In simple terms bond can be termed as a financial security. A financial security which represents the promise of its issuer (usually a company or a
government) to repay a loan over a specified time period, at a specified rate of interest. The
bond can then be bought and sold to other investors, over and over again. When the rate of
interest falls, bond prices rise (and vice versa) – since when interest rates are lower, the bond’s
promise to repay interest at the specified fixed rate becomes more valuable.