n NISM Certifications
XXI NISM Series XXI-A
Medium

The "Monte Carlo Simulation" is used in finance to:

Practice question from NISM XXI A for PMS - Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Optimize portfolio allocation based on deterministic models

  2. Assess the impact of risk and uncertainty in quantitative models

    Correct answer

  3. C

    Calculate the intrinsic value of options

  4. D

    Perform fundamental analysis of stocks

Why this is the answer

Monte Carlo simulation uses random sampling to model risk.

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