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Par value (See Chapter 21 of the Vernimmen)
"Par value" (also called "Nominal value" or "face value") is the reference value of a financial instrument at issue. This is the Nominal value of a Share, and subsequently via trading the quoted Share price diverges and goes up or below the par value. Likewise, for a Debt instrument, the Market price will move to reflect factors, such as prevailing and forecast Interest rates, or the issuer's creditworthiness. As a result, the par value will only serve to determine the amount of Principal to be repaid by the borrower according to the pre-determined repayment schedule (also called Amortisation schedule).
Par value (See Chapter 21 of the Vernimmen)
"Par value" (also called "Nominal value" or "face value") is the reference value of a financial instrument at issue. This is the Nominal value of a Share, and subsequently via trading the quoted Share price diverges and goes up or below the par value. Likewise, for a Debt instrument, the Market price will move to reflect factors, such as prevailing and forecast Interest rates, or the issuer's creditworthiness. As a result, the par value will only serve to determine the amount of Principal to be repaid by the borrower according to the pre-determined repayment schedule (also called Amortisation schedule).
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