Historical vs Monte Carlo

balajismz
Finance Junkie
Posts: 63
Joined: Mon Nov 05, 2012 9:13 am

Historical vs Monte Carlo

Postby balajismz » Wed Nov 14, 2012 9:17 am

When would a Monte Carlo simulation be preferable to a historical simulation?

A) Historical data does not produce favorable results.
B) Insufficient computer capacity.
C) A large amount of historical data is available.
D) There is only a small amount of historical data.

My pick: I would go with option 4. Can someone confirm

Thanks,

Balaji

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naresh.thkr
Good Student
Posts: 25
Joined: Sat Aug 11, 2012 7:02 pm

Re: Historical vs Monte Carlo

Postby naresh.thkr » Wed Nov 14, 2012 12:13 pm

Hi Balaji,

You r right as historical data cant be available for all assets and hence, Simulation method is preferred over historical. Correct me if i m wrong.

Naresh.


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