The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

BACKTESTING Definition & Legal Meaning

Definition & Citations:

The process of determining the validity of a VALUE ATRISK model by comparing actual profit and loss experience with results predicted by the model. The process is also applicable in investment management, where a current securities selection methodology is applied to prior periods to create a hypothetical performance history. See also PROFIT AND LOSS EXPLAIN.


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