HI guys/girls,
When using the calculator how many decimal places do you have it set for? I’m currently working through pricing bonds in reading 50 and have found that using 4 decimal places rather than the 3 in the schweser notes can have a massive impact on answers.
Are there guidelines set by CFAI? What’s the best policy here?
Thanks in advance
i used 4 in level 1 and i will do the same for level 2. the questions usually state selecting the answer “closest to”
Man this sucks. I got one of question wrong just because of rounding. Note that although I had rounding set to 2, my answer was 13 in place of 12.5, and I was simply doing the division of 5450/43525 on BAII. I never thought rounding will be this big issue, although I had heard from a person who had passed level 3 that in level 3 upto 9 decimal points is required. I don’t know if we need to keep at 9 in level 2 as well. But definitely getting those 0s displayed after those number sucks. It’s very hard to verify the numbers that you have already entered when you have those trailing zeroes even for absolute numbers. I wish if we had an option to disable the display for trailing 0s after decimals while still considering digits after decimal for calculation.
Being able to calculate to 9 places is fine… the calculator does it automatically if you’re carrying values from one equation to anoter by saving in ‘STO’. The problem is if CFAI start rounding in the answers to questions, especially if there are 2 or more parts with calculated values carried.
Does anyone know of any CFAI guidelines here?
isn’t the default precision enough?
@dingying85 I don’t know how much is default precision set to. I think it’s set to 9 so you should not have any problem. But it’s annoying to see those trailing zeroes on the calculator.
@3101286 No it doesn’t carry over automatically. It will only carry to precision that you set in your calculator.
It’s not decimal places that you need to think about, it’s significant digits. And 5 or 6 is plenty.
If the number is 123,456.789 then you can safely round to 123,456.
If the number is 0.123456789 then you can safely round to 0.123456
If the number is 0.0000001234 then you don’t want to round at all.