I was wondering how to deal with these rounding errors in swaps and others(fwd,futures), I aming using rounding off tp 5 decimals, then I tried 4 but still getting rounding errors compared to CFA EOC answers. any suggestions?
use the store function. that said, i doubt they will provide answers choices that are 0.001% apart
Thanks for the suggestions, but in swaps when you value it in millions, even .001 makes it equal to $10000!, so was a little worried.
Also how do u use the store function?
use five decimal places. there will always be slight differences due to when the rounding occurs during the computation.
I believe rounding to 4 decimals was recommended. not sure if it was a CFAI rec. or from here. but that’s what I’ve always used and yes you could have slight differences. but CFAI isn’t going to trick you with rounding, so the closest answer to your calcs should be the right one (assuming your calcs are right!).
dont lose sleep over it.
Thanks Baystreet!..any suggestions on how to tackle ethics?