Empirical loss distribution

[Ened]

On slide 35 you write that "Monte Carlo simulation can fill in the gap", but how can we run a MC simulation without a model? That is the essence behind MC in my opinion.

 

[David Harper CFA FRM]

Ened,

It's merely a summary extract from Linda Allen 5.2.2.1; i.e., Monte Carlo simulation can "fill in the gaps" where empirical distributions are not useful due to lack of data.

David