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1
Yeah, I think it comes from statistics. It's a "model" you "fit" to the data. There is a true (but unknown) function f and you only see noisy Y_i = f(X_i) + eps_i, so f^ is like a model of how f maybe is.
2
@ravikml Just calling it "model" takes it out of all those context and then "model" is just a pretty generic term for something artificial.