For a bond, par value is the amount the issuer will return to the holder upon maturity and simultaneously serves as the base for coupon accrual. For a stock, nominal value determines the share in charter capital and has little practical significance for an investor: shares trade at market price, which can differ from par value many times over.
Bond prices on the market are conventionally expressed as a percentage of par value. A quote of 98% means the security costs slightly below par, 103% means above par. This notation allows direct comparison of issues with different nominal values.
The relationship between price and par value reflects changes in rates and the market's assessment of issuer reliability. If market rates rise after issuance, a previously placed security with a lower coupon trades below par—the discount compensates the buyer for insufficient coupon income. When rates fall, the opposite occurs, and the security trades above par at a premium. Upon maturity, par value is paid in any case, so the price tends toward par as the maturity date approaches.