|
Definition of Monte Carlo simulation - Finance dictionary
|
Monte Carlo simulation (See Chapter 31 of the Vernimmen)
Monte Carlo simulation is an elaborate variation of scenario analysis, based on sophisticated mathematical tools and software. It consists of isolating a number of the project's key variables or Value drivers, such as Asset turnover or margins, and allocating a probability distribution to each. All the assumptions about distributions of possible outcomes are entered into a spreadsheet. The model then randomly samples from a table of pre-determined probability distributions in order to identify the probability of each result.
Monte Carlo simulation (See Chapter 31 of the Vernimmen)
Monte Carlo simulation is an elaborate variation of scenario analysis, based on sophisticated mathematical tools and software. It consists of isolating a number of the project's key variables or Value drivers, such as Asset turnover or margins, and allocating a probability distribution to each. All the assumptions about distributions of possible outcomes are entered into a spreadsheet. The model then randomly samples from a table of pre-determined probability distributions in order to identify the probability of each result.
See
all terms in the dictionary of finance
|
|
|
|
You get more than just a glossary
on www.vernimmen.com:
- A monthly newsletter with over 60,000
subscribers
- 610,000 financial data for over 16,000
groups
- A 279-question quiz with answers
- A text book that has
sold 130,000 copies
- And all the rest |
To find other words in the
dictionary of finance, click on the first letter of the word you are looking
for:
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
Definitions of terms begining
with the same letter as "Monte Carlo simulation"
:
Monte Carlo simulation (See Chapter 31 of the Vernimmen)
Monte Carlo simulation is an elaborate variation of scenario analysis, based on sophisticated mathematical tools and software. It consists of isolating a number of the project's key variables or Value drivers, such as Asset turnover or margins, and allocating a probability distribution to each. All the assumptions about distributions of possible outcomes are entered into a spreadsheet. The model then randomly samples from a table of pre-determined probability distributions in order to identify the probability of each result.
|
|
