Which of the following describes face value of a bond?

The face value of a bond, also often referred to as its par value, is the principal amount that the issuer agrees to pay the bondholder at maturity. This amount is predetermined when the bond is issued and does not change over the life of the bond. It represents the original value of the bond and is crucial for determining the bond's interest payments, which are usually calculated as a percentage of the face value.

Understanding this concept is essential for assessing bond investments, as it impacts both the periodic interest payments (coupons) received by the bondholder and the total amount repaid at maturity. In summary, the face value is key to understanding the bond's structure and its value to the investor, making it vital knowledge for anyone involved in bond investment or analysis.

Other choices reflect different aspects of bonds but do not define face value correctly. For instance, the value of all future cash flows would consider present value calculations and is not strictly equal to the face value. The amount paid to bondholders during their ownership references interest payments rather than the face value itself. Lastly, the sum of all coupon payments pertains to the total income from the bond but does not specifically address the principal repayment that constitutes the face value.