The material below comprises excerpts from books by Dr. Johnathan Mun, our CEO and founder, such as Readings in Certified Quantitative Risk Management, 3rd Edition, and Quantitative Research Methods Using Risk Simulator and ROV BizStats Software Applying Econometrics, Multivariate Regression, Parametric and Nonparametric Hypothesis Testing, Monte Carlo Risk Simulation, Predictive Modeling, and Optimization, 4th Edition (https://www.amazon.com/author/johnathanmun). All screenshots and analytical models are run using the ROV Risk Simulator and ROV BizStats software applications. Statistical results shown are computed using Risk Simulator or BizStats. Online Training Videos are also available on these topics as well as the Certified in Quantitative Risk Management (CQRM) certification program. All materials are copyrighted as well as patent protected under international law, with all rights reserved.
This chapter provides the novice risk analyst an introduction to the Risk Simulator software for performing Monte Carlo simulation, a trial version of which is included in the book. The chapter starts off by illustrating what Risk Simulator does and what steps are taken in a Monte Carlo simulation, as well as some of the more basic elements in a simulation analysis. It then continues with how to interpret the results from a simulation and ends with a discussion of correlating variables in a simulation as well as applying precision and error control. As software versions with new enhancements are continually released, be sure to review the software’s user manual for more up-to-date details on using the latest version of the software.