Suppose that a support bond is being analyzed using the Monte Carlo simulation methodology. The theoretical value

Question:

Suppose that a support bond is being analyzed using the methodology. The theoretical value using 1,500 interest-rate paths is 88. The range for the path present values is a low of 50 and a high of 115. The standard deviation is 15 points. How much confidence would you place on the theoretical value of 88?
Monte Carlo simulation
Monte Carlo simulation is a technique used to understand the impact of risk and uncertainty in financial, project management, cost, and other forecasting models. A Monte Carlo simulator helps one visualize most or all of the potential outcomes to...