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What does nominal value mean?

What does nominal value mean?

The nominal value is the original stated value of a security or asset before it undergoes time value calculations that may change its market value.

The nominal value is also known as face value when it refers to the value stated on a bond or other issued security. Taking accrued interest or time value into account for issued securities will give you the market value, but the nominal value will not change.

It can also be used in reference to the current value of assets before they are adjusted for inflation in the future. In terms of assets adjusted for inflation, the nominal value remains constant but the real value (e.g. buying power) will decrease with more inflation.

Keywords: inflation, bonds, security, nominal yield,