Please discuss the following two topics.

$1.$ Overhedge. In terms of policies of hedging transaction exposure, firms may hedge most of the exposure or opt for selective hedge. Those are regarding hedging exposure to expected, contractual transactions. But MNCs may have some $$unanticipated$$ transactions that occur without any advance notice. MNCs may attempt to forecast the net cash flows in each currency due to unanticipated transactions based on the previous net cash flows for that currency in a previous period. Besides hedging the expected transactions, should MNCs also hedge those unanticipated transactions, i$.$e$.,$ should MNCs overhedge? Share your opinion on why MNCs should or should not hedge unanticipated transactions.

$2.$ Currency Options Versus Forward Contracts. What are the advantages and disadvantages of currency options as compared to forward contracts when hedging payables. Explain the conditions $($regarding your expectations of the future exchange rate and the uncertainty surrounding the future exchange rate$)$ that might cause you to use currency options instead of forward contracts if you were exposed to payables. Do you think you would use currency options or forward contracts more frequently?