What is Monte Carlo simulation?
12/06/2022 | by Patrick Fischer, M.Sc., Founder & Data Scientist: FDS
Monte Carlo simulations are mathematical techniques that make it possible to simulate complexity and uncertainty in models to obtain unexpected results. They are commonly used in financial models to predict the impact of risk and uncertainty on the outcome of an investment. They use a combination of multiple random variables to produce a range of outcomes that can then be analyzed to make the best possible decision.