Financial Risk Manager Part 1
Get started today
Ultimate access to all questions.
Deep dive into the quiz with AI chat providers.
We prepare a focused prompt with your quiz and certificate details so each AI can offer a more tailored, in-depth explanation.
One of the advantages of the Latin Hypercube sampling technique over the traditional Monte Carlo simulation is that:
Other
Community
NNikitesh
A
It's easier to obtain clustered observations
B
There’s no need to represent each stratum of data
C
We do not need to assume the probability distribution of the inputs
D
Fewer scenarios are required
Explanation:
The Latin Hypercube sampling technique is a stratified sampling method that divides the probability distribution into equal probability intervals. Compared to traditional Monte Carlo simulation, Latin Hypercube sampling requires fewer scenarios to achieve the same level of accuracy because it ensures better coverage of the input space by sampling from each stratum. This makes it more efficient than simple random sampling used in traditional Monte Carlo methods.
Comments
Loading comments...