Principal Value
a.k.a. Principal, Face value, Par value
The original amount of a loan or bond that has to be paid back, not counting interest.
In plain English
The original amount of a loan or bond that has to be paid back, not counting interest.
Principal value is the core amount borrowed. Buy a bond with a 1,000-dollar principal and that is what the issuer promises to hand back at maturity; interest (the coupon) comes on top.
A bond's market price can drift above or below its principal as interest rates change, but the principal itself stays fixed. In trading, "principal" can also simply mean the amount of money you put in.
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