Face value: Difference between revisions
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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. | 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. | ||
== See also == | == See also == | ||
Revision as of 14:02, 27 April 2016
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.
