Nominal Value

The face value or stated value of a financial instrument, unadjusted for inflation or other factors. A bond with a $1,000 nominal value pays interest based on that amount, regardless of what the bond trades for in the secondary market. In economics, nominal GDP measures output at current prices, while real GDP adjusts for inflation. The distinction between nominal and real values is crucial -- a portfolio that returned 8% in a year with 6% inflation only gained about 2% in real purchasing power.