The CFA exam has been notorious, both for the gruelling nature of the exams and for making practical application difficult. Be it the calculation of bond yields, the time value of money, or portfolio metrics, a good and permitted CFA calculator is necessary. The strict CFA Calculator Policy ensures fairness, and the candidates have to abide by it. This article covers everything you should know in order to choose and use the right CFA financial calculator that will make you efficient in the exam.
Why Do You Need a Calculator for the CFA Exam?
Sophisticated financial calculations that the CFA exam requires involve discounted cash flows, present value, internal rate of return, and many more. None of these are even attempted in the time available for the exam without a CFA calculator.
A financial calculator automates these calculations so that candidates can concentrate on the application of their knowledge rather than doing manual calculations. The CFA Institute realises this need and allows only certain models to ensure fairness among candidates.
Which Calculators Are Allowed for the CFA Exam?
The CFA Institute allows only two calculator models for the CFA exam:
- Texas Instruments BA II Plus
- Standard and Professional editions are CFA permitted calculators.
- Known for its friendly user interface and affordability.
- Hewlett-Packard 12C
- Standard and Platinum versions are CFA permitted calculators.
- Preferred by candidates with a background in finance due to its Reverse Polish Notation (RPN).
These models are selected because of their functionality, reliability, and consistency. The use of other calculators, including CFA calculator online tools, is strictly not allowed during the examination.
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What Are the Differences Between the TI BA II Plus and HP 12C Calculators?
The choice between the TI BA II Plus and HP 12C depends on which you are more comfortable with in terms of features and functionality. Here’s a comparison:
| Feature | TI BA II Plus | HP 12C |
| Input Method | Algebraic | Reverse Polish Notation |
| User-Friendliness | Intuitive, beginner-friendly | Steeper learning curve |
| Speed | Faster for algebraic inputs | Faster with RPN for experts |
| Display | Two-line display (Pro version) | Single-line display |
| Price | More affordable | Slightly more expensive |
Which Calculator Is Better for the CFA Exam?
The “better” calculator is a matter of personal preference and the kind of math you like to do:
- TI BA II Plus: Best for beginners and anyone who loves the old algebraic method. It’s simpler to learn and is used by more individuals.
- HP 12C: This calculator is best for candidates who have already used RPN or like compact design and programming.
If you are new to financial calculators, the TI BA II Plus is recommended because of its ease of use and simplicity.
What Are the Differences Between the Approved Calculator Models?
Although both calculators have been compliant with the requirements of the CFA Institute, they differ in operation and other advanced features.
- TI BA II Plus:
- Provides functions for cash flow analysis, amortisation, and statistical operations.
- Its pro version is available, featuring an upgraded display and metallic body.
- HP 12C:
- It is known for financial programmability and has had a long-standing reputation in the industry.
- Advanced functionality of bond calculations, including depreciation schedules.
Ultimately, both calculators can handle all CFA exam-related computations, but this choice is just a matter of preference.
What Accessories Are Approved for the CFA Exam Calculators?
CFA allowed calculators by the CFA Institute:
- Calculator Cover: This is to protect the device but should not have any written notes on it.
- Replacement Batteries: The batteries should be replaced to avoid interruptions during the exam.
- Operating Manuals: CFA allowed calculators only during practice sessions and not during the actual examination.
Make sure you check that your calculator is working properly and has enough battery well in advance of the exam.
How Can You Learn to Use the CFA Exam Calculators?
Master your CFA financial calculator and learn ways to efficiently arrive at answers from it during the examination. Here is how you get started:
- Read the Manual: Learn all functions and shortcuts.
- Practice regularly: Use the calculator in each day’s study sessions.
- Online Tutorials: Free video resources put up for hands-on guidance.
- Mock Exams: Appear under a simulation of workplace conditions to practice in an environment of time constraints.
Both calculators have some quirks that may trip one up unless mastery of it is gained. Early practice ensures you won’t be caught wasting precious time trying to figure out some function during the exam.
What Are Some Tips and Tricks for Using a CFA Exam Calculator?
- Set Up Your Calculator Properly: First of all, set the calculator’s mode to the proper number of decimal places and calculation mode, chain or algebraic.
- Practice Key Shortcuts: Things such as the time value of money, cash flow, and NPV-only things are going to be used so much that they should be second nature.
- Avoid Human Errors: Review the input values once more, particularly in multi-step problems.
- Clear Memory: If you get into a habit of clearing your calculator memory between problems, this will help avoid residual data errors.
- Bring a Backup: Bring along an extra approved calculator in case something goes wrong with the first one.
With these tips, you are guaranteed a smoother and more efficient examination.
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Conclusion
Preparation is also underscored in the CFA calculator policy; hence, the need for candidates to consider the rules properly. Be it a TI BA II Plus or an HP 12C, mastering the features of your calculator will be a guarantee to ace this section of the CFA.
While these tools dramatically simplify computations, remember that they are only as good as your knowledge of the CFA course material. Remember to couple computational efficiency with a sound grasp of the concept to create synergy in attacking problems on the exam.
FAQs on CFA Calculator Policy
What Is the CFA Calculator Policy?
The CFA Institute allows for only two types of calculators: the TX BA II Plus—the Standard or the Professional—and the HP 12C—the Standard or Platinum.
What Calculator Can I Bring to the CFA Exam?
You may bring the Texas Instruments BA II Plus or the Hewlett-Packard 12C, along with permitted accessories such as a replacement battery.
How Do I Set Up a Calculator for the CFA Exam?
Set your calculator to the appropriate calculation mode (such as chain or algebraic), and adjust decimal settings as desired.
Can I Bring Two Calculators to the CFA Exam?
For this reason, you can bring two approved calculators as a backup should one malfunction.
Does CFA Allow a Formula Sheet?
No, formula sheets are not allowed in the CFA test. All formulas are required to be memorised and applied with the CFA allowed calculators.
