Final answer:
The term for the denominated amount of a bond indenture is the 'face value.' This is the amount the issuer agrees to pay at maturity, not to be confused with yield to maturity. The bond's face value, interest rate, and maturity date are considered to calculate the present value, which may differ from the face value.
Step-by-step explanation:
The term for the denominated amount of the bond indenture, also referred to as the face value, principal amount, or maturity value of a bond, is none other than the face value itself. When investors purchase a bond, they are essentially receiving an "I owe you" note from the borrower. The face value is the specified amount that the issuer of the bond promises to pay the bondholder upon maturity. Additionally, the bond includes a coupon rate or interest rate, which is the periodic payment made to the bondholder, typically on a semi-annual basis. Another important component of a bond is its maturity date, which is when the issuer has agreed to repay the bond's face value in full, along with the final interest payment.
The bond's face value, interest rate, maturity date, and prevailing market interest rates all contribute to determining the bond's present value. This figure represents the most a buyer would be willing to pay for the bond at any given point before its maturity. It is worth noting that the bond's present value may not always equal its face value, as it is influenced by the current market conditions and interest rates.