# Monte Carlo Simulation - Example

In the previous post, we learned the algorithm to compute VaR using Monte Carlo Simulation. Let us compute VaR for one share to illustrate the algorithm.

We apply the algorithm to compute the monthly VaR for one stock. We will only consider the share price and thus work with the assumption we have only one share in our portfolio. Therefore the value of the portfolio corresponds to the value of one share.

The following assumptions are made:

Current share price | $20 |

Drift | 10% |

Volatility | 20% |

Members can download the attached spreadsheet below that shows the calculation of VaR using Monte Carlo Simulation.

#### Lesson Resources

## Data Science in Finance: 9-Book Bundle

Master R and Python for financial data science with our comprehensive bundle of 9 ebooks.

### What's Included:

- Getting Started with R
- R Programming for Data Science
- Data Visualization with R
- Financial Time Series Analysis with R
- Quantitative Trading Strategies with R
- Derivatives with R
- Credit Risk Modelling With R
- Python for Data Science
- Machine Learning in Finance using Python

Each book includes PDFs, explanations, instructions, data files, and R code for all examples.

Get the Bundle for $39 (Regular $57)## Free Guides - Getting Started with R and Python

Enter your name and email address below and we will email you the guides for R programming and Python.