From the course: Excel: Analytics Tips

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Monte Carlo simulation

Monte Carlo simulation - Microsoft Excel Tutorial

From the course: Excel: Analytics Tips

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Monte Carlo simulation

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advanced analytics techniques in Excel. This is a five star, expert level tip. What we're going to do is build our own Monte Carlo Simulation Model entirely within Excel. No VBA, no macros, just straight up cell formulas and data tables. Now Monte Carlo simulation, it's typically used to predict the probability of some future outcome or outcomes So, what better way to demonstrate Monte Carlo simulation than to build our own roulette simulator in Excel. So, the way this works is that you can place a certain type of bet, red or black, even or odd, specific numbers, and each bet is associated with a given payout. So, after placing your bet, determining a wager, we're using RANDBETWEEN to essentially randomize or simulate a spin of the roulette wheel. In this particular case, we've bet $10 on red. The result is the red number 23, so we won 10 bucks. But the goal isn't just to sit here and randomly spin over and over and over again. What we want to create is something like this, where…

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