Learning Module 6 of Quantitative Methods 6–9% of the exam
Simulation Methods
3 lessons. About 0 minutes in cram mode, 0 minutes in full.
Lessons for this module are being written. The outcomes and lesson plan below are final.
Lessons
- 1 Lognormal Distribution and Continuous Compounding
Coming soon
- 2 Monte Carlo Simulation
Coming soon
- 3 Bootstrapping
Coming soon
What the exam expects you to do
- Explain the relationship between normal and lognormal distributions and why the lognormal distribution is used to model asset prices when using continuously compounded asset returns.
- Describe Monte Carlo simulation and explain how it can be used in investment applications.
- Describe the use of bootstrap resampling in conducting a simulation based on observed data in investment applications.