Question
when it's best to hedge a forward contract based on these choices: (1) Against expected cashflow, (2) Against firm commitment, or (3) Against an account
when it's best to hedge a forward contract based on these choices: (1) Against expected cashflow, (2) Against firm commitment, or (3) Against an account payable or account receivable? Please explain your reasoning.
If you have a choice, 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?
I'm working on a big project and need some thoughts
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