http://www.financialmodelingguide.com/analytical-tools/monte-carlo-simulation/ Free online resource for financial modeling advice, tips and tricks Tue, 13 Jul 2010 17:29:24 +0000 hourly 1 http://wordpress.org/?v=3.0 http://www.financialmodelingguide.com/analytical-tools/monte-carlo-simulation/comment-page-1/#comment-4086 William J McKibbin PhD LLC Fri, 07 Aug 2009 17:37:50 +0000 http://www.financialmodelingguide.com/analytical-tools/monte-carlo-simulation/#comment-4086 I strongly agree with your statement it is necessary for the analyst to have "a firm understanding of the concept of uncertainty and statistical analysis before attempting Monte Carlo simulation analysis for financial modeling and analysis." Stochastic modeling transforms point estimates into probabilistic forecasts that are rich in predictive content. The challenge is often how to get management "buy in" to the methodology. What is needed are more statisticians and analysts who are versed in how to use and present simulation results in support of decision recommendations involving risk. The need is great. More about my preferred stochastic modeling platform for finance at: http://www.mckibbinusa.com/technology.html I strongly agree with your statement it is necessary for the analyst to have “a firm understanding of the concept of uncertainty and statistical analysis before attempting Monte Carlo simulation analysis for financial modeling and analysis.” Stochastic modeling transforms point estimates into probabilistic forecasts that are rich in predictive content. The challenge is often how to get management “buy in” to the methodology. What is needed are more statisticians and analysts who are versed in how to use and present simulation results in support of decision recommendations involving risk. The need is great. More about my preferred stochastic modeling platform for finance at: http://www.mckibbinusa.com/technology.html

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