A. Define Monte Carlo simulation and explain its use in finance. B. Compared with analytical methods, what

Question:

A. Define and explain its use in finance.
B. Compared with analytical methods, what are the strengths and weaknesses of for use in valuing securities?
Monte Carlo simulation
Monte Carlo simulation is a technique used to understand the impact of risk and uncertainty in financial, project management, cost, and other forecasting models. A Monte Carlo simulator helps one visualize most or all of the potential outcomes to...