As stated by Microsoft:
Using the MVVM pattern, the UI of the application and the underlying presentation and business logic is separated into three separate classes: the view, which encapsulates the UI and UI logic; the view model, which encapsulates presentation logic and state; and the model, which encapsulates the application’s business logic and data.

read more, here http://msdn.microsoft.com/en-us/library/gg405484(v=pandp.40).aspx