Central Limit Theorem approximation of the total impact of a number of risks
An example of a Monte Carlo simulation risk analysis model for Statistics
Technical difficulty: 3
Techniques used: Monte Carlo simulation in Excel
This template model allows you to input a large number of financial risks and immediately determine the exposure without having to run a simulation, by using the mathematics of Central Limit Theorem.
The model also shows the answer one gets by running a simulation for comparison.
Click on the button below to download the Excel model. ModelRisk needs to be installed in order for the model to work.