A model that represents the financial operations or financial statements of a company in terms of its business parameters and forecasts future financial performance. Models are used for risk management by examining different economic scenarios for the future. Financial models are also used to provide valuations of individual assets that might not be actively traded in a secondary market.
Nearby TermsFinancial market Financial meltdown Financial model Financial needs approach Financial objectives
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University