Risk and Monte Carlo simulation
Whenever the outcome of a situation is not perfectly certain you have uncertainty or risk.
Whenever the outcome of a situation is not perfectly certain you have uncertainty or risk.
Intuition based decisions are the most common type of decisions we make in our daily life …
Every item in a budget or a profit and loss account represents in reality a probability distribution.
It is first when the decision involves consequences for the decision maker he faces a situation of risk ..
The risk is best expressed by using a graph illustrating the probability curve. The slope tells us about the uncertainty involved, the steeper the curve the less uncertainty involved.
All businesses need the ability to, if not predict the future; assess what its future economic performance can be …