How Many decimal places 4 or 5?

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vicky_cool400

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How many decimal places are we supposed to use 4 or 5? Since in scswer q bank i am getting wrong answers which have difference of 100-200 $ becuase of it
 
aren’t you better off doing the rounding after the fact. keep it at the max (9 e.g.) let the calculator do its bit, then you round based on the answers.
 
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It’s not about decimal places, it’s about significant digits.
If a number is 123,456.78 you can safely round to 123,457
If a number is 0.00000000001234 then you don’t want to round this at all.
 
The choices in the exam will give you a hint. If the choices are 2 decimals - 2 would suffice.
 
If your answers are 100-200 dollars off, out of 10 million, that’s okay. The answers won’t be that close together. CFAI is not testing how good you are at rounding numbers.
If you’re 100-200 dollars off of 1000, then you’re probably just doing the problem wrong.
Personally, I have a TI BA 2 Plus, and I always set it at 9. The calculator will automatically round it off, or take it to 8 digits, whichever is shorter.
 
I always always set it to 4. As the above post says, sometimes the answer choices give you a clue.
But I have known people leaving it at 4 and never having issues.. So I would say 4 is safe and 9 is taking precision a bit too far!
 
Don’t worry about rounding. Firstly as already mentioned the answers will not be so close that a rounding error should make a difference (this also kind of answers the should I continously compound or not question) and secondly your calculator stores the addtiional digits in any case. I use a TI BAII Pro it’s set to 6 digits cause that’s what I use at work, but when I calculate a figure and want to see the decimals further down the scale they’re there if I multiply by 10 or 100 or 1,000.
So don’t sweat the decimals, worry about up the bid down the ask or pension plan accounting or something else that’s actually important and will make a difference.
 
Yeah i didnot face any issue in cfa book questions. This problem occcured in scswer q bank only. Scswer is too much calculation centric many a times
 
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