Which of the following best defines Monte Carlo simulation?
A) It is a tool for building statistical models that characterize relationships among a dependent variable and one or more independent variables.
B) It is a collection of techniques that seeks to group or segment a collection of objects into subsets.
C) It is the process of selecting values of decision variables that minimizes or maximizes some quantity of interest.
D) It is the process of generating random values for uncertain inputs in a model and computing the output variables of interest.

Question

Quizplus · Accepted Answer

Monte Carlo simulation involves generating random values for uncertain inputs in a model to compute and analyze the distribution of output variables, making it a powerful tool for risk analysis and decision making under uncertainty.

Which of the Following Best Defines Monte Carlo Simulation