When would a Monte Carlo simulation be preferable...

When would a Monte Carlo simulation be preferable to a historical simulation?

A) Historical data does not produce favorable results.

B) There is only a small amount of historical data.

C) Insufficient computer capacity.

D) A large amount of historical data is available.




A was incorrect.
Historical simulation is most applicable if there is a large sample of past returns to draw from. The computer capacity necessary for each is about the same, and certainly the occurrence of unfavorable results is no reason to reject historical simulation.