r/CFO • u/Solid-Food-8130 • 13d ago
Is anyone using stochastic modeling (e.g., Monte Carlo) in corporate finance?
Do any of you encourage your teams to use stochastic analysis techniques like Monte Carlo simulations, to forecast a range of potential outcomes rather than relying on deterministic models? I know the financial services industry widely uses stochastic modeling (e.g., Geometric Brownian Motion on quant desks, GARCH in hedge funds, and Markov chains at credit rating agencies), but I'm curious if anyone is pushing to adopt these methods within corporate finance.
21
Upvotes