The face value of a note is also known as the: Group of answer choices trading value. unsecured amount. market value. principal.
Question
The face value of a note is also known as the:
- trading value.
- unsecured amount.
- market value.
- principal.
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.
Similar Questions
Notes receivable are recognized in the accounts atGroup of answer choicescash (net) realizable valueface value.gross realizable valuematurity value
The interest collection is computed by multiplying the nominal interest with the face value of the note.Group of answer choicesTrueFalse
The following are required information on a note, EXCEPT:Group of answer choicesInterest rate and discount ratePayee and makerFace valueIssue date and term
The interest on noninterest-bearing notes is the difference between its present value and its face amount at maturity.Group of answer choicesTrueFalse
Fill in the Blank QuestionFill in the blank question.Face value is the dollar amount the bondholder will receive at the bond's date.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.