Bonds are considered less risky forms of investments than stocks, as the former does not have the same volatility as the latter has. It represents a promise to pay when the indebted entity, the bond issuer, borrows money from a buyer of the bond, the bondholder. Bonds are used by the government and private companies to finance desired projects. The interest rate of a bond is fixed when it is first issued. The payment comprises of two parts – the fixed bond interest rate or coupon and the final amount to be paid upon maturity. The fixed coupon rate may be annually or every 6 months depending on the type of bond. Bonds can be adversely affected by prevailing economic conditions such as rising interest rates.