Question

How
does the concept of an exchange rate relate to how we equate
dollars from today with dollars from the future? What are the
“exchange rates” that get us from present dollars to future dollars
and future dollars back to present dollars?

please answer it in a paragraph or so

Answer #1

Concept of exchange rate related to equating of the spot rate of Dollar with the dollars of the future rate by considering all the interest rate in the exchange fluctuations and then speculating the movement of the dollar for the future so we will be trying to adjust the spot rate for the interest rate movement and adjustment in the value of the Dollar according to the speculative nature of the market and we will also consider value of dollar in respect to other currencies.

Exchange rate in the spot market will be helping in gaining the rate of dollar from present to future by estimations of the factors of interest and when we will be considering the future dollars back to the present dollars, we will be trying to to enter into a transaction with the banks at the future value in present.

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