Lecture 9 - Random and Monte Carlo

What is the formula to generate a random number between 0 and 1 in Excel using a formula in spreadsheet?

• =RND()

• =RANDOM()

• =RAND()

• =RD()

Does RAND() function generate normally distributed random numbers?

• Yes

• No

What does Norm.Inv do? choose the best answer.

• It helps us to create normally distributed random numbers.

• It helps us to create normally distributed random numbers based on mean and SD

• It helps us to create normally distributed random numbers based on RAND()

• It helps us to create random numbers.

What is the difference between uniformly distributed and normally distributed random numbers?

• uniformly distributed numbers have same chance of occurrence but normally distributed numbers are not.

• normally distributed numbers are more frequently occurred around the mean but it is not the case for uniformly distributed numbers

• uniformly distributed numbers are more frequently occurred around the mean but it is not the case for normally distributed numbers

• normally distributed numbers have same chance of occurrence but uniformly distributed numbers are not.

What does Frequency function do in Excel?

• It counts the number of values equal to the defined bins.

• It counts the number of values falling within the defined bins.

• It sums the number of values falling within the defined bins.

• It sums the number of values equal to the defined bins.

How do you define the bins in Frequency formula in Excel?

• All bins must be equal in length.

• You can choose bins arbitrary.

• Bins are automatically chosen by Excel.

• Bins are automatically chosen by Frequency formula.

Generally, when Monte Carlo simulation is used?

• When we want to estimate certain random numbers.

• Only when we want to estimate risk in business.

• When there is uncertainty in input values.

• None of these.

Does Monte Carlo provide us with the best method to calculate the value of Pi?

• Yes

• No

As we increase the number of iterations or simulations, we can get a more accurate value of Pi.

• True

• False

Which one best describe a random number?

• Random number are correlated to each other

• Random number are a set of unpredictable numbers.

• Random number are dependent to each other

• Random number have same digits when being estimated.