Insight 7 -- Montecarlo techniques
Monte Carlo Methods Monte Carlo methods (aka experiments) are a broad class of computational algorithms that rely on repeated random sampling to obtain numerical results. Their essential idea is using randomness to solve problems that might be deterministic in principle. Monte Carlo methods are typically used to solve problems which belongs to the following 'classes': optimisation; numerical integration; generating draws from probability distribution . In principle, Monte Carlo methods can be used to solve any problem having a probabilistic interpretation. In fact, since there is no known consensus on how Monte Carlo should be defined, we can say that a Monte Carlo method is just a technique to solve a mathematical/statistical problem whereas a Monte Carlo simulation is the actual Monte Carlo simulation/experiment (e.g. repeatedly sample from a specific population in order to compute the empirical mean and/or other statistics in interest). To put it simpler, pouri...