I wanted to share this information on this forum,
- Statistical analysis: mean, median, standard error, variance, skewness, kurtosis
- Direct output of results to Excel sheet
- High-speed simulation mode with minimized windows
- Easy to expand, open-source code
- Support for Windows and OS X versions of Excel
Basically, in a Monte Carlo simulation you analyze a random function, often to
get its average result (its so-called "expected value"). Say you are offered
to play the following game: you throw a dice, and get 1$ it you throw 1,
4$ if 2, 9$ if 3, 16$ if 4, 25$ if 5, and 36$ if 6.
But you also have to pay 14$ upfront to participate. Would you play that game?
To answer that question, you determine the expected profit/loss; an easy way
to do this is to simulate the game many times and average the individual outcomes.