
Ultimate access to all questions.
A financial analyst at a major banking institution is tasked with assessing the value of a unique stock option with limited known attributes. To project the potential value of this option, the analyst is considering the use of simulation techniques. Specifically, they must choose between Monte Carlo simulation and bootstrapping for their analysis. Which of the following statements correctly describes bootstrapping?
A
Data used for bootstrapping must follow a standard normal distribution.
B
Data used for bootstrapping must be resampled with replacement
C
Data used for bootstrapping must come from a variable with known properties.
D
Data used for bootstrapping must be resampled such that all possible outcomes in a probability space are present.