30 years: Financial markets trader
In the previous video, Abdulla explained how Monte Carlo is a way of modelling a probability distribution of returns or prices. In this video, Abdulla examines the nature of stock returns to come up with a formula that can be used in Excel to simulate the price paths.
In the previous video, Abdulla explained how Monte Carlo is a way of modelling a probability distribution of returns or prices. In this video, Abdulla examines the nature of stock returns to come up with a formula that can be used in Excel to simulate the price paths.
Finance Unlocked is the video learning platform built for finance professionals.
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
5 mins 9 secs
Monte Carlo is a way of modelling a probability distribution of returns or prices. In this particular case, changes in stock prices. This can be calculated by multiplying the spot price today by e to the power of a continuously compounded rate of return (r).
Key learning objectives:
Understand how to calculate changes in stock prices
Identify which two components make up rate (r)
Learn the formula we can input in excel for our simulations
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
05:39
05:38
03:58
04:56
04:34
04:40
05:42
04:41
04:16
07:58
05:14