What face value means in bond investing?
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phil
Apprentice
Joined: 24 Jan 2006
Posts: 2
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 Posted: 09/01/08 - 06:44 Post subject: |
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| Still I am totally new at bond investing and this way I am trying to get some information before I get myself into it. My friends are not really reliable sources of information and I am not really ready to turn to them since they most often talk more than they really know. Well, you are strangers, but I have more belief in you, you have no reasons to misinform me. At this moment I would like to know what face value means in bond investing. I know what face value really is, but when it comes to bond investing it has another meaning, right? |
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isa
Apprentice
Joined: 11 Jan 2007
Posts: 4
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| Posted: 10/01/08 - 00:31 Post subject: |
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| It is quite hard to explain, maybe I should use an example. If you have to sell a bond before maturity comes, than face value may be changed. That is, it is still the same but, depending on movements of interest rates, the true value of the bond may not be the same as its face value. So it is not much different from face value by the definition it has when it comes to currencies, for example. Yet, when bonds are getting closer to maturity it is normal that its actual value gets closer to the face value. |
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