I am unknowledgeable about Monte Carlos. What would be the difference in the reliability/accuracy of the final expected value in a Monte Carlo simulation under the following two methods:
1) Run a 100k-iteration Monte Carlo simulation, five times over, get the average of each of the five simulations, and then take the average of the average of those five simulations
2) Run a 500k-iteration Monte Carlo once.
Presumably the second would be more accurate and reliable, but I am not sure how?
In: Mathematics
To add what others have written. You should analyze convergence. That is to say, consider a metric that is of importance to you (say the mean simulated value of some output). Then compare how this value develops as you increase the number of simulations. Of course this may look very different depending on what exactly you are tracking (volatility, mean, percentiles,….). But it should give you some idea as to whether you need more iterations
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