The document discusses Monte Carlo simulation of the Heston stochastic volatility model. It provides background on the Black-Scholes and Heston models. Cholesky decomposition is used to simulate correlated random variables representing stock prices and volatility. MATLAB GUI is developed to price European, Asian and lookback options using Monte Carlo simulation of the Heston model. Empirical tests show the Heston model prices converge to Black-Scholes as the number of iterations increase.