Calculator for CFA; HP 12C Platinum or TI BA II Plus Professional



#25

Hi HP Fans!

A friend recently saw my HP 30b and asked me whether I know about HP 12CP and TI BA II Pro (CFAI approved calculators). Since no one here has even heard about calculators made by anyone other than Casio, he thought I could help.

But I don't know a thing about those two machines. Hope you guys can throw some light on which way to go.

From my reading it appears that the new 12CP is as fast as the TI. What about the functions? Are they equal or one has more functions than the other?

The input method is OK, he tried RPN on my 35S and 30b and he is open to learning it.

What about programming? Any good programs that may be useful for CFA exams on the HP 12C?

I know that Gene coaches for CFA exams. So I am waiting for your suggestions :-)

- SA


#26

I did the CFA a couple of years ago and used the 12C, and also helped a friend with the TI, so got to know that.

I preferred using the 12C - the types of calculations common to the CFA, such as interest rate conversions, compounding, etc, seem to be easier to execute on the 12C.

Regarding CFA programs, you cannot take any programs into the exam, as all calculators must have the memory cleared beforehand. The proctors are quite strict about enforcing the rules, so don't count on any programs. Regardless, I don't think there are any programs that would be of use, since the questions are generally basic.


#27

Quote:
I don't think there are any programs that would be of use

You may be right about that, but I wonder if the proctors are knowledgeable enough to know how to clear program memory on the 12c. Do they know you have to be in program mode first? If not, you could pull a fast one on them!

Don


#28

Quote:
You may be right about that, but I wonder if the proctors are knowledgeable enough to know how to clear program memory on the 12c.


Exam invigilators are a lot that I don't mess with. Some are nice, some doesn't even have humility at all. Better play safe with them :)

I didn't knew that there was such a restriction in place for custom programs. Thanks for telling me.

#29

Quote:
I preferred using the 12C - the types of calculations common to the CFA, such as interest rate conversions, compounding, etc, seem to be easier to execute on the 12C.

The TI financials, both models, are much more feature-packed than the 12c series. The only thing I don't like about them is that they aren't RPN. However, they have built-in interest conversion functions that are extremely easy to use (as easy as the 30b). They also can be set for different compounding and payment frequencies, just like the 30b. The 12c requires jumping through a bunch of hoops to perform interest conversions and asynchronous compounding.

The TIs even have much more robust statistical function set than the 12c series.

The Professional model also has with the ability to calculate MIRR and bond duration.

If I were to take the CFA right now, I would use a TI BA II Plus Professional. However, I would wish that my 30b were allowed.

Regards,

Mark


#30

So, on sheer feature set TI is better than 12C and 12CP. If someone can live without RPN they should simply choose TI, right?

Another unrelated doubt is why is CFAI not allowing any other calculators other than theese two models? Any ideas?

- SA


#31

Sujith,

Yes, if someone can live without RPN, the TI might be the better choice. It all depends on how comfortable you are with your math ability and memorization of certain formulas. If you can memorize the steps for interest conversions on the 12c, then it might not benefit you much to switch to a TI - especially if you can fly along with RPN. Also, the 12c doesn't have menus to have to worry about - all features are displayed on the keyboard. Even solving for any TVM variable on the TI takes an extra step since you have to press CPT. That hassle isn't a feature on the HPs.

In practice, I am not against owning multiple calculators and I do have more than a few. I haven't dumped my TI just because I plan on taking the CFA exam sometime in the next year or so. Still, a 12c is a tempting option just based on the RPN aspect alone.

CFAI doesn't allow other calculators because the logistics of tracking a multitude of different calculators is tedious. It is easier to keep it down to the two versions of each of the allowed models thus keeping things simple for the exam proctors . However, with the fact that the recent 12c's are ARM-powered and can be repurposed, I wonder if some ambitious and technically savvy user might be tempted to create and load an extended feature set. Personally, I've always felt that the 12c lacks in many ways. It would be nice if it could have built-in interest conversion, nPr, nCr, and other features to make it at least on parity with the TIs. I think that a person who could combine the elegance of the 12c layout and its RPN input with the features of the TI could have a tremendous advantage in an exam setting. At the same time, there are ethical implications to this regardless if it results in having no more features than the TI.

I think the ability to update the flash memory might possibly be considered a huge drawback by the CFAI. I have to wonder if they will ever take notice of this possibility and eventually press HP to create a version without the pogo port.

Regards,

Mark

Edited: 23 Mar 2011, 5:37 p.m.


#32

Some further points:

1. The calculator functions used on the exam are limited, and most calculations are very simple, so the additional feature set of the TI is of little or no use.

2. The speed of the original 12C is not a limiting factor for the CFA exam. I don't think you should be concerned at all about the speed differences for the purposes of the exam.

3. Specifically regarding interest rate conversions: Doing them on the HP is trivial, and from my experience showing someone how to use the functions on the TI, this takes longer. Regardless of this, understanding interest rate conversions is quite an important skill, and also one which is simple to learn. I highly recommend learning this and being able to do them on the HP 12C, it will save you time and simplify more complex calculations further down the road.

4. If you look around trading floors, you will see more HP 12C calculators than any other.

Let me know if you have any specific questions.


#33

Bink, Mark

Thanks for the reply guys. It might sound dumb, but can you show me an example of this interest rate conversion problems?

If I have a good conceptual grounding then tackling them won't be a problem. Is that what you are implying?

-
SA

(sent from mobile)


#34

Re interest rate conversions, they are trivial, and far more easily executed with simple steps as part of a larger calculation, than entering them longhand into a TI function.

Two basic types - converting into annual equivalent or into a periodic equivalent.

Q: Interest rate is 9% compound monthly. What is the effective annual rate.

HP Shortcut:

.09 <Enter>
12
/
1
+
12
y/x

This spits out 1.0938, and you can subtract 1, but the result is clearly 9.38%

Q: Effective annual rate is 5%. What is the rate compounded quarterly.

HP Shortcut:
1.05 <Enter>
4
1/x
y/x
4
x

You could also just enter 0.25 instead of the reciprocal of 4, but I wanted to show the method for generalized periods.

This gives 4.0488, and the answer is 4.88% You could take the extra step of subtracting 1 after the y/x to give you 0.0488 if the leading 4 is confusing.

Edited: 24 Mar 2011, 2:31 a.m.


#35

bink,

I am curious why you consider the TI method to be "longhand."

For your first example, using the TI:

2ND 2 (to get into ICONV menu)

9 Enter (for NOM)
Up
12 Enter (for C/Y)
Up
CPT (to compute EFF)

The answer for your second example you posted is incorrect. It should be 4.91%. However, your method is correct. Perhaps, you miskeyed or something...

For your second example, using the TI:

Down
5 Enter
Down
4
Down
CPT

Now, the shortcuts you gave are good and I am familiar with both of them. But, the TI method is more straightforward, less confusing, and uses fewer keystrokes. Not only that, I can extend this further to easily solve, for example, conversions involving asynchronous compounding.

For example: What is the rate of 5% account that compounds quarterly with monthly deposits?

5 enter up 4 enter up CPT down 12 enter down CPT

4.97931 is the answer - 13 keystrokes

Combining the shortcuts for the HP yields the following solution:

.05 enter 4 / 1 + 4 y/x 12 1/x y/x 12 x

12.0497931 - 17 keystrokes

Regards,

Mark


#36

Mark,

Thanks for pointing out the error - I didn't have my HP handy, so I used something else for the numbers.

The TI / HP comparison I did was some time ago, but aside from finding RPN better for calculations, I don't find the manual approach onerous, plus I prefer not digging through menus.

Also, I find it easier to incorporate these techniques into a more complex calculation, rather than refocusing on using the menus. I didn't get into the TI, though I still have it as my friend ended up abandoning it, since they didn't like it either (they initially got it because they didn't want to learn RPN).

Actually, I also prefer the landscape format of the HP12C. I looked at the new 30B, but the fact that some important functions have been moved to menus, keeps me using the 12C.


#37

I suppose we have to go with what is best for us personally. I don't have a problem with that, either.

I prefer using a 30b over either the TI or the 12c. The 30b combines elegance of RPN with a robust feature set. Because I use my calculator for so much more than what the function set of the 12c provides, it is essential that I have features that do what I need. The only reason why the 30b has so many features in menus is simply because the sheer number of features prevents it from having all the features on the keyboard similar to the 12c. By the way, what are the important functions do you use that have moved to menus?

I do like the landscape format of the 12c, but I also like the portrait format of the 30b, as well. This isn't a deal breaker for me.

If you don't mind me asking, what more complex calculation are you taking about regarding the techniques for interest conversion? I'm interested in knowing more.

Regards,

Mark


#38

Mark,

I am not familiar with asynchronous compounding so I looked it up and found an interesting paper, not sure if you have seen it:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1001145&http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBMQFjAA&url=http%3A%2F%2Fpapers.ssrn.com%2Fsol3%2FDelivery.cfm%2FSSRN_ID1001145_code341122.pdf%3Fabstractid%3D1001145%26mirid%3D1&rct=j&q=asynchronous%20interest%20compounding&ei=Y0aMTeLLEoyCvgOy55SeDQ&usg=AFQjCNH4cOyfx96ONM4CB1JoK8OMxofl8Q

Anyway, the calculations I refer to are just general calculations where part involves converting rates. For example, swap rates where different conventions are used.

The layout of the 30B I dislike, compared to the 12C is as follows:

- STO key is shifted - I use STO/RCL a lot.

- y/x and 1/x also shifted - used a lot for interest calculations.

- Stat functions and Day changes buried in menus (as I understand it).

(Sorry if formatting is off, program doesn't like carriage returns).

Other differences I don't remember at present, but I wish they had an extra row of keys, and an extra shifted function set (like the 12C with the f and g shifts)

I also don't understand why they have trig functions on the main keys - if anything, these should be in menus. I mean, I haven't seen NPV functions prominently used on a scientific calculator.

Granted, the 30B may be simpler to use, but for everyday use as a supplement to a computer, I prefer the 12C.


#39

Remember a couple of things:

1) The keyboard of the 30b can be fairly easily redefined to "assign" a function in a menu to a key location. If you don't like the trig functions (which I suspect are there to let people KNOW they are there), and would prefer to have DATE and DDAYS on the keyboard instead, that is easy enough to do. Make the machine like you want it. Same thing with STAT functions. Want mean and standard deviation on the keyboard? Easy. This is described in the 30b learning modules with examples.

2) After having used the 12c for nearly 30 years, authored a textbook, and even taught college classes in finance with it, I'm well aware of doing things the "periodic interest" way as well as converting interest rates the way the 12c requires. However, I do believe that interest rate conversions are easier done with the ICONV approach on the 30b.

3) The shifted STO issue is one that is brought to HP's attention quite a bit at HHC conferences. It seems the view is that people tend to store less often than recall, so they do it this way.

4) The 30b is the first HP financial model that a college student could buy and use for all their classes...business, biology, chemistry, math, etc. That's one reason it is done as an "all in one" model.

5) Keep in mind the incredible extra features the 30b has compared to my beloved 12c. Such as...

Built-in probability distributions and inverses for FOUR distributions. Wow. Standard error of the mean, covariance (a first!), multiple regression models, black scholes, MIRR, and lots more.

I understand your dislikes. Truly. I think many of them can be "fixed" using the abilities of the 30b.

I rarely pick up my 12c any longer. I cried a lot at first, but much less now. :-)


#40

Gene,

One of the great things about the 12C is it's ubiquity in finance, so you can pick up any 12C on someone's desk and use it, without worrying about key assignments. That is a disadvantage of the 30B, in that you could use a 30B without knowing that functions have been reassigned.

At least the HP41 series had an overlay with adhesive labels to show function reassignments.


#41

I don't think it is a disadvantage of the 30b if one is doesn't use top-level or shifted keys when doing the assignments... All of my functions and programs that I need assigned to keys are assigned using shift-hold instead of shift. Plus, it really isn't reassigning, because the parent location of the function usually stays the same. Meaning, for example, that Pi, probability distributions, etc, will still be in the math menu even if you assign them to a key.

I would agree that if you assign functions as being top-level or shifted, then it might create some confusion. However, having them be shift-hold functions would make no one know any differently.

Mark

Edited: 1 Apr 2011, 2:19 a.m.


#42

Mark, I agree that the shift-hold key plane makes the most sense.

For example, I have the inverse trig functions "assigned" to the shift-hold trig key locations. Work like a charm.

#43

Quote:
I don't think it is a disadvantage of the 30b if one is doesn't use top-level or shifted keys when doing the assignments... All of my functions and programs that I need assigned to keys are assigned using shift-hold instead of shift. Plus, it really isn't reassigning, because the parent location of the function usually stays the same. Meaning, for example, that Pi, probability distributions, etc, will still be in the math menu even if you assign them to a key.
Mark

What I mean is that if I pick up someone else's 30B, I don't know how their functions are set up, and I probably cannot use it the way that I have set mine up. Even if I use mine without assignments, it is possible that their calculator has been customized.

This is a disadvantage.

In a commercial environment (i.e. bank, brokerage house, etc) people often pick up any calculator on a desk.

#44

Quote:
.... so you can pick up any 12C on someone's desk and use it,

Exactly! I often do exactly this as do so many other people. I think that this is exactly the reason why it's still such a big seller for HP after almost 30 years.

It's a standard, important desk accessory in finance, much like a stapler.

#45

I agree the 12C would be my choice.. I've been auditing some of the CFP courses from Boston University, and found the 12C to be quite adequate, and likely faster than the TI.

#46

Quote:
From my reading it appears that the new 12CP is as fast as the TI.

Don't know about the speed relative to the TI. But AFAIK the only new 12CP(latinum) is the one with the black body and brushed "chrome" bezel. The original 12CP was all chrome. I don't think there is any speed difference between the two.

OHOH the new12C with two cells is significantly faster.

Quote:
The input method is OK, he tried RPN on my 35S and 30b and he is open to learning it.

OK, but don't forget the 12CP has both RPN and ALG. The 12C is only RPN.

#47

Quote:
OHOH the new12C with two cells is significantly faster.

I am getting confused here, sir. So currently there are two 12C versions?

#48

There's the original 12c, which has always been RPN only. It has the gold-colored bezel. This was updated a couple years ago with a new processor which runs many times faster than the older version.

Then there's the 12CP (Platinum), which has both RPN and algebraic modes. The first version of this was all silver-colored on the front. It came out about 7(?) years ago. Then it was revised about 4 years ago to have a black keyboard and silver bezel. This one is faster than the original 12C above, but not nearly so fast as the upgraded 12C.

There's a huge amount of info on these variations in previous posts on this forum, but here you have it in a nutshell.


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