The face value of a note is also known as the: Group of answer choices trading value. unsecured amount. market value. principal.
Question
Solution
The face value of a note is also known as the principal.
Explanation
Face value refers to the nominal value of a financial instrument as stated on the document itself, which represents the amount that the issuer of the note will pay back to the holder upon maturity. It is a crucial concept in finance because it denotes the original value of the investment at the time it is issued, excluding any interest or additional gains. It is commonly seen on bonds, mortgages, and other debts, where the principal must be repaid at the end of the term. Other terms in the options, such as trading value or market value, relate to the current worth of that instrument in the marketplace, which can fluctuate due to various factors like interest rates and demand.
Final Answer
Principal.
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