face value

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Face value

Face Value

The amount of money stated on a bond or (rarely) a stock certificate. For example, if a bond certificate says $1,000, the face value is $1000. Bonds pay the face value at maturity, and calculate coupons as a percentage of the face value. Many bonds are issued at their face value, though discount bonds are not. The face value is also called the par value or simply par.

face value

See par value.

Face value.

Face value, or par value, is the dollar value of a bond or note, generally $1,000.

That is the amount the issuer has borrowed, usually the amount you pay to buy the bond at the time it is issued, and the amount you are repaid at maturity, provided the issuer doesn't default.

However, bonds may trade at a discount, which is less than face value, or at a premium, which is more than face value, in the secondary market. That's the bond's market value, and it changes regularly, based on supply and demand.

The death benefit of a life insurance policy which is the amount the beneficiary receives when the insured person dies. It's also known as the policy's face value.

face value

see PAR VALUE 1.

face value

The value of an instrument (promissory note, bond, stock, etc.) as stated on the face of the instrument.The face value does not always equal the market value.

Example: A 5-year-old mortgage note with a face value of $100,000 and an amortization term of 20 years at 2.8 percent interest is worth far less than $100,000 for two reasons: (1) The principal balance is now a little under $80,000. (2) Why would anyone invest even $80,000 to earn 2.8 percent interest when he or she can get better returns in the marketplace? For both reasons, an investor would pay much less than the $100,000 face value to buy the mortgage.

References in periodicals archive ?
Universal life premiums fell 9%, face amount dropped 2%, and the number of policies sold was down 13%.
The UL policies sold rose 11%, and total UL face amount climbed 12%.
Let's look at a scenario involving a 77-year-old female who owns an insurance policy with a $900,000 face amount and a current cash surrender value of $68,296.
In an attempt to mitigate the gain recognition, Peracchi transferred to NAC, in addition to the encumbered properties, a personal note with a face amount of $1,060,000.
currency and that the landlord may draw all or any portion of the face amount of the letter of credit.
Delta has not extended the offer to exchange USD265,366,000 aggregate face amount of Class B Certificates, Series 2007-1 or USD220,103,000 aggregate face amount of Class C Certificates, Series 2007-1, also registered under the US Securities Act.
The new language includes a statement that "an insurer issuing a small face amount policy, where over the term of the policy the cumulative policy premiums paid may exceed the face amount of the policy, shall clearly and prominently disclose, on or before policy delivery, the length of time until the cumulative policy premiums paid may exceed the face amount of the policy.
As in the cash surrender value method, the difference between the carrying amount of the policy and its face amount is recognized as a gain at the death of the insured, although the amount of the gain is significantly reduced.
The Tax Court held that, because the purchasers were willing and able to pay cash in the year of sale and because the assignee bank was willing to accept the payment right at a nominal discount, the sellers had to realize the full face amount of the promise to pay less a four-percent discount in the year of sale under constructive receipt principles.
Sunbelt has a fungible layer of dynamic credit enhancement provided in the form of LOC, sized as the greatest of 1% of the face amount of all CP, 50% of the asset with the largest funded amount, or the amount determined by Vector CP.
Having been in and out of consideration for some 25 years, the Disclosure For Small Face Amount Life Insurance Policies Model Act saw action June 12 when it was unanimously approved by the Life Insurance and Annuities Committee at the National Association of Insurance Commissioners' Summer National Meeting in Boston.
However, to the extent the FMV is less than the face amount (as a result of factoring or of S's potential insolvency), S would recognize COD income on the difference between the FMV and the interest's face value.