# Model Risk

*Risk & Portfolio — Finicade finance glossary*

The risk that your model is simply wrong — bad assumptions, bad calibration, used outside its limits. It doesn't show up in the numbers the model produces, which is exactly what makes it dangerous.

**Related terms:** [Value at Risk (VaR)](https://finicade.com/glossary/value-at-risk), [Backtesting](https://finicade.com/glossary/backtesting), [Stress Testing](https://finicade.com/glossary/stress-testing)

**Taught in:** Risk Arena — Monte Carlo: Manufacturing Futures

Source: https://finicade.com/glossary/model-risk