Financial Modeling and Simulation

What is Financial Modeling Simulation?

Monte Carlo simulation can be used in financial modeling as a form of risk analysis. Though it’s not commonly performed, software such as @Risk, Palisade, and others can be used to analyze how the value of a business (in a DCF model) is impacted by thousands of changes to assumptions in the model that follow a certain type of distribution.


Financial Modeling and Simulation

Additional Questions and Answers

CFI is the official global provider of financial modeling and valuation analyst FMVA Designation. CFI’s mission is to help anyone become a world-class financial analyst and has a wide range of resources to help you along the way.

In order to become a great financial analyst, below are some additional questions and answers for you to explore further:

  • What are the types of financial models?
  • What is sensitivity analysis?
  • What is bookkeeping?
  • What are the most common valuation methods?

Example Excel Model

Below is a screenshot from one of CFI’s online analyst training and certification courses, offered 100% online.

To learn How to Build an Excel Model step-by-step, click on the image below.

financial modeling questions and answers

Analyst Certification Program

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