In a nutshell, Monte Carlo simulation uses random numbers to approximate the solutions to a variety of problems. For our purposes, these problems will generally involve trying to approximate complicated probability distributions for such problems as calculating: A portfolio’s value at risk (VaR) The probability that an investor will outlive her assets The probability that […]
This article is for members only. You can become a member now by purchasing a
CFA® Level I Quantitative Methods Membership, CFA® Level I Membership
This will give you access to this and all other articles at that membership level.