When might an MNE use a forward exchange contract (a contract with a bank to buy or sell foreign exchange at a future date, with the exchange rate and value fixed today) When might the firm decide to forgo this strategy and leave a particular foreign currency transaction unhedged ...

A forward exchange contract is a legally binding agreement between a firm and a bank that ca ...

When might an MNE use a forward exchange contract (a contract with a bank to buy or

Question:

When might an MNE use a forward exchange contract (a contract with a bank to buy or sell foreign exchange at a future date, with the and value fixed today)? When might the firm decide to forgo this strategy and leave a particular foreign currency transaction unhedged?
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...