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