Part D: Monte Carlo Simulation

As we have seen, any two runs generated from the same set of parameters might vary considerably from one$-$another. You

might be asking how simulation is useful if I get very different results every time we run a simulation. The answer is that we

do not expect simulation to be able to tell us exactly what will occur, we use it to get an idea of the range of possible

outcomes that might occur. In order to perform that sort of analysis, we need to perform many simulations, and then look

at the range of outcomes occurring in this simulations. The process of performing several simulations to estimate

probabilities relating to the outcome of a certain event is called Monte Carlo Simulation