Question

Define the face value. Choose the correct answer below.
A. The simple interest rate that the issuer promises to pay.
B. The status of the secondary bond market.
C. The date on which the issuer promises to repay the money.
D. The price that must be paid to the issuer to buy it at the time it is issued.

Answer 1

Option D is correct the face value is the price that must be paid to the issuer to buy it at the time it is issued.

What is face value?

If the bond issuer doesn't default, face value, also known as par value, is the sum that is paid to a bondholder at the bond's maturity date. Bonds offered on the secondary market do, however, change in response to interest rates.

Therefore Option D is correct the face value is the price that must be paid to the issuer to buy it at the time it is issued.

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