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When planning for retirement, an individual investor may wish to use a Monte Carlo approach over a deterministic approach because: A)
| Monte Carlo approaches are simpler and quicker to implement. |
| B)
| deterministic approaches use inappropriate inputs. |
| C)
| Monte Carlo approaches provide a better analysis of outcome ranges than the single wealth figure estimate generated by deterministic approaches. |
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Monte Carlo approaches generate ranges of outcomes that can be associated with probabilities of their occurrences. Although slightly more involved in implementation, and sometimes taking longer to generate, Monte Carlo generated ranges and or probabilities may better indicate to the client realistic retirement opportunities. |
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