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A hedge fund's risk manager intends to conduct a simulation to forecast the future stock price of a particular company. This involves simulating future values for both a European option and an Asian option on the company's stock, with both options set to expire on the same future date. The manager is also exploring different methodologies to improve the accuracy of the simulation. Which of the following statements correctly describes the standard techniques employed to reduce sampling error?
A
Antithetic variables introduce a set of random variables that are positively correlated with the simulation variables to reduce the number of replications.
B
Control variates and antithetic variables both reduce bootstrapping sampling variability for a given number of replications.
C
The use of control variates is limited to simulations in which there is a closed-form solution with which to compare the simulated outcome.
D
The application of control variates involves employing a variable with a mean of zero and a strong positive correlation with the simulated values