Setting up a probability distribution, building a cumulative probability distribution, and generating random numbers are:
A) necessary when the underlying probability distribution is normal.
B) three of the five steps in Monte Carlo simulation.
C) elements of physical simulation but not mathematical simulation.
D) the elements of the threefold idea behind simulation.
E) advantages of simulation.

Question

Quizplus · Accepted Answer

These are indeed three of the five steps involved in conducting a Monte Carlo simulation, which is a technique used to understand the impact of risk and uncertainty in prediction and forecasting models.

Setting Up a Probability Distribution, Building a Cumulative Probability Distribution