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FRM Calculator Guide 2025: BA II Plus Tutorial for Every Calculation

Master every calculator function you'll need for the FRM exam with step-by-step instructions and practice examples.

📅 Updated January 2025 ⏱️ 22 min read 🧮 Calculator Tutorial
📋 Table of Contents

Calculator proficiency can make or break your FRM exam performance. With 100 questions in 4 hours (just 2.4 minutes per question), you simply cannot afford to fumble with calculator functions or make input errors. The difference between a candidate who's mastered their calculator and one who hasn't can easily be 10-15 questions—enough to determine pass or fail.

This guide covers every calculator skill you'll need for both FRM Part I and Part II. We'll use the Texas Instruments BA II Plus throughout, as it's the most popular choice among FRM candidates. Each section includes step-by-step keystrokes, practice problems, and tips for speed and accuracy.

Approved FRM Calculators

GARP permits only specific calculator models on the FRM exam. Using an unapproved calculator will result in disqualification.

Calculator Approved? Notes
Texas Instruments BA II Plus ✅ Yes Most popular choice, algebraic entry
Texas Instruments BA II Plus Professional ✅ Yes Larger display, same functions
Hewlett Packard 12C ✅ Yes Uses RPN (Reverse Polish Notation)
Hewlett Packard 12C Platinum ✅ Yes Faster processor, same RPN
HP 12C 25th Anniversary Edition ✅ Yes Cosmetic variant of 12C
HP 12C Prestige ✅ Yes Premium finish variant
Any other calculator ❌ No Including TI-83, TI-84, HP 10BII, Casio
💡 BA II Plus vs HP 12C: Which to Choose?

Choose BA II Plus if: You want intuitive algebraic entry (type expressions as you'd write them), easier learning curve, and dedicated statistics functions.

Choose HP 12C if: You're already familiar with RPN from accounting or prefer its tactile keyboard. Once mastered, some users find RPN faster.

Our recommendation: The BA II Plus is better for most FRM candidates. Its statistics worksheet and algebraic entry make FRM calculations more straightforward.

Essential Calculator Setup

Before starting your FRM preparation, configure your BA II Plus with these critical settings:

⚙️ One-Time Setup (Do This Now)
1 Set decimal places to 4: Press 2ND FORMAT → Enter 4 → Press ENTER → Press 2ND QUIT
2 Set payments per year to 1: Press 2ND P/Y → Enter 1 → Press ENTER → Press 2ND QUIT
3 Set to END mode (not BGN): Press 2ND BGN → If "BGN" shows, press 2ND SET to toggle to END
4 Clear all memory: Press 2ND MEM 2ND CLR WORK
⚠️ Critical: P/Y Setting

The P/Y (payments per year) setting is the most common source of calculator errors on the FRM exam. If P/Y is set to 12 (monthly), your annual interest rate calculations will be wrong. Always verify P/Y = 1 before starting the exam. Press 2ND P/Y to check.

Time Value of Money (TVM) Calculations

TVM functions are foundational for bond pricing, loan calculations, and present/future value problems throughout the FRM curriculum.

TVM Keys Reference
N Number of periods
I/Y Interest rate per period (%)
PV Present value
PMT Payment amount
FV Future value
CPT Compute (solve for)
Present Value of a Bond Part I
📝 Example Problem
Calculate the price of a 5-year bond with a 6% annual coupon, $1,000 face value, and 8% yield to maturity.
1
2ND CLR TVM
Clear previous TVM values
2
5 N
Enter 5 years (periods)
3
8 I/Y
Enter 8% yield to maturity
4
60 PMT
Enter $60 annual coupon (6% × $1,000)
5
1000 FV
Enter $1,000 face value
6
CPT PV
Compute present value
✅
Result: -920.15
(Negative indicates cash outflow—the price you pay)
Yield to Maturity (YTM) Part I
📝 Example Problem
A 3-year bond with a 5% annual coupon and $1,000 face value is trading at $970. What is the YTM?
1
2ND CLR TVM
2
3 N
3
970 +/- PV
Enter -970 (negative for cash outflow)
4
50 PMT
5
1000 FV
6
CPT I/Y
✅
Result: 6.0818%

Statistics Functions

The BA II Plus has a powerful statistics worksheet essential for calculating mean, standard deviation, variance, and more—all critical for FRM quantitative analysis.

Statistics Worksheet Keys
2ND DATA Enter data mode
2ND STAT View statistics
↑ ↓ Navigate entries
2ND CLR WORK Clear worksheet
Mean and Standard Deviation Part I
📝 Example Problem
Calculate the mean and sample standard deviation of these portfolio returns: 5%, 8%, -2%, 12%, 7%
1
2ND DATA
Enter data worksheet
2
2ND CLR WORK
Clear previous data
3
5 ENTER ↓ ↓
Enter 5, skip Y01, move to X02
4
8 ENTER ↓ ↓
Enter 8, move to X03
5
2 +/- ENTER ↓ ↓
Enter -2, move to X04
6
12 ENTER ↓ ↓ 7 ENTER
Enter 12 and 7
7
2ND STAT
View statistics (shows n=5)
8
↓
Navigate: x̄ (mean) = 6
9
↓
Navigate: Sx (sample std dev) = 5.1478
✅
Mean: 6.00%  |  Sample Std Dev: 5.1478%
🎯 Statistics Worksheet Navigation

After pressing 2ND STAT, use ↓ to navigate through:

  • n = number of data points
  • x̄ = mean of X values
  • Sx = sample standard deviation
  • σx = population standard deviation
  • ȳ, Sy, σy = Y statistics (for regression)

Bond Duration and Convexity

Duration and convexity calculations require combining TVM functions with manual computations. Here's how to approach them efficiently.

Macaulay Duration Part I
📝 Example Problem
Calculate the Macaulay duration of a 3-year bond with 5% annual coupon, $1,000 face value, and 6% YTM. Current price is $973.27.
Formula:
MacDur = [1×PV(CF₁) + 2×PV(CF₂) + 3×PV(CF₃)] / Price
1
Calculate PV of each cash flow:
• Year 1: 50/1.06 = 47.17
• Year 2: 50/1.06² = 44.50
• Year 3: 1050/1.06³ = 881.60
2
Weight by time period:
1×47.17 + 2×44.50 + 3×881.60 = 2,780.97
3
Divide by price:
2,780.97 / 973.27 = 2.857 years

Calculator sequence for each PV:

50 ÷ 1.06 = → 47.17
50 ÷ 1.06 yˣ 2 = → 44.50
✅
Macaulay Duration: 2.857 years

Value at Risk (VaR) Calculations

VaR calculations are central to FRM. Here's how to handle them efficiently on your calculator.

📊 Critical Z-Scores to Memorize
90% Confidence
1.282
95% Confidence
1.645
97.5% Confidence
1.960
99% Confidence
2.326
99.5% Confidence
2.576
99.9% Confidence
3.090
Parametric VaR (Single Asset) Part I & II
📝 Example Problem
Calculate the 10-day 99% VaR for a $5 million portfolio with daily volatility of 1.5%.
Formula:
VaR = Portfolio Value × σ × z × √T
1
10 √x
Calculate √10 = 3.1623
2
× 2.326
Multiply by z-score for 99%
3
× 0.015
Multiply by daily volatility (1.5% as decimal)
4
× 5000000 =
Multiply by portfolio value
✅
10-day 99% VaR: $551,631
Two-Asset Portfolio VaR Part I
📝 Example Problem
Portfolio: $3M in Asset A (σ=2%) and $2M in Asset B (σ=3%). Correlation = 0.4. Calculate 1-day 95% VaR.
Portfolio Variance Formula:
σ²ₚ = w²ₐσ²ₐ + w²ᵦσ²ᵦ + 2wₐwᵦσₐσᵦρ
1
Calculate dollar volatilities:
• Asset A: $3M × 0.02 = $60,000
• Asset B: $2M × 0.03 = $60,000
2
Portfolio variance:
60000 x² + 60000 x² +
2 × 60000 × 60000 × 0.4 =
= 10,080,000,000
3
√x
Portfolio σ = $100,399
4
× 1.645 =
Multiply by 95% z-score
✅
1-day 95% VaR: $165,157

Option Greeks & Black-Scholes

While you won't calculate complete Black-Scholes on the exam (too time-consuming), you'll need to compute partial inputs and interpret Greeks.

d₁ and d₂ Calculation Part I
📝 Example Problem
Calculate d₁ and d₂ for: S = $50, K = $52, r = 5%, σ = 30%, T = 0.5 years
Formulas:
d₁ = [ln(S/K) + (r + σ²/2)T] / (σ√T)
d₂ = d₁ - σ√T
1
Calculate ln(S/K):
50 ÷ 52 = LN
Result: -0.0392
2
Calculate (r + σ²/2)T:
0.05 + ( 0.3 x² ÷ 2 ) × 0.5 =
Result: 0.0475
3
Calculate σ√T:
0.3 × 0.5 √x =
Result: 0.2121
4
Calculate d₁:
( -0.0392 + 0.0475 ) ÷ 0.2121 =
d₁ = 0.0391
5
Calculate d₂:
0.0391 - 0.2121 =
d₂ = -0.1730
✅
d₁: 0.0391  |  d₂: -0.1730

Regression & Correlation

The BA II Plus can calculate regression coefficients directly using the statistics worksheet. This is essential for quantitative analysis questions.

Linear Regression (Slope & Intercept) Part I
📝 Example Problem
Estimate the regression Y = a + bX for: (X,Y) = (1,3), (2,5), (3,6), (4,8), (5,11)
1
2ND DATA 2ND CLR WORK
Enter and clear data worksheet
2
1 ENTER ↓ 3 ENTER ↓
Enter X01=1, Y01=3, move to X02
3
Continue entering all data pairs (X, then Y for each):
2, 5 → 3, 6 → 4, 8 → 5, 11
4
2ND STAT
Press ↓ repeatedly to find:
• a (intercept) = 0.90
• b (slope) = 1.90
• r (correlation) = 0.9934
✅
Regression: Y = 0.90 + 1.90X  |  r: 0.9934

Memory Functions

Memory functions let you store intermediate results, which is essential for complex calculations with multiple steps.

Memory Keys Reference
STO Store to memory
RCL Recall from memory
0 - 9 Memory locations (10 total)
2ND MEM Memory worksheet

Example: Store and Recall

  • Calculate 100 ÷ 1.05³ = 86.38, then STO 1 to save
  • Calculate something else...
  • Press RCL 1 to retrieve 86.38
💡 Pro Tip: Memory Strategy

Assign consistent memory locations for common values:
• M0: Portfolio value
• M1: Volatility or standard deviation
• M2: Interest rate
• M3-M9: Intermediate calculations

This consistency helps avoid errors when juggling multiple values in complex problems.

Speed Tips for Exam Day

With only 2.4 minutes per question, calculator efficiency is critical. These tips can save precious seconds:

⚡ Speed Optimization Tips
  • Memorize z-scores: Don't calculate—know 1.645 (95%), 1.96 (97.5%), 2.326 (99%) by heart
  • Use ANS key: The last result stays on screen. Chain calculations without re-entering.
  • Use memory aggressively: Store intermediate results rather than writing them down
  • Know your shortcuts: x² is faster than × then re-entering the number
  • Clear TVM before each problem: Old values cause errors. Make 2ND CLR TVM automatic
  • Practice without looking: You should be able to enter common sequences by muscle memory
  • Estimate first: A quick mental estimate helps catch gross calculator errors

Common Calculator Errors to Avoid

❌ Most Common Calculator Mistakes
  1. P/Y not set to 1: Causes all TVM calculations to be wrong. Always verify before starting.
  2. Forgetting sign conventions: PV and FV should have opposite signs. Cash outflows are negative.
  3. Not clearing TVM: Old values from previous problems contaminate new calculations.
  4. Percentage vs decimal confusion: Is it 5 or 0.05? Know which inputs use which format.
  5. Order of operations errors: Use parentheses explicitly when unsure.
  6. Using σₓ when you need Sₓ: Population vs sample standard deviation—know which the problem wants.
  7. Annual vs periodic rates: Match your I/Y to your N periods.
  8. Forgetting square root for time scaling: VaR scales with √T, not T.

Pre-Exam Calculator Checklist

Check How to Verify Correct Setting
P/Y setting 2ND P/Y 1
Decimal places 2ND FORMAT 4 (or 9 for floating)
END mode 2ND BGN No "BGN" indicator on screen
Memory cleared 2ND MEM 2ND CLR WORK All memories = 0
Fresh batteries Visual check / test calculations Strong display, no dimming
🎯 Final Calculator Advice

Calculator proficiency isn't about knowing obscure functions—it's about executing common calculations quickly and accurately under pressure. Practice until TVM, statistics, and basic operations are automatic. Time yourself on practice problems. The goal is to spend mental energy on understanding questions, not fumbling with buttons. Start practicing with your calculator from day one of your FRM preparation—not the week before the exam.

Practice Your Calculator Skills

Test your speed and accuracy with FRM practice questions