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What is Par Value?

Par value is the nominal value of a security (such as a stock or a bond) that is typically indicated on the certificate of ownership.

Par value is most often associated with bonds, and refers to the amount that will be returned to the investor at the bond’s maturity. Par value of bonds is generally $100 or $1,000.

Bonds traded on the open market are not generally bought and sold at par value, as they typically trade at a premium or a discount to par. Bond prices are influenced by interest rates, and have an inverse relationship with them.

Keywords: stocks, bonds, discounting, inverse correlation, premium, par value,