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.

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%.

RELATED TERMS
  1. Market Value

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

    The nominal value or dollar value of a security stated by the ...
  3. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic ...
  4. Real Rate Of Return

    The annual percentage return realized on an investment, which ...
  5. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
  6. Nominal

    An unadjusted rate, value or change in value. This type of measure ...
Related Articles
  1. What's the difference between book and ...
    Investing

    What's the difference between book and ...

  2. Using The Price-To-Book Ratio To Evaluate ...
    Forex Education

    Using The Price-To-Book Ratio To Evaluate ...

  3. Curbing The Effects Of Inflation
    Bonds & Fixed Income

    Curbing The Effects Of Inflation

  4. Introduction To Inflation-Protected ...
    Options & Futures

    Introduction To Inflation-Protected ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center