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Simulation

• A statistically based behavioural approach that applies predetermined probability distributions and random numbers to predict the range and likelihood of risky outcomes.

• Are the results or the processes of generating data and outcomes for different paths and scenarios. It provides a statistical framework for what-if conditions. The art of the simulation is trying to construct an elegant, representative model. This model should properly weigh, in a probabilistic sense, the expected behavior of the time series.

• The use of a mathematical model to imitate a situation many times in order to estimate the likelihood of various possible outcomes.

 
 Embedded terms in definition
 Distributions
Order
Probability distribution
Probability
Random
Range
Scenarios
Series
Time
 
 Related Terms
 Monte carlo simulation

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