Monte Carlo simulation analysis
Monte Carlo simulation analysis is a risk analysis technique in which a computer is used to simulate probable future events and thus to estimate the likely profitability and risk of a project.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Monte Carlo simulation analysis. A risk analysis technique in which a computer is used to simulate probable future events and thus to estimate the likely profitability and risk of a project.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Monte Carlo Simulation. A risk analysis technique in which probable future events are simulated on a computer, generating estimated rates of return and risk indexes.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
