Article ID: | iaor19962310 |
Country: | United States |
Volume: | 26 |
Issue: | 3 |
Start Page Number: | 66 |
End Page Number: | 76 |
Publication Date: | May 1996 |
Journal: | Interfaces |
Authors: | Trippi Robert R. |
Keywords: | financial, investment, meteorology |
In surveys, computer simulation nearly always tops lists of the most frequently used OR/MS methods, largely because of its great versatility. For example, where nonlinearities or path dependence exists, Monte Carlo simulation is the only practical means available for evaluating financial derivatives and asset allocation or switching policies. Teaching business students the theory and use of Monte Carlo simulation in evaluating investment policies is challenging, especially at the undergraduate level. The paper developed a management game that requries team effort and provides students with experience in unsupervised research design and hands-on use of state-of-the-art simulation software to analyze an interesting problem in investment management.