Browse CFA Level 1

Chapter 6: Simulation Methods

In this section

  • Normal vs. Lognormal Distributions in Asset Price Modeling
    Explore how the Normal and Lognormal Distributions underpin modern asset price and returns modeling, focusing on practical applications, simulation techniques, and risk management considerations.
  • Monte Carlo Simulation and Its Uses in Investment Analysis
    A detailed exploration of Monte Carlo simulation, covering its core steps, advantages, and wide-ranging applications in portfolio management, derivative pricing, and corporate finance, complemented by practical tips, examples, and exam-relevant insights.
  • Bootstrap Resampling Methods
    Learn how Bootstrap Resampling helps estimate distributions, assess performance metrics, and validate models with minimal assumptions.
  • Quasi‑Monte Carlo and Variance Reduction Techniques
    Dive into low‑discrepancy sequences and advanced variance reduction strategies for improving Monte Carlo simulations. Learn how quasi‑Monte Carlo methods, antithetic variates, control variates, stratified sampling, and importance sampling can help boost efficiency and accuracy in financial risk management and derivative pricing.
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Chapter 5: Portfolio Mathematics
Chapter 7: Estimation and Inference