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Comparing Notional Value vs. Market Value


Notional Value vs. Market Value: An Overview

The notional value and market value both describe the value of a security. Notional value speaks to how much total value a security theoretically controls—for instance through derivatives contracts or debt obligations. Market value, on the other hand, is the price of a security right now that can be bought or sold on an exchange or through a broker.

Market value is also used to refer to the market capitalization of a publicly traded company and is determined by multiplying the number of outstanding shares by the current share price.

Key Takeaways

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