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%.

RELATED TERMS
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  2. Nominal

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  3. Face Value

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RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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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