The purpose of a floating-rate is to: Save interest expense for corporate issuers. Avoid making interest payments until maturity. Shift the yield curve. Offer rates that adjust to current market conditions.

The purpose of floating exchange rate is to offer rates that adjust to current market conditions.

Explanation:

A floating interest rate, also called the adjustable or variable rate is a debt instrument such as mortgage, bond, loan or credit, which does not have a fixed interest rate over the life of the instrument.

Floating interest rates usually change based on the reference rate i.e. a benchmark of any financial factor like the consumer price index. London Inter-bank offered rate(LIBOR) is a common reference rates used as the basis for applying floating interest rates. LIBOR is the rate large banks use in lending to each other. The rate for such debt is usually called a margin or spread over the base rate.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.