Face Value

Categories: Mutual Funds, Options, Stocks, Fundamental Analysis, Bonds and Treasuries, Futures, Investing and Trading, Legal, ,

Face value, or par value, is the dollar value of a bond or note, generally $1,000. That is the amount the issuer has borrowed, usually the amount you pay to buy the bond at the time it is issued, and the amount you are repaid at maturity, provided the issuer doesn't default. However, bonds may trade at a discount, which is less than face value, or at a premium, which is more than face value, in the secondary market. That's the bond's market value, and it changes regularly, based on supply and demand. The death benefit of a life insurance policy, which is the amount the beneficiary receives when the insured person dies, is also known as the policy's face value.