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Finance Dictionary and Glossary of Investment Terms
Monte Carlo Simulation
Definition 1.
A problem solving technique used to approximate the probability of certain outcomes by running multiple trial runs, called simulations, using random variables.
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Definition 2.
An analytical technique for solving a problem by performing a large number of trail runs, called simulations, and deducing a solution from the collective results of the trial runs. Method for calculating the probability distribution of possible outcomes.
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