hard · Quantitative Finance
An analyst uses a Monte Carlo simulation with M = 10,000 paths to price an option, obtaining a standard error of $0.40.
To reduce the standard error to $0.05 using only a larger sample size, how many total paths are required?
- 80,000 paths
- 1,000,000 paths
- 640,000 paths
- 100,000 paths
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