Let F be the distribution function F(x) xn 0 x 1 (a) Give a method for simulating a random variable having distribution F that uses only a single random number (b) Let U1, ,Un be independent random numbers Show that P max(U1, ,Un) x xn (c) Use part (b) to give a second method of simulating a random...

a The inverse transform method shows ...

Let F be the distribution function F(x) = xn 0 < x < 1 (a) Give a

Question:

Let F be the function
F(x) = xn 0 < x < 1
(a) Give a method for simulating a random variable having F that uses only a single random number.
(b) Let U1, . . . ,Un be independent random numbers. Show that
P{max(U1, . . . ,Un) ≤ x} = xn
(c) Use part (b) to give a second method of simulating a random variable having F.
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...