Explain What Is Meant by "Simulation Is Not Limited to Using

question 52

Essay

Explain what is meant by "simulation is not limited to using the standard probability distributions."

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Definitions:

Equity Securities

Financial instruments representing ownership interest in a company, such as stocks, that provide the holder with claims on the firm's profits.

Fair Value

The estimated price at which an asset would exchange hands between a willing buyer and seller, neither being under any pressure to act.

Available-for-sale Securities

Financial assets that are purchased with the intention of selling them before they reach maturity, if beneficial.

Fair Value

Fair Value is an accounting term used to describe the estimated price of an asset or liability that would be agreed upon in an orderly transaction between market participants at the measurement date.