MC Simulation is one of the most effective tools for complex asset valuations. Monte Carlo simulation is a mathematical technique that simulates the range of possible outcomes for an uncertain event. These predictions are based on an estimated range of values instead of a fixed set of values and evolve randomly. Computers use Monte Carlo simulations to analyze data and predict a future outcome based on a course of action. First, Monte Carlo simulations use a probability distribution for any variable that has inherent uncertainty. Then, it recalculates the results many times, using a different set of random numbers within the estimated range each time. This process generates many probable outcomes, which become more accurate as the number of inputs grows. In other words, the different outcomes form a normal distribution or bell curve, where the most common outcome is in the middle of the curve.