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Information Coefficient (IC)
A measure of the correlation between expected and actual returns. The IC is used internally within a firm to judge the performance of individual financial forecasters. The IC is measured on a scale between 0 to 1, with 1 indicating no difference between expected and actual returns. An analyst with a consistently high IC on his/her predictions will likely receive promotions and bonuses, while one with low information coefficients will likely lose his/her job.