Learning Quantitative Finance with R

Bond pricing

Bonds are very important financial instruments as they provide cash flow at a certain time at the predetermined rate or current market rate. Bonds help investors to create well-diversified portfolios. One must calculate bond price, yield, and maturity precisely to get a better idea of the instrument. We are going to use package termstrc for this. We have to install and load it into the R workspace using the following code:

> install.packages('termstrc') 
> library('termstrc') 

We will use the data govtbonds in the package, which can be loaded and viewed using the following code:

> data(govbonds) 
> govbonds 
This is a data set of coupon bonds for: 
GERMANY AUSTRIA FRANCE ,  
observed at 2008-01-30. 

The variable govbonds has bond data for three ...