Nominal Value

Description of Nominal Value. Explanation.

Definition Nominal Value. Description.

The Nominal Value is an economic term for the value of an investment or any asset expressed in the money of the day. Because inflation results in assets to lose their value over time, nominal figures can be misleading when used to compare values in different periods. It is better to compare their real value, by adjusting the nominal figures to remove the inflationary distortions. See: Net Present Value

Also, the term is used in finance to indicate the value ascribed to a security (stocks, shares, bonds etc) when it is first authorized and issued by a company. See also: Face Value. A share's nominal value bears no relation to a share's market value. When referring to capital goods, nominal value is also referred to as "book value".

Compare with: Redemption Value  |  Maturity Date  |  Yield to Maturity  |  Net Present Value

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End of description Nominal Value. An explanation.