Nominal Value

AAA

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.

VIDEO

Loading the player...

BREAKING DOWN '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%.

RELATED TERMS
  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Nominal

    An unadjusted rate, value or change in value. This type of measure ...
  3. Face Value

    The nominal value or dollar value of a security stated by the ...
  4. Real Rate Of Return

    The annual percentage return realized on an investment, which ...
  5. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic ...
  6. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
Related Articles
  1. Investing Basics

    What is a Nominal Value?

    The nominal value of a security, such as a stock or bond, remains fixed for the duration of its life.
  2. Forex Education

    Using The Price-To-Book Ratio To Evaluate Companies

    The P/B ratio can be an easy way to determine a company's value, but it isn't magic!
  3. Bonds & Fixed Income

    Curbing The Effects Of Inflation

    Your investments suffer when general price levels rise. Learn how you can control the damage with IPSs.
  4. Options & Futures

    Introduction To Inflation-Protected Securities

    Inflation is an enemy to investors - except to those who invest in IPS, which guarantee a real rate of return with no credit risk.
  5. Retirement

    Inflation-Protected Annuities: Part Of A Solid Financial Plan

    If you worry about inflation and longevity risks, this may be the investment for you.
  6. Economics

    What Qualifies as Full Employment?

    Full employment is an economic term describing a situation where all available labor resources are being utilized to their highest extent.
  7. Investing Basics

    What are Class B Shares?

    Class B shares are one classification of common stock issued by corporations.
  8. Fundamental Analysis

    Is India the Next Emerging Markets Superstar?

    With a shift towards manufacturing and services, India could be the next emerging market superstar. Here, we provide a detailed breakdown of its GDP.
  9. Economics

    A Look at Greece’s Messy Fiscal Policy

    Investigate the muddy fiscal policy, tax problems, and inability to institute austerity that created the Greek crises in 2010 and 2015.
  10. Investing News

    The Brief: Where Is the Bottom?

    Where is the market going today after yesterday's bumpy ride?
RELATED FAQS
  1. In economics, what is an index number?

    Economists often make comparisons between sets of data across time. For example, a macroeconomist might want to measure changes ... Read Full Answer >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. 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 >>
  7. 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 >>
  8. 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 >>
  9. 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 >>

You May Also Like

Hot Definitions
  1. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  2. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  3. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  4. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  5. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
  6. Widow's Exemption

    In general terms, a widow's exemption refers to the amount that can be deducted from taxable income by a widow, thereby reducing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!