In the Fixed Income
markets, face value is the redemption
value of the instrument
in question. Typically for US
s, and note
s this is $1,000. In other markets - those, for example, dealing with Corporate
bonds this may be $5,000 or $10,000.
Face value is important since the coupon payment
received by the investor
is calculated as a percentage
For example, the owner of a US Government 6% bond would receive coupon payments of $30, twice a year; in other words, 6% of $1,000.