What does the discount rate determine?

The discount rate is primarily used to determine the present value of an investment by calculating what future cash flows are worth today. This reflects the time value of money, indicating that money available today is worth more than the same amount in the future due to its potential earning capacity. The use of a discount rate allows investors and analysts to assess the attractiveness of an investment or project by expressing future cash flows in today's dollars and determining an investment’s value prior to its maturity.

In this context, the other options do not directly relate to the function of a discount rate. Determining daily operating expenses is more about ongoing management costs rather than investment valuation. The maturity value of an investment is more concerned with the total payout at the end of an investment term and does not involve discounting back to present value. Lastly, the current market rate for loans pertains to interest rates charged by lenders, which does not specifically relate to the valuation determinations made using the discount rate.