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 ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center