Questions: Par value is the initial value of the bond, commonly know as the value.

Par value is the initial value of the bond, commonly know as the value.
Transcript text: Par value is the initial value of the bond, commonly know as the $\square$ value.
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Solution

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The answer is: face value.

Explanation:

  • The term "par value" of a bond is commonly referred to as the "face value." This is the amount that the issuer agrees to pay back to the bondholder at maturity. It is the nominal value of the bond and is typically set at $1,000 for corporate bonds, although it can vary.
  • The face value is important because it determines the bond's interest payments, which are usually a percentage of the par value.
  • Other terms like "market value" or "book value" are not synonymous with par value in the context of bonds. Market value refers to the current trading price of the bond, which can fluctuate based on interest rates and other factors, while book value is an accounting term that refers to the value of an asset as recorded on the balance sheet.

In summary, the par value of a bond is commonly known as the face value.

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