Making Sense of Monte Carlo

When you hear the words “Monte Carlo simulation,” do you:
a)  Scream;
b)  Pack your suitcase—Mediterranean vacation! (Simulation? Nah!); or
c)  Ponder the link between 19th century botany and modern valuation techniques?
If you chose a) and would rather b), read this Client Briefing to c).

Monte Carlo simulations are often only marginally understood by decision makers—and trying to comprehend them makes some want to scream. But while Monte Carlo simulations are complicated, the way we explain them does not have to be. This Client Briefing offers a plain-English guide to Monte Carlo simulations, which are used to value market-based performance awards (e.g., relative TSR). The goal is to help companies understand the implications of design choices on valuation outcomes in a conversational manner. 

Click here to download the Client Briefing (PDF).