Lesson 17: Simulation of Continuous Random Variables
October 26, 2020
Review:
- Assignment 7
- Chuck-a-luck
- Excel automation
Presentation:
- Random Variables
- Discrete Random Variables
- Probability distribution table
- Dice Simulation
- =RANDBETWEEN()
- Continuous Random Variables
- Stock Market simulation
- Assume normal distribution
- =norminv(rand(),$B$2,$B$3)
- Discrete Random Variables
Assignment:
- Stock Market Simulation in Sheets
- Use Annual Stock Market Return data as a starting point
- Modifications
- Generate a 40-year simulation (instead of 30)
- Modify the simulation to add $1,000 to the balance each year
- Make a histogram of your ending balances
