Groundlearn / Glossary / Par value
Par value
Also called face value, principal. A CFA term, defined in plain English with the distinction examiners test.
What it means
The amount a bond repays at maturity, and the base on which the coupon is calculated.
Where it appears in the syllabus
- Fixed IncomeCFA Level I · exam weight 11–14% · Pricing, yield measures, duration, convexity, credit spreads.
Related terms
- Callable bondA bond the issuer may redeem early, usually when rates have fallen.
- ConvexityThe curvature of the price–yield relationship — how duration itself changes as yields move.
- Coupon rateThe annual interest a bond pays, as a percentage of par.
- Credit spreadThe extra yield a borrower pays over a risk-free benchmark of the same maturity, compensating for default and…
- Current yieldA bond’s annual coupon divided by its current market price — the cash income it throws off this year per unit invested.
- DurationThe sensitivity of a bond’s price to a change in yield, and equivalently the weighted average time to receiving its…
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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