Quick Definition

Monte Carlo Simulation is a statistical technique used to model and understand the impact of risk and uncertainty in prediction and forecasting models.

Examples

• 1Estimating the probability of different outcomes in investment portfolios.
• 2Assessing risk in financial planning for retirement.
• 3Calculating the value at risk (VaR) for a portfolio of stocks.
• 4Forecasting future sales for a new product launch based on historical data variability.

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