In finance, an underlying is an investment from which a derivative security is derived. Underlyings are invariably more common and more widely heard of than the securities derived from them. However the total market value of a derivative market may exceed the market of the underlying on which it is based.
For example in the case of a call option on a stock, the stock is the underlying and the option is the derivative. In the case of an option on a bond, the bond is the underlying. Stock indexes such as the Dow Jones Industrial Average or Nikkei 225, interest rates such as a LIBOR or credit ratings can also be underlyings of particular securities.
The underlyingcash balance for the financial year to May 2005 was a surplus of $13.82 billion, Finance Minister Nick Minchin said today.
The monthly financial statements for May 2005, released today, showed the actual underlyingcash balance was ahead of the 2004/05 full year estimate published in the budget of $9.22 billion.
Senator Minchin said the underlyingcash balance was running ahead of budget estimates because of underspending in several indigenous health programs, as well as delays in a number of transport and regional services programs.
Feeds |
Contact