When do I use a lognormal distribution in a Monte Carlo simulation? Many growth processes in the economy and in nature follow a simple principle: what is large grows faster. What is small grows more slowly. This is exactly where the lognormal distribution comes in. It is a key tool for realistically representing such processes, but it also has clear limits you should know about. Yet one thing makes the lognormal distribution particularly challenging: its parametrization. Even small changes can lead to dramatically different results. To use it sensibly in risk management, you therefore need tools that give you control, transparency, and visual feedback, so that modeling does not become a risk in itself. 🎥 The new Risk Kit video shows how that's done: 👉 https://lnkd.in/efumSTnU
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