Models that produce inaccurate results may lead to unexpected losses. The two primary ways in which models can pose a significant risk to financial services firms:

• Models can be manipulated, misunderstood, or misused; this leads to unexpected losses to the firm.
• Models can give inaccurate results, which leads to unexpected losses to the firm.

A is incorrect: Model's cost does not pose a significant risk to a financial institution.
C is incorrect: Model's time consumption does not pose any significant risk.
D is incorrect: Time of implementation does not pose a significant risk to a firm.