Where are Monte Carlo simulations used
Where are Monte Carlo simulations used?
Expert
Monte Carlo simulations are used within financial problems for solving two kinds of problems:
• Exploring the statistical properties of a portfolio of investments or cashflows to determine quantities like expected returns, risk, possible downsides, probabilities of making certain profits or losses, etc.
• Finding the value of derivatives by exploiting the theoretical relationship among option values and expected payoff in a risk-neutral random walk.
What is the Capital Asset Pricing Model?
What is complete market and incomplete market in term of probabilistic?
We focus more on cash flows rather than profits when estimating proposed capital budgeting projects. Explain.
Illustrates an example of Frechet distribution?
Would exchange rate alter always enhance the risk of foreign investment? Describe the condition under which exchange rate changes may in fact reduce the risk of foreign investment. Exchange rates changes require no
Remark on the following statement: "As the U.S. imports more than it exports, it is essential for the U.S. to import capital from foreign countries to finance its present account deficits."The statement presupposes that the U.S. present account
Explain in brief Crash Metrics.
What is Generalized Auto Regressive Conditional Heteroscedasticity?
Illustrates an example of Utility Function?
How approximately is future profit calculated?
18,76,764
1960423 Asked
3,689
Active Tutors
1460032
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!