Statistics of Monte Carlo simulation results

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See also: Parameters and sample statistics introduction, Probability theory and statistics introduction, Monte Carlo simulation introduction

The generated random values from a Monte Carlo simulation are samples from the theoretical probability distribution of the output. The more iterations n one runs, the closer one will be to the theoretical probability distribution. We will use the profit of a project as our model output in this example:

Statistics_of_Monte_Carlo_simulation_results.jpg

Read on: Stochastic processes introduction