0A. CFA Calculator: Introduction and Settings

Introduction

Hi, today we will discuss the different types of calculators you can use in the CFA exam and some basic tips and tricks to ensure that your initial settings are appropriate for CFA exam.

If CFA is a battle, your Calculator is your weapon of choice and you don’t want to choose the wrong weapon to fight this long battle J

CFA Institute allows only two calculator models and you want to ensure that you prepare using one of these two models :-

• Ø Texas Instruments BA II Plus^® (including BA II Plus Professional)
• Ø HP 12C^® (including the HP 12C Platinum, 12C Platinum 25th anniversary edition, 12C 30th anniversary edition, and HP 12C Prestige)

Please remember to check the CFA Institute’s calculator policy at this link http://www.cfainstitute.org/about/governance/policies/Pages/calculator_policy.aspx

My weapon of choice

I prefer Texas Instruments BA II Plus; because it’s simple and user friendly. 

However, you should try your hands on both the calculators before you make a choice.

The rest of this video assumes that you are using a Texas Instruments BA II Plus calculator.

Change Initial Calculator Settings

1.) Change the number of digits after decimal: I recommend having 6 digits after decimal. 

Please note that the default setting for BA II Plus calculator is to have only two digits after decimal.

The easiest way to check this is to divide 1 by 3 and see how many digits you get after decimal.

As shown in the picture here, the calculator has only 2 digits after decimal.

To change this, do the following:-

A.) Press 2^ND to enable the functions printed on top of each button

B.) Press FORMAT

C.) Press 6 as now you want to have 6 digits after decimal

D.) Press ENTER to finalize your choice

E.) Press 2^ND again to enable the functions printed on top

F.) and finally Press QUIT

Check that the steps worked by dividing 1 by 3 again.

As shown in the picture here, the calculator now has 6 digits after decimal.

2.) Changing periods per year to 1: The default setting for BA II Plus calculator is to have 12 periods per year. This is not ideal for CFA exams as CFA calculations deal with only one period per calendar year.

To change this, do the following

A.) Press 2^ND to enable the functions printed on top of each button

B.) Press P/Y button

C.) Press 1 as now you want to have 1 period per year

D.) Press ENTER to finalize your choice

E.) Press 2^ND again to enable the functions printed on top

F.) and finally Press QUIT

Now you are ready to start using your weapon for the CFA battle J

You can watch a video explaining the points discussed in this blog here :-

For more calculator tips like Time Value of Money calculations and Cash Flow calculations watch the posts in this blog. 

You will also find a number of CFA topics discussed on this blog in simple terms.