Answer the following questions regarding Monte Carlo simulations as TRUE or FALS

Question

Answer the following questions regarding Monte Carlo simulations as TRUE or FALSE:

1.) A Monte Carlo simulation is about obtaining many outcome values by which the risk of a model can be assessed.   

2.) Monte Carlo simulations generate many outcomes that are organized into a frequency distribution.   

3.) The repetition (replication) of outcomes in Monte Carlo simulations cannot be accomplished with the data table capability of Excel.   

4.) If there were no random numbers, we could not perform Monte Carlo simulations.

Explanation / Answer

1.) "True" --- The outcome values can be easily assessed using monte carlo simulation

2.) "True " --- IT combines random sampling of inputs and simulation to generate a frequency

3) "False" --- Monte Carlo simulation (or analysis) as its name suggests can be easily accomplished

4) "FALSE" --- Monte Carlo simulation methods do not always require truly random numbers to be useful

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