Simulation of hidden Markov models with EXCEL

The paper demonstrates the use of functions provided by EXCEL for simulation of two types of hidden Markov models. The graphical capabilities of EXCEL are then used to visualize the simulated models. The power of spreadsheet simulation comes through the fact that any change in the parameters defining a hidden Markov model can be seen immediately in the simulated observations and in the graphs. This can be a very valuable aid in the understanding of hidden Markov models. The paper should be accessible and useful to anyone who has some knowledge of EXCEL and basic probability concepts. Two applications are included.