- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 4. Common Probability Distributions
- Subject 12. Monte Carlo Simulation

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**CFA Practice Question**

Consider the following statements:

II. Monte Carlo simulation allows us to experiment with a proposed policy before actually implementing it.

III. Monte Carlo simulation is used to develop estimates of Value at Risk.

I. Monte Carlo simulation is used to generate a large number of random samples from a probability distribution.

II. Monte Carlo simulation allows us to experiment with a proposed policy before actually implementing it.

III. Monte Carlo simulation is used to develop estimates of Value at Risk.

Which of the following is (are) TRUE?

A. I and III

B. II and III

C. All of the above

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