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CFALA

 

Review:

 

Tips

 

for

 

using

 

the

 

TI

 

calculator

2/9/2015

By

 

David

 

Cary

11

Viewing

 

and/or

 

Correcting

 

Cash

 

Flow

 

for

 

inputs

 

for

 

NPV

 

and

 

IRR

After

 

inputting

 

the

 

Cash

 

Flows

 

for

 

an

 

NPV

 

or

 

IRR

 

calculation,

 

you

 

can

 

see

 

the

 

values

 

by

 

going

 

back

 

to

 

the

 

[CF]

 

key

 

and

 

use

 

the

 

arrows.

  

For

 

example,

 

FØ_

 

is

 

used

 

if

 

the

 

cash

 

flow

 

is

 

repeated

 

several

 

years

 

in

 

a

 

row.

You

 

can

 

correct

 

an

 

CF

 

input

 

when

 

you

 

find

 

an

 

error

 

by

 

using

 

the

 

enter

 

key.

 

For

 

example,

 

assume

 

you

 

entered

 ‐

10

 

for

 

CF

0

when

 

it

 

should

 

have

 

been

 ‐

1000.

[CF]

Shows

 

CFo

[

]

Shows

 

CØ1

[

]

Shows

 

FØ1

[

]

Shows

 

CØ2

Etc…

Key

Shows

[CF]

CFo =

 ‐

10

1000[

][ENTER]

CFo=

1000

You

 

can

 

use the

 

down

 

arrows

 

to

 

find

 

and

 

correct

 

any

 

other

 

cash

flow

 

errors.

CFA Society Los Angeles

21

Cash

 

Flows

Note:

 

on

 

the

 

exam

 

they

 

may

 

try

 

a

 

trick:

Assume

 

the

 

cash

 

flows

 

are

CF

0

=

 ‐

1000,

 

CF

1

=

 

100,

 

CF

2

=

 

200,

 

CF

3

=

 

0,

 

CF

4

=

 

400,

 

CF

5

=

 

500.

You

 

MUST

 

enter

 

CF

3

as

 

0

 

or

 

the

 

remaining

 

cash

 

flows

 

will

 

be

 

for

 

the

 

wrong

 

periods

 

and

 

you

 

will

 

get

 

the

 

wrong

 

answer!

CFA Society Los Angeles

22

Summary of Contents for TI BA II Plus

Page 1: ...CFA Spring 2015 dcary dcary com helpful if you put CFA Review in subject line Using the TI BA2 Notes by David Cary These should help you be more efficient with your calculator For some of the topics I...

Page 2: ...geles 4 BASIC SETUP To set the number of decimal places 4 Keys Display Comments 2nd FORMAT DEC 2 00 Current setting 4 ENTER DEC 4 0000 New setting 6 ENTER DEC 6 000000 New setting etc CE C 6 000000 Re...

Page 3: ...e TI BAII into AOS Algebraic Operating System 5 CFA Society Los Angeles 6 USING CHN OR AOS The default setting in your calculator is probably Chn which stands for chaining Calculations are done in the...

Page 4: ...h I stay with AOS 7 CFA Society Los Angeles 8 USING MEMORIES Your calculator has 10 easily accessible memories 0 to 9 You can store numbers in a memory by pressing STO n where n in the number of the m...

Page 5: ...MEANS AND COVARIANCES OF TWO ASSET PORTFOLIO Example from D Cary s Level I CFALA review lecture notes SS 2 Reading 8 The question is to find the expected return rp and the variance and standard devia...

Page 6: ...d deviations to get covariance for the third part 11 CALCULATING MEANS AND COVARIANCES OF TWO ASSET PORTFOLIO 1 2 w 75 25 r 20 12 var 625 196 Covar 120 CFA Society Los Angeles 12 2 USING PARENTHESES C...

Page 7: ...s 13 CALCULATING MEANS AND COVARIANCES OF TWO ASSET PORTFOLIO 1 2 w 75 25 r 20 12 var 625 196 Covar 120 CFA Society Los Angeles 14 WHICH METHOD TO USE I like AOS For the simpler calculations you can d...

Page 8: ...each period Note The BEG key is above the PMT key Calculator Hints BEG mode CFA Society Los Angeles Calculator Hints of Pmts Yr While I prefer to adjust N and I directly the TI can be set to do the c...

Page 9: ...cash flows 17 CFA Society Los Angeles 18 PV OF UNEVEN CASHFLOWS Key Strokes Explanation Display CF 2nd CLR WORK Clear CF Registers CF0 0 00000 0 Enter Initial Outflow 0 CF0 0 00000 100 Enter Enter CF...

Page 10: ...s Angeles 20 NPV IRR OF UNEVEN CASH FLOWS Key Strokes Explanation Display CF 2nd CLR WORK Clear CF Registers CF0 0 00 1000 Enter Initial Outflow CF0 1000 00 100 Enter Enter CF1 C01 100 00 200 Enter En...

Page 11: ...hen you find an error by using the enter key For example assume you entered 10 for CF0 when it should have been 1000 CF Shows CFo Shows C 1 Shows F 1 Shows C 2 Etc Key Shows CF CFo 10 1000 ENTER CFo 1...

Page 12: ...inputted values by going into DATA mode and then using up or down arrows TI BAII and Pro On Screen 2ND Data X01 0 0000 Opens Input 2ND CLR WORK X01 0 0000 Clears Memories 13 5 ENTER X01 13 5000 Enter...

Page 13: ...0 Mean r 4 90 StDev s 22 99 3 Coefficient of Variation s r CV 22 99 4 90 4 69 4 Sharpe r rf s 4 90 3 0 22 99 0 083 6 Geometric and Harmonic Mean Using the Statistics Function for the calculation is af...

Page 14: ...86 Converts to Log Enters first value 3 LN ENTER X02 1 0986 Converts to Log Enters second value 4 LN ENTER X03 1 3863 Converts to Log Enters third value 6 LN ENTER X04 1 7918 Converts to Log Enters fo...

Page 15: ...5 0000 Number of observations x 0 2258 Gets average of reciprocals 1 x 4 4295 The reciprocal of the average reciprocal The Answer Data 3 3 4 6 22 CFA Society Los Angeles 29 Viewing and or Correcting...

Page 16: ...es will be stable and if so there is a 60 probability that EPS 2 20 and a 40 probability that EPS 2 00 Note Actual calculator steps included following next slide 31 Example from Level I SS 2 Reading 8...

Page 17: ...faster and simpler I include the 1 V method both as an alternative and so you can see it being used CFA Society Los Angeles 34 34 Keys Using STAT Display 2nd DATA 2nd CLR WORK X 1 0 0000 Clear Memori...

Page 18: ...d x 120 This can be useful for combination calculations To select a subset of 3 items out of 5 5C3 5 5 3 3 10 Your TI has a built in function for this 2nd nCr 5C3 5 2nd nCr 3 10 CFA Society Los Angele...

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