Sunday, December 26, 2010

Face Value

Face value is the amount that a bond issuer is obligated to pay at the maturity of the bond. Typically the face value of a bond is the same amount as the initial investment e.g. $1000, the notable exception to this is zero-coupon bonds i.e. bonds that do not pay coupons and thus have all the interest payments embedded in the final maturity value (with the initial amount being the current "present value" of the future payment).

Synonyms: Principal, Par value
 
Comments?
If you have any questions, or disagree with the definition, or if you have anything to add then please do add your comments in the box below.

No comments:

Post a Comment