# # of digits?

I think I vaguley remember when I started Level 1 a suggested number of digits to round to when working through problems, and more or less I’m generally pretty close to a given answer.

However with valuing derivatives, even though I’m take the right steps my numbers can be pretty off. Again, most of the time I can still pick the ‘closest’ value, but other times it’s just too close and I either have to re-do it, or literally calculate the difference between the two answers to find the one in which it’s closer.

I tend to use my STO and RCL functions on the calculator for ease and that’s probably what’s causing it. So, bottom line, is there a recommended number of decimal places I should carry my numbers to?

Yeah, I run into this too. I usually use 4 for derivatives, unless the numbers are really small and then I use 6.

For Eco,Derivatives and PM: 5 decimal places. The rest: 4 are enough. This works for me.

I’ve had my calculator set to 6 since the L1 exam calc’ing out… what the heck was it? Something in fixed income I think. Still usually off a bit on swaps but anytime I’m close enough I call that a win.

(True story: never knew what the STO and RCL buttons were for until I came into this topic so today is trending up!!!)

STO and RCL are really handy when Pricing Swaps, etc. Glad you just learned it!

@ltj: some of my friends didn’t know about the AOS function until they complained why I usually do calculations faster and more accurately than them. Relax…

I use 6. It works for Forward Rate Agreements and doesn’t get in the way for others.

Wait! Wait! Was is the AOS function? And is it on a TI or HP-12C?

#four

Mine is TI.

Go to FORMAT, use the up arrow. If you see Chn, it has not been set to AOS yet. Simply press 2nd [Enter] to change to AOS.

Edit: oh, I overlooked your question. With the AOS, our calculator will do multiplications first and then do additions or subtractions. For example: 2*3+5*6= 36 instead of 66 when the calculator is set in Chn (i.e Chain) mode.

Can someone explain in short what is STO/RCL. I lost my user manual.

http://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/91312832

Just take your calculations out to the greatest amount of decimal places shown in that specific question or answer.

Thank you!

For forward contracts and swaps, I like to use the STO function. I dont like to round because it introduces a venue for careless errors.