medium · Quantitative Finance numerical
What is the primary objective of employing variance-reduction techniques like antithetic variates in Monte Carlo simulations?
- To eliminate the need for generating any independent standard normal random variables.
- To increase the expected value of the estimator so it exceeds the true population mean.
- To decrease the standard error of the estimate without increasing the number of simulated paths.
- To change the convergence rate of the simulation from the usual O(1/√(M)) down to a faster O(1/M).
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