Quick Definition

Nominal value refers to the face value of money or securities without adjustment for inflation or other factors that affect value over time.

Examples

• 1A bond with a nominal value of $1,000 will always be redeemed at that amount, regardless of inflation.
• 2An annual nominal interest rate of 5% does not account for inflation, which might be 2%, resulting in a real interest rate of 3%.
• 3The nominal GDP of a country is calculated without adjusting for inflation, unlike real GDP which is inflation-adjusted.
• 4A stock's nominal value is its stated face value, often set at a minimal amount like $0.01 per share, which does not reflect market value.

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