Tag: Statistical Distributions
-
Monte Carlo Simulation
Utilizing statistical sampling, Monte Carlo Simulation offers insights into risk and uncertainty within predictive models. By generating a spectrum of outcomes from random inputs, it finds applications in fields like finance and engineering. Its precision is contingent on the accuracy of the underlying model and inputs.
-
Fat Tail Events
Fat Tail Events denote uncommon, large deviations from averages, often linked with significant financial shifts. These are characterized by a greater likelihood of extreme occurrences than typical predictions suggest. Their profound impact, as witnessed in events like the 2008 financial crisis, underscores the importance of understanding and managing such phenomena.