face value

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Face value

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

face value

See par value.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

face value

see PAR VALUE 1.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Therefore, in this case, the clean price approximately equals the par value:
For example, if the annual coupon rate is 10 percent on a bond that makes semiannual payments (R/2 = 5 percent), the error as a percentage of the par value is in the range -0.031 percent to 0, depending on the value of [theta].
At the ex coupon date, regardless of how the par or principal value is distributed, a security will sell for the remaining par value if the contract rate equals the yield to maturity.
Under the old system, a country in deficit that was losing reserves was pushed more quickly than a country in surplus to deal with its balance of payments problem, either through demand-management policy, or by adjusting the par value of its currency.
The Committee of Twenty recognized that the international monetary system was in flux and that it might be particularly difficult in the circumstances of the time to return to a par value system.
Under the revised article, completed in 1976, a return to a generalized par value system, if deemed appropriate, requires an 85 percent majority vote of the IMF membership, effectively giving the United States a veto over such a move.
An eventual return to a par value system was assumed, and intervention was viewed as a way to maintain order in the interim.