what factors are evaluated in a monte carlo simulation 
a monte carlo simulation in investing is based on historical price data for the asset or assets being evaluated the building blocks of the simulation derived from the historical data are drift standard deviation variance and average price movement the bottom linethe monte carlo simulation shows the spectrum of probable outcomes for an uncertain scenario this technique assigns multiple values to uncertain variables obtains multiple results and then takes the average of these results to arrive at an estimate from investing to engineering the monte carlo method is used in many fields to measure risk including estimating the likelihood of a gain or loss in an investment or the odds that a project will run over budget 