Stochastic methods

Stochastic methods refer to techniques and models that incorporate randomness or uncertainty in their processes. Unlike deterministic methods, which provide predictable outcomes given the same inputs, stochastic methods recognize that many real-world situations are influenced by unknown variables. For example, in finance, these methods can be used to model stock prices, which can fluctuate unpredictably. Stochastic approaches are valuable in fields like economics, engineering, and statistics, as they help in making informed decisions by analyzing possible outcomes and their probabilities, rather than relying solely on fixed predictions.