, if the typist is as attractively made up as the daughter of her employer, if the Negro owns a Cadillac, if they all read the same newspaper, then this assimilation indicates not the disappearance of classes, but the extent to which the needs and satisfactions that serve the preservation of the Establishment are shared by the underlying population.”
—Herbert Marcuse (1898–1979)