Definition of Safety cushion

Safety cushion

In a contingent immunization strategy, the difference between the initially available
immunization level and the safety-net return.

Dollar safety margin

The dollar equivalent of the safety cushion for a portfolio in a contingent immunization
strategy.

Contract Work Hours and Safety Standards Act

A federal Act requiring federal contractors to pay overtime for hours worked exceeding 40 per week.

Cushion bonds

High-coupon bonds that sell at only at a moderate premium because they are callable at a
price below that at which a comparable non-callable bond would sell. cushion bonds offer considerable
downside protection in a falling market.

Margin of safety

A measure of the difference between the anticipated and breakeven levels of activity.

margin of safety

the excess of the budgeted or actual sales
of a company over its breakeven point; it can be calculated
in units or dollars or as a percentage; it is equal to
(1 - degree of operating leverage)

Redemption cushion

The percentage by which the conversion value of a convertible security exceeds the
redemption price (strike price).

Safety-net return

The minimum available return that will trigger an immunization strategy in a contingent
immunization strategy.

safety stock

a buffer level of inventory kept on hand by a company in the event of fluctuating usage or unusual delays in lead time

Safety stock

Extra inventory kept on hand to guard against requirements
fluctuations.

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