Abstract
Financial planners employ one of two statistical procedures to generate estimates of future asset values: historical simulation and Monte Carlo simulation. Through an application of statistical analysis, financial simulation, and intuition, this paper appraises the relative merits and limitations of these disparate approaches. In short, Monte Carlo simulators possess distinct advantages, but overall they do not offer a superior alternative to appropriately conducted historical simulations.
- © 2004 Pageant Media Ltd
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