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ABC, a U.S. based MNC, plans to hedge its payment of 5 million New Zealand dollars (NZD) for NZ goods in 2 years. The nominal

ABC, a U.S. based MNC, plans to hedge its payment of 5 million New Zealand dollars (NZD) for NZ goods in 2 years. The nominal annual U.S. interest rate is 6% while that of NZ is 10%. The spot rate of the NZD is $0.68 while the 2 year forward rate is $0.63. Should ABC hedge its payables with a money market hedge or a forward hedge?

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