Hello All, How many decimals are you guys using on your calculator. I am using the TI with 4 decimal places but I when doing some of the TVM problems in Stalla if I round to the fourth decimal I can end up getting the wrong answer. Any suggestions? Joe
How could you end up with the wrong question? The range between the options on CFAI’s answers are quite large so I don’t think you can get messed up. Care to share an example from Stalla?
Here is a question: If the annual percentage rate on a biweekly compouonded loan is 6.00%, which of the following is closest to the effective annual rate: a) 6.168% b) 6.176% c) 6.180%
- I use 7 decimal places.
It’s 6.1766% right? b.
Yes b is correct. Did you have to go out to extra decimals?
I have mine set to 4 deciaml and got c. with six decimal got b. Does CFAI have a set standard. I wonder if this is just another vendor specific things and not a “typical” CFAI problem. If you think of it I guess the current industry follows an accuracy of 1bp which is 4 decimal places.
Well to be honest, I was using Google’s calc function. Didn’t have my TI with me. But when I use my TI with 4 decimals I do get a different answer. However, the difference between answers a-b-c is just too narrow and don’t think that it will show up in the real exam.
Cool, thanks for your input. Joe
You should format your calculator to 9 decimal places. on the BA2+ hit the format button by pressing 2nd and hitting the decimal point button. enter 9 under DEC and hit enter. Further to that if you understand the basic calculation to find EAR you should really be using the ICONV button (press 2nd, then hit the number 2 button). For the question above: NOM = 6 C/Y = 26 EFF = CPT and you get 6.176315022 Saves time which will help come exam day.
I think too many decimals is absolutely worthless and the screen numbers confusing. I use 2 decimals for all calculations. The BA-II uses all possible decimals in its calculations no matter how many decimals you say you want, those are just what it shows you not what it uses. I multiply the final result by 100 or 1000 if the question requires it (which is not often). Antonio
I’m using 5 - HP 12c platinum. best regards, Marcin
I’m using 5. best regards, Marcin
I use 5 places too. The most detailed answer that I remember from the actual cfai books only went to 5 places…the exam won’t be unfair only for the reason of trying to trick anyone. They want to test knowledge not your ability to guess how many decimals they would prefer. If this was the case, there would be a clear cut explanation in the cfa institute material on how many decimals they would like. I wouldn’t worry.
I had no problem with 4 decimals in all practice exams and in real exam in June 09.