Nominal value, sometimes also face value, par value

The amount at which a debt instrument – security or share – is denominated, as opposed to the market value of such securities. For interest and dividends, which are calculated as a percentage, the nominal value is always decisive. – In the case of money, the number of units in which a certain means of payment – coin, bill – is denominated. – In the case of an option contract, the size of the contract (unit of trading). – In the case of a derivative, the amount on which an interest calculation is based. – Sometimes also referred to as the net yield of an issue, roughly calculated as the money that flows into the treasury through the issuance of a security, less the expenses required for redemption (the amount of money the issuer received for each bond and the amount that it will repay upon redemption). In the specially tailored mathematical formulas, any gains due to inflation – the issuing company receives money with purchasing power from the subscribers of the security today and has to repay with less money with purchasing power – as well as the interest rate are taken into account accordingly.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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