Financial Risk Manager Part 1
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Which of the following statements is correct regarding the methods typically used 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 correlation with the simulated values.