IFO4
Loading...A probabilistic forecast that simulates many runs of a stochastic model, drawing input values from documented probability distributions, to produce a distribution of outcomes rather than a point estimate. Monte Carlo forecasting is the federation-recognised technique for high-stakes decisions where the distribution of outcomes is at least as informative as the central tendency. The federation requires Monte Carlo forecasts to disclose the input distributions, the number of runs, and the output percentiles, with the documentation reviewed at the steward tier under UFMS-001:4.1.
Named after the Monte Carlo casino by Stanislaw Ulam and John von Neumann at Los Alamos in the 1940s; the technique entered finance via portfolio theory in the 1970s.
Federation members using Monte Carlo forecasting disclose input distributions, run count, and output percentiles. The methodology is reviewed at steward tier accreditation under MEV-Annex:5.1. Results are presented with explicit P10, P50, and P90 ranges.
@misc{ifo4_glossary_monte_carlo_forecast,
title = {{Monte Carlo Forecast}},
author = {{IFO4 Federation Editorial Board}},
howpublished = {{IFO4 Federation Glossary, slug \texttt{monte-carlo-forecast}}},
year = {2026},
url = {https://ifo4.org/glossary/monte-carlo-forecast},
note = {Category: Budget & Forecast; key: MonteCarloForecast}
}Federation members and accredited practitioners may challenge any entry under TGS-002:1.7. Filed challenges are routed to the editorial board, triaged into the revision register, and resolved in writing on the public docket. The slug remains stable through any revision.