The face value of a bond refers to

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Multiple Choice

The face value of a bond refers to

Explanation:
The face value is the principal amount the issuer promises to repay at maturity. It’s the fixed amount used to determine coupon payments—the coupon rate is applied to this face value to calculate how much interest is paid periodically. The market price of a bond can move above or below this amount based on interest rates and demand, but the face value itself is the repayment at the end. Yield to maturity, by contrast, is a measure of the overall return considering price paid, coupons received, and the time to maturity, not the fixed principal itself. So, the face value refers specifically to the principal repaid at maturity.

The face value is the principal amount the issuer promises to repay at maturity. It’s the fixed amount used to determine coupon payments—the coupon rate is applied to this face value to calculate how much interest is paid periodically. The market price of a bond can move above or below this amount based on interest rates and demand, but the face value itself is the repayment at the end. Yield to maturity, by contrast, is a measure of the overall return considering price paid, coupons received, and the time to maturity, not the fixed principal itself. So, the face value refers specifically to the principal repaid at maturity.

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