What is the nominal value of a debt instrument?

stephan · Apprentice Joined: 02 Jul 2008 Posts: 4

There is this guy in the company who keeps telling us about his investments, as if somebody is interested. Most of the time he is just boring, but lately he got me interested into debt instruments, he is, as he says, sure that he had found a good opportunity, and he claims how he is searching for friend investors to join him, or something like that. He had also told me the amount of the nominal value of a debt instrument that he is going to demand, and I would like you to tell me what is it, so that I can know what I am dealing with.

myrlene · Apprentice Joined: 14 May 2005 Posts: 5

The nominal value is what you’ll establish to be the main debt, you can buy some debt instruments by one price, but their real value may be lot smaller than what you have paid for or, perhaps, it can be greater, if the debt is under a question mark. You will determine everything according to this nominal value, what is your interest rate going to be like, how fast will it grow or will it grow at all, it is the start point of debt determination in the future.