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Face value is the value of a coin, bond, stamp or paper money as printed on it by the issuing authority. Learn how face value differs from market value, legal value, and other concepts in finance, insurance, and communication.
Notional amount is the nominal or face amount used to calculate payments on a financial instrument, such as a bond, a swap, or an option. Learn how notional amount is defined and applied in different contexts, such as interest rate swaps, total return swaps, equity options, and foreign currency derivatives.
Par value is the stated or face value of a financial instrument, such as a bond, a stock, or a currency. Learn how par value affects the price, the legal capital, and the tax treatment of different types of securities.
Learn the definitions and differences between Macaulay duration and modified duration, two measures of the time and price sensitivity of financial assets with fixed cash flows. Macaulay duration is the weighted average maturity of cash flows, while modified duration is the rate of change of price with respect to yield.
Nominal value is the value measured in terms of absolute money amounts, while real value is the value adjusted for inflation and purchasing power. Learn how to calculate and compare real and nominal values, and see examples of real and nominal wages, GDP, and interest rates.
Learn about the meaning, types and history of denomination in currency, such as coins and banknotes. Find out how denomination is related to subunit, super unit, decimal and non-decimal systems, and display on coins.
A coupon is the interest payment received by a bondholder from the date of issuance until the date of maturity of a bond. Learn about the history, valuation, and types of bonds, including zero-coupon bonds that pay no coupons and have a price less than their face value.
Learn how to estimate the theoretical fair value or intrinsic worth of a bond using different methods and approaches, such as present value, relative price, arbitrage-free pricing, and stochastic calculus. Compare and contrast the concepts of clean and dirty price, yield to maturity, and credit spread.