Face value: Difference between revisions
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imported>Administrator (CSV import) |
imported>Doug Williamson (Clarify.) |
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Face value or nominal value means the principal amount evidenced by a security certificate. | Face value or nominal value means the principal amount evidenced by a security certificate. | ||
The current market price of a discount instrument before its maturity is always less than the face value. | |||
For an interest bearing instrument, the face value is the amount on which interest is calculated. | For an interest bearing instrument, the face value is the amount on which interest is calculated. | ||
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* [[Par]] | * [[Par]] | ||
* [[Shallow discount bond]] | * [[Shallow discount bond]] | ||
Revision as of 18:49, 19 April 2015
Face value or nominal value means the principal amount evidenced by a security certificate.
The current market price of a discount instrument before its maturity is always less than the face value.
For an interest bearing instrument, the face value is the amount on which interest is calculated. So the amount repayable at maturity is given by the face value plus accrued interest. The current market price of an interest-bearing instrument before its maturity may be less than, more than, or the same as the face value; depending on current market yields.
