Bond*
A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The Federal government, states, cities, corporations, and many other types of institutions sell bonds. A bond is generally a written promise to repay loan at a specified interest rate. Bonds are considered less risky investments than stocks. A bond’s rating is like a person’s credit rating. It gives you an idea of whether the company that issued the bond will be able to make its loan payments. When interest rates rise, bond prices fall; when rates are falling, bond prices raise.