Etymology
Meaning
The face value of a financial instrument, such as a stock or bond, is the nominal or par value printed on the certificate. It represents the amount of money that the issuer originally received for the instrument and is distinct from its market value.
Origin
In the 16th century, English bankers used the term "face value" to refer to the amount of money that a bill of exchange or promissory note promised to pay on its due date. This amount was typically written on the face of the instrument, hence the term "face value."
Over time, the term came to be used more broadly to refer to the nominal value of any financial instrument, regardless of its type. In the United States, the face value of stocks is typically set at $1 per share, while the face value of bonds varies depending on the terms of the bond.
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