Instructional Video: Simulation and Bootstrapping

Topic Progress:

Chris Brooks, Introductory Econometrics for Finance: Simulation Methods is a 36-minute instructional video analyzing the following concepts:

* Describe the basic steps to conduct a Monte Carlo simulation.
* Describe ways to reduce Monte Carlo sampling error.
* Explain how to use antithetic variate technique to reduce Monte Carlo sampling error.
* Explain how to use control variates to reduce Monte Carlo sampling error and when it is effective.
* Describe the benefits of reusing sets of random number draws across Monte Carlo experiments and how to reuse them.
* Describe the bootstrapping method and its advantage over Monte Carlo simulation.
* Describe the pseudo-random number generation method and how a good simulation design alleviates the effects the choice of the seed has on the properties of the generated series.
* Describe situations where the bootstrapping method is ineffective.
* Describe disadvantages of the simulation approach to financial problem solving.

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