I would like to promote certain key word. This key word is in my site meta tag.
What's better strategy:
-text link to my site will contain only this keyword. For example:
<A HREF="http://www.mysite.com/" >Keyword</A>

-text link to my site will contain this keyword as part of some sentence. For example:
<A HREF="http://www.mysite.com/" >Keyword servece for free</A>

Thanks,
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First choice.

Google definitely favors links that are part of sentences and phrases as opposed to standalone. The best way to do it is

<a href="http://www.mysite.com/">keyword</a> service for free

Notice how it's a phrase or sentence with only the keyword hyperlinked, so as to not dilute the keyword value in the link. It also makes the link more natural sounding, and not appear like a sponsor.

If I were to advertise a site that sold widgets, I might do something like

Cheap <a href="http://www.widgets.com">widgets</a> for sale

Exactly. Don't hyperlink the whole sentence.

I agree...a hyperlink with context of a sentence is best.

also if the page also has reference to the words that are used in the hyper link...it would help

Which page?
source or target

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also if the page also has reference to the words that are used in the hyper link...it would help

the page where the link is placed. Its basically relevancy ranking that is done by SEs

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