Debt instruments are financial assets that represent a loan made by an investor to a borrower. They are used by governments, corporations, and other entities to raise capital. Common examples include bonds, debentures, and notes, which typically pay interest over a specified period before returning the principal amount to the investor. Investors in debt instruments receive regular interest payments, making them an attractive option for those seeking steady income. The risk associated with these instruments varies based on the issuer's creditworthiness, with higher risks often leading to higher potential returns. Understanding the different types of debt instruments is crucial for effective investment strategies.