Risk model is a model for forecasting risk for each security in the coverage universe. Risk models include forecasts of variance for each securiy and the covariance between each pair of securities, or factors. Risk models are used for risk analysis and portfolio optimization. The three versions of third-party risk models include: fundamental factor, macroeconomic and statistical.
Synonyms: Arbitrage Pricing Theory model, APT model
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Tim: Have you heard what we spend on Ann's
risk model every
Kay: Nope. It's a closely guarded secret, and you know what that means.
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