what is a denomination 
a denomination refers to the units classification for the stated or face value of financial instruments such as currency notes or coins as well as for securities bonds and other investments the denomination can therefore be used to quote the base currency in a forex transaction or the quoted currency in a financial asset this use of the term helps define the acceptable payment in trades and the monetary unit in which it is priced for example when indicating u s dollar denominated bonds issued by a foreign government understanding denominationmost often a denomination is a unit of value or numeraire given to money or currencies like coins and notes as well as other financial instruments that maintain set values such as government issued bonds the denomination value of such a fixed income security is often referred to as its face value because it appears on the front or face of the financial instrument in the united states currency notes dispensed by most automated teller machines atms are only available in certain denominations as an example some atms offer 20 bills and 100 bills while others might provide 10 and 50 notes in a trade transaction an exporter based in europe may invoice the buyer in u s dollars making the transaction u s dollar denominated while most commodities were quoted in terms of the dollar beginning in 2011 commodities such as crude oil could receive quotes in other currency denominations such as the euro some foreign entities will issue securities denominated in a different currency from their own for instance the government of argentina has issued u s dollar denominated sovereign debt and certain non u s corporations issue shares denominated in dollars par values as denominationsthe denomination affixed to a bond or other fixed income investment is equal to the bond s par value which is the amount paid upon maturity one may purchase bonds in a variety of denominations ranging from 50 to 10 000 when one buys a mutual bond it is sold for an amount below the marked denomination because the difference between the sales price and the value at maturity serves a function similar to the interest earned in other investment vehicles other types of securities are also issued with par values however the actual par value on a share of stock for instance is not an accurate assessment of the security s importance in the marketplace the par value here instead represents a minimum value for the holding when issuing common stock corporations actually issue them with a face value as little as zero or one cent this pricing convention allows them to avoid legal liabilities they may expose themselves to if they listed the stock at a higher price denominations and nomenclaturenomenclature is the act of applying a name to an item and many currencies carry not only the official denomination but also a nickname as an example the canadian dollar cad carries the nickname of the loonie because it has the image of a loon bird on one side the american 100 bill is known as a benjamin because it carries the picture of benjamin franklin real world examplesome individual pieces of currency have a higher retail market value than their officially marked denomination these currencies are collectible and sought after by hobbyists and those looking for an alternative investment for example some u s quarters produced between 1932 and 1964 comprised 90 silver content consequently although the face value maintains their worth at 25 cents the market value may be higher based on the price of silver the melt value of silver the condition of a specific coin and the date and mint involved this difference between the denomination and the melt value ultimately led to a change in the materials used to produce quarters 