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Case Study Of The LIBOR, The Federal Funds

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LIBOR, the Federal Funds Rate, and Prime tend to hover around each other as shown on the graph below. Obviously the LIBOR and the federal funds rate are closer to each other as the LIBOR is the British bankers association equivalent of the U.S. federal funds rate.
So how could this be used in reference to our lectures? From: Federal Reserve Bank of St. Louis
Discounting is determining the present value of payments to be received in the future. As we know: to find the present value of future payments, the time value of money is determined by calculating the cost of money today and the cost of money in the future. The cost of money today is typically based on LIBOR, the Federal Funds Rate, and sometimes Prime.
Decision making in foreign exchange

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