Watch Building Probability Models in Excel Part 5: Modeling an Investment Using Discrete Random Variables

Posted on
6,477 Points
Last Modified:
Experience Level: Beginner
The viewer will learn how to use a discrete random variable to simulate the return on an investment over a period of years, create a Monte Carlo simulation using the discrete random variable, and create a graph to represent the possible returns over 500 iterations.

Video Steps

1. Modeling a Simple Investment: Type in the amount invested, the possible returns, and the corresponding probabilities

2. Label column A and B “Return” and “Wealth,” respectively in A11 and B10

3. Enter =DISCRINV(RAND(),$B$2:$B$7,$A$2:$A$7) into cell A12 and copy down to cell A21

4. Enter =D2 into cell B11

5. Enter =B11*A12 into cell B12 and copy down to cell B21

6. Create a Monte Carlo Simulation: Enter =B21 into cell B23

7. Enter =B21 into cell B23

8. Click Tools > SimTools > Simulation Table

Author:Toby Reaper
As you can union records, you can join field values. Presented here, DJoin offers increased speed and flexibility compared to the ancient ConcatRelated and similar functions. Further, it offers better read-out of Multi-Value fields.
Listing and selecting time zones in Microsoft Access and Excel is not straight forward. In the previous article was shown how to retrieve the time zones of Windows. Here will be demonstrated how to create tables to store these and how to display and…

Keep in touch with Experts Exchange

Tech news and trends delivered to your inbox every month