At which point will you enter into such forward contracts for hedging purposes? i.e. would be prefer hedging against expected cashflow(before you even sign a contract with any foreign company), against firm commitment (after you have signed the contract, but before delivery of goods) or against an account payable or account receivable (after delivery of goods)? Why?

Answer rating: 100% (QA)

Hedging using forward contracts involves locking in a future exchange rate to mitigate the risk of adverse currency fluctuations The optimal timing fo... View the full answer