[in-struh-muh
nt] 
| 1. | a mechanical tool or implement, esp. one used for delicate or precision work: surgical instruments. |
| 2. | a contrivance or apparatus for producing musical sounds: a stringed instrument. |
| 3. | a means by which something is effected or done; agency: an instrument of government. |
| 4. | a device for measuring the present value of a quantity under observation. |
| 5. | a mechanical or electronic measuring device, esp. one used in navigation: landing a plane by instruments. |
| 6. | a formal legal document, as a draft or bond: negotiable instruments. |
| 7. | a person used by another merely as a means to some private end; tool or dupe. |
| 8. | to equip with instruments, as a machine or manufacturing process: to instrument a space vehicle. |
| 9. | to arrange a composition for musical instruments; orchestrate. |
in·stru·ment (ĭn'strə-mənt)  (click for larger image in new window) n.
[Middle English, from Old French, from Latin īnstrūmentum, tool, implement, from īnstruere, to prepare; see instruct.] |
Instrument
1) A tradeable asset or negotiable item such as a security, commodity, derivative or index, or any item that underlies a derivative. An instrument is a means by which something of value is transferred, held or accomplished.
2) An economic variable that can be controlled or altered by government policymakers in to cause a desired effect in other economic indicators.
3) A legal document such as a contract, will or deed.
Investopedia Commentary
1) Basically, any asset purchased by an investor can be considered a financial instrument. Antique furniture, wheat and corporate bonds are all equally considered investing instruments they can all be bought and sold as things that hold and produce value. Instruments can be debt or equity, representing a share of liability (a future repayment of debt) or ownership.
2) Commonly, policymakers and central banks adjust economic instruments such as interest rates to achieve and maintain desired levels of other economic indicators such as inflation or unemployment rates.
3) Some examples of legal instruments include insurance contracts, debt covenants, purchase agreements or mortgages. These documents lay out the parties involved, triggering events and terms of the contract, communicating the intended purpose and scope.
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See also: Bank of Canada - BOC, Central Bank, Debt, Equity, Federal Reserve System, Financial Instrument, Inflation, Interest Rate, Monetary Policy, Security
instrument
instrument in·stru·ment (ĭn'strə-mənt)
n.
A tool or implement, as for surgery.
instrument programming
To install devices or instructions into hardware or software to monitor the operation of a system or component.
(1996-05-22)