nominal value
C1Formal, Technical, Financial
Definition
Meaning
The face value, stated value, or assigned monetary amount of something, such as a coin, bond, or share, as opposed to its actual market value or real purchasing power.
In a broader, often figurative sense, something that is very small or insignificant in comparison to what it is supposed to represent; a token amount. In technical fields like statistics and engineering, it can refer to a designated or standard value used as a reference point.
Linguistics
Semantic Notes
The term is polysemous. Its primary financial meaning is precise and literal. Its extended, figurative meaning implies a lack of real substance or worth ('merely nominal'), often carrying a connotation of insignificance or triviality. The technical meaning is neutral and refers to a benchmark.
Dialectal Variation
British vs American Usage
Differences
No significant differences in definition or usage. Spelling conventions follow regional norms (e.g., 'value' vs. 'value').
Connotations
Identical in both financial and figurative contexts.
Frequency
Equally common in financial, economic, and technical discourse in both regions.
Vocabulary
Collocations
Grammar
Valency Patterns
The [noun] has a nominal value of [amount].[Noun] is trading below/above its nominal value.They charge a nominal value for [service].It was sold for a nominal value.Vocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Phrases
Idioms & Phrases
- “(for) a nominal sum”
- “in name only”
- “a token gesture”
Usage
Context Usage
Business
Essential in finance and accounting for describing the face value of securities, shares, and bonds on official documents.
Academic
Used in economics to discuss money illusion, inflation, and the difference between nominal and real values (e.g., nominal GDP).
Everyday
Rare in casual conversation. May be used figuratively: 'He rents the flat from his uncle for a nominal value.'
Technical
Used in engineering for specified or standard operating values (nominal voltage, nominal size) and in statistics.
Examples
By Part of Speech
verb
British English
- The shares were nominalised at one pence each.
- (Note: 'nominalise' is a rare, technical verb not commonly associated with 'nominal value').
American English
- The bond was nominalized at $1000. (Rare, technical).
adverb
British English
- The service is nominally free, but donations are expected. (From 'nominal').
American English
- The position is nominally full-time, but hours are flexible. (From 'nominal').
adjective
British English
- A nominal fee of £1 is required for administration.
- The nominal rate of return doesn't account for inflation.
American English
- She is the nominal head of the committee but has little real power.
- The nominal growth rate was adjusted for price changes.
Examples
By CEFR Level
- The old coin has a nominal value of five pence, but a collector might pay more for it.
- They asked for a nominal payment to cover their costs.
- Despite its high nominal value, the bond was trading at a significant discount on the secondary market.
- The rent was a nominal £50 a month, as the property was owned by a family trust.
- Economists stress the importance of distinguishing between the nominal value of GDP and its real value, which is adjusted for inflation.
- The engineer specified that the system should operate at the nominal voltage, with tolerances of plus or minus ten percent.
Learning
Memory Aids
Mnemonic
Think of the NOMinal value as the NAME (from Latin 'nomen') written on the coin or contract. It's the official 'name-tag' price, not necessarily the real price.
Conceptual Metaphor
VALUE IS A LABEL (The stated label may not reflect the true contents.)
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Avoid confusing it with 'номинальный' meaning 'titular' or 'in name only' in all contexts. In finance, 'номинальная стоимость' is the direct equivalent.
- Do not translate as 'нормальный' (normal). 'Nominal' and 'normal' are false friends.
Common Mistakes
- Using 'nominal value' to mean 'normal value' or 'average value'.
- Confusing 'nominal value' (face amount) with 'market value' (current price).
- Incorrect plural: 'nominal values' (correct) vs. 'nominal value' (often uncountable as a concept).
Practice
Quiz
In which context would the phrase 'nominal value' LEAST likely be used?
FAQ
Frequently Asked Questions
Nominal value is the fixed, face value stated on a financial instrument (like £1 on a coin). Market value is the current price it can be sold for in the open market, which fluctuates based on supply and demand.
Yes, in a figurative sense. When something is sold or offered 'for a nominal value' (e.g., £1), it emphasizes that the price is tokenistic and far below its real worth, thus very small or insignificant.
No, they are key opposites. Nominal value is expressed in current money terms and is not adjusted for inflation. Real value is adjusted for inflation, reflecting actual purchasing power. For example, a nominal salary increase of 5% during 7% inflation is a real terms pay cut.
You can say: 'The nominal value of each ordinary share in the company is 10p, though they currently trade on the stock exchange for £2.45 per share.'