|Author||Topic: CFA Approved Calculators|
|Which calculator do you prefer; the Texas Instruments BA II Plus, the Texas Instruments BA II Plus Professional, the HP 12C, the HP 12C Platinum, the HP 12C 25th Anniversary Edition, or the HP 12C 30th Anniversary?
Also, I have read that the exams require actual intuitive understanding of the PV and FV formulas. And a candidate won't do well on exam 1 by simply plugging in the numbers into the calculator and letting the calculator do the work. Any truth to this?
|I have used reverse polish notation for 20 years, and cannot use algebraic calculators anymore, so the HP 12 machines were the only choice for me. However, I believe the HP 12 machines are very fine.
My impression (making last preparation for level I exam in December) is, that proficiency using the calculator should not be underestimated. Dont expect that knowing the PV and FV buttons will get you all the way, but it is surely helpful.
My university degree is in science, so I found the curriculum on quantitative methods relatively easy. I used the exercises in that part of the curriculum to acquire as much proficiency and speed with my calculator as possible, and I believe this will help me at the exam.
I have tried both the HP 12C and the HP 12C Platinum 25th anniversary edition calculators.
The platinum has a very annoying feature clearing display and memories, and the buttons are not sensitive enough for my taste, so I will rely on a plain, 10year old, vintage and almost worn out HP 12 C for the exam.
Calculating IRR or YTM on the HP 12C takes forever compared to the platinum, because the processor in the platinum is more powerful. This is not a serious drawback, however, since a proper knowledge of the calculator functionality will almost always suggest other ways of approaching a problem involving IRR or YTM.
|Hey tnilk, thanks for the input! So, in essence, you would suggest the HP series over the Texas Instruments' calculators?
Also, which problems on the exam do you plan to solve by plugging numbers into the calculator functions? And which problems will you do out and solve?
|Suggesting HP over Texas:
The primary reason for me to choose HP to Texas is the reverse polish notation, since I cannot operate an algebraic calculator anymore. I dont know the Texas machine well enough to do a full and fair head-on comparison. If you can manage algebraic notation, the Texas may be a good choice for you.
Note in this regard that the HP12C platinum 25anniversary edition does both reverse polish notation and algebraic notation, whereas the plain HP12C does only reverse polish notation.
As far as I know, the Texas machine only does algebraic notation.
The problems that I would aim at solving with the calculator are as follows:
Any problem involving cash flows, that is discounting, future value calculations, IRR, YTM, NPV, discounted payback period, etc. In several instances I have solved exercises involving perpetual cash flows by entering successively larger values of n, the number of terms, until one observes something that looks like convergence. This trick has to be used with some caution, however. Its good to remember the formulas for perpetuals as well.
Any problem involving calculation of means, weighted means, and/or standard deviations for samples or populations with more than, say, four observations.
Some problems in the equity valuation category (Gordon growth, perpetuals, etc.) can also be handled nicely with the calculator functions.
At times I have also used straight-line and accelerated depreciation functionality of the HP12C.
Put shortly, the area of Quantitative Methods is where I expect to draw most use of the calculator. At times, but certainly not always, problems in Fixed Income, Financial Statement Analysis and Corporate Finance can also call for use of the calculator functions.
|Thank you tnilk! I will certainly keep your suggestions in mind and follow accordingly.
Good luck with the exam this week.