Nominal Value

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DEFINITION of 'Nominal Value'

The stated value of an issued security. Nominal value in economics also refers to a value expressed in monetary terms for a specific year or years, without adjusting for inflation. When used in reference to securities, nominal value is also known face value or par value.

INVESTOPEDIA EXPLAINS 'Nominal Value'

The nominal value of a security, such as a stock or bond, remains fixed for the duration of its life. What fluctuates is the security's market value, which may be markedly different from its nominal value.

In economics, nominal values of measures, such as economic growth and personal income, are unadjusted for inflation. Adjusting nominal values for inflation gives rise to real values. For example, if a nation registers GDP growth of 5% in a given year and annual inflation is 2%, real GDP growth would be 3%.

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RELATED FAQS
  1. How can you calculate the difference between nominal value and real value of stock ...

    The nominal value, or book value, of a share is usually assigned when the stock is issued. Market value reflects what the ... Read Full Answer >>
  2. Is the nominal value of GDP a sufficient metric for measuring the economy's health?

    In economics, the nominal value of gross domestic product (GDP) is considered to be an insufficient metric for measuring ... Read Full Answer >>
  3. If markets give information on value through price, how can nominal values be out ...

    Nominal values may differ from market values or real values for many reasons. Inflation may continually increase the nominal ... Read Full Answer >>
  4. Under what circumstances is the nominal value out of line with the real value of ...

    The nominal value of stock shares is the actual face value when the shares are issued. This represents how much the stock ... Read Full Answer >>
  5. Is the nominal value of a security ever also the real value?

    Nominal value is the face value of a consumer good or service. Real values compare the values of different goods and services ... Read Full Answer >>
  6. What's the difference between book and market value?

    Book value is the price paid for a particular asset. This price never changes so long as you own the asset. On the other ... Read Full Answer >>
  7. The real rate of return is the amount of interest earned over and above the:

    a. discount rate.b. tax rate. c. inflation rate. d. risk-free rate of return. Answer: C Since the real rate of return measures ... Read Full Answer >>
  8. How do you calculate the percentage gain or loss on an investment?

    Calculating the percentage change of your investment is quite easy. All it takes is a little bookkeeping and either a simple ... Read Full Answer >>
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