medium · Quantitative Finance

In the context of the Central Limit Theorem, how does the use of antithetic variates affect the convergence rate of a Monte Carlo simulation?

1. It eliminates the need for the Central Limit Theorem by making the estimator exactly normal
2. It leaves the O(1/√(M)) rate unchanged but reduces the constant of proportionality
3. It only improves convergence if the number of paths M is a power of two
4. It improves the convergence rate to O(1/M)

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