What Is Correlation? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0. Key Takeaways Correlation is a statistic
What Is a Correspondence Audit? The term correspondence audit refers to a tax audit conducted by mail or phone by the Internal Revenue Service (IRS). Correspondence audits are normally conducted on organizations, such as charities and nonprofits. The IRS sends the organization a written request for additional information about a specific item or issue on
What Is a Correspondent Bank? The term correspondent bank refers to a financial institution that provides services to another one—usually in another country. It acts as an intermediary or agent, facilitating wire transfers, conducting business transactions, accepting deposits, and gathering documents on behalf of another bank. Correspondent banks are most likely to be used by
What Is a Corridor Deductible? A corridor deductible is expenses paid by the insured in excess of an insurance policy’s coverage limit, but below the threshold at which additional coverage options are available. Corridor deductibles bridge the gap between policies that reach the aggregate limit of coverage and any additional coverage that may be in effect.
What Is Corruption? Corruption is dishonest behavior by those in positions of power. Those who abuse their power may be individuals or they may belong to organizations, such as businesses or governments. Corruption can entail a variety of actions, including giving or accepting bribes or inappropriate gifts, double-dealing, and defrauding investors. Corrupt behavior is often
What Is Cost Accounting? Cost accounting is a form of managerial accounting that aims to capture a company’s total cost of production by assessing the variable costs of each step of production as well as fixed costs, such as a lease expense. Cost accounting is not GAAP-compliant, and can only be used for internal purposes.
What Is Core Capital? Core capital refers to the minimum amount of capital that a thrift bank, such as a savings bank or a savings and loan company, must have on hand in order to comply with Federal Home Loan Bank (FHLB)Â regulations. This measure was developed as a safeguard with which to protect consumers against
What Are Core Deposits? Core deposits refer to deposits that form a stable source of funds for lending banks. Such deposits may be varied in nature, and can encompass small-denomination time deposits, payment accounts, as well as checking accounts. Core deposits are made in a bank’s natural demographic market and offer numerous advantages to financial institutions
What Are Core Durable Goods Orders? Core durable goods orders refer to new orders for U.S. core durable goods, which are the total durable goods orders excluding transportation equipment. The new order numbers are closely followed by market participants as they provide indications of current economic conditions, as well as future production commitments in the
What Are Core Earnings? Core earnings are the profits derived from a company’s main or principal business, which does not take into consideration some of the expenses related to the main activities, as well as nonrecurring income or expense items that lie outside of the normal business. Core earnings as an earnings measure are not
