Why should I choose AnalystNotes?

Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.

Basic Question 0 of 6

In a Monte Carlo method, interest rate paths are generated based on:

I. probability distribution.
II. volatility assumption.
III. the model itself.

User Contributed Comments 1

User Comment
myron The Monte Carlo method is an alternative method for simulating a sufficiently large number of potential interest rate paths in an effort to discover how the value of a security is affected and involves randomly selecting paths in an effort to approximate the results of a complete pathwise valuation.
You need to log in first to add your comment.
Your review questions and global ranking system were so helpful.
Lina

Lina

Learning Outcome Statements

describe a Monte Carlo forward-rate simulation and its application.

CFA® 2025 Level II Curriculum, Volume 4, Module 27.