Question: i . Monte Carlo simulation has its origin in physics. However, it has been used in a variety of fields. Explain why Monte Carlo simulation

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Monte Carlo simulation has its origin in physics. However, it has been used in a variety of fields. Explain why Monte Carlo simulation is widely used in finance. Give one example of an application of Monte Carlo simulation in the field of finance.

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List and discuss the desirable properties of a random number generator.

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iii. Consider three randomly generated variables

Z_{1}, Z_{2},

and

Z_{3} .

Explain what the following two figures below show.

i. Monte Carlo simulation has its origin in physics. However, it

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