how to use excel to generate random samples from distributon

[mathew5502]

Hi, im at uni studying accounting and finance and am having trouble
using excel to generate random samples from distributions. Can anyone help? I have no idea wot im doing really.

 

[tusharm]

Any continuous random variable can be generated with function-inverse (uniform random variable). While true, that's a bit abstract, so maybe an example or two.

Suppose you want to generate a normally distributed r.v. with mean 4 and std.dev. 2. Then, use =NORMINV(RAND(), 4, 2)

Similarly, to generate values from a log normal distribution, use LOGINV(RAND(),mean,stdev).