From the course: Excel Statistics Essential Training: 2
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Monte Carlo simulation example - Microsoft Excel Tutorial
From the course: Excel Statistics Essential Training: 2
Monte Carlo simulation example
- [Instructor] Okay, so let's learn how to do a Monte Carlo simulation in Excel using a very, very simple example. We're going to be rolling dice here and we're going to take the sum of the dice, and we want to see how many times we end up with some critical value, whether it's equal to that critical value, above the critical value, or below the critical value. Now, the nice thing here is we know exactly what the odds are of rolling dice. Even if we're rolling four of them, we know how to calculate the odds of this. And you wouldn't necessarily need a Monte Carlo simulation for this, unless you want to demonstrate to somebody something like the central limit theorem or something else basic about statistics. But we're going to do this because I want to show you that Monte Carlo simulation works. It's helpful, it lets it see what the odds are in very complex situations. If it works here, it's going to work there. All…
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