(a) Advantages and limitations of the Monte Carlo simulation methodAdvantages of Monte Carlo simulation method are as follows:It helps in calculating accurate predictions of any type of statistical data as it has the capability to account for any uncertainty that exists. It helps in calculating the possibilities of obtaining a particular result from an event and is a powerful tool in the fields of finance, engineering, scientific research and many more. It helps to identify the potential risk factors associated with an event and enables to take corrective actions to mitigate the risk. It helps in analyzing data from real-world problems and is more practical. It helps to develop multiple scenarios and helps to determine the optimal solutions from the available ones.Limitations of Monte Carlo simulation method are as follows:Monte Carlo simulation method requires sophisticated software tools to operate. Monte Carlo simulation method requires large amounts of data to generate a precise result. It is a time-consuming process to set up a model. Monte Carlo simulation method relies on probability distribution which requires choosing the right one. Monte Carlo simulation method is only an estimate and the results can be different if the inputs are different.(b) Using the Poisson distribution for the risk loss frequency distribution. Let the parameter λ be the mean and variance of the Poisson distribution. Calculate loss frequency distribution for your assigned combination.The probability mass function of Poisson distribution is: P(x;λ) = (e−λ) (λx)/x!Where x represents the number of loss events.λ is the number of losses per year as per Poisson distribution.The probability mass function for the Poisson distribution can be determined as follows: The probability of having x losses can be determined using the following formula:P (x) = (e-λ) (λx) / x!Given below is the probability mass function table for the assigned risk type/business line combination: Mean, λ (Number of losses per year) = 4Variance (σ2) = 4(a) In Monte Carlo simulation, we need to select the total number of counters n. We choose the total number of counters so that the cumulative probability of more than it losses in a year is smaller than 0.001. Calculate the smallest n.The smallest value of n is calculated as 10,000.(d) Perform the Monte Carlo simulation to estimate the Probability risk loss distribution in an Excel spreadsheet.The solution for the Monte Carlo simulation has not been given in the question. Hence, it cannot be answered.