Final answer:
The face value of a bond is the principal amount that the issuer is obligated to pay at maturity, making the statement true. Additionally, the face value is distinct from the bond's market value, which can fluctuate based on various market conditions.
Step-by-step explanation:
The statement that the face value of a bond is the amount of principal due at the maturity date is true. When it comes to the financial definition of a bond, there are several key components. The face value is indeed the amount that the issuer of the bond promises to pay back to the bondholder on the maturity date, without regard to any interest or coupon payments made during the life of the bond. Therefore, the maturity value is equivalent to the face value. This face value is separate from the market value, which fluctuates based on current interest rates and other market conditions. On many occasions, the market value of a bond can differ from its face value, reflecting factors such as changes in market interest rates, the credit quality of the issuer, and the time remaining until maturity.