Select optimal hedging technique by:
Consider whether futures or forwards are preferred.
Consider desirability of money market hedge versus futures/forwards based on cost.
Assess the feasibility of a currency call option based on estimated cash outflows.
Choose optimal hedge versus no hedge for payables
Even when an MNC knows what its future payables will be, it may decide not to hedge in some cases.
Evaluate the hedge decision by estimating the real cost of hedging versus the cost if not hedged.